It’s hard enough to get clients to talk about life insurance for themselves, but National Pet Month in May is a good opportunity to open the door to that discussion—by asking them if they’ve made arrangements for any companion animals in the event of their death.
Headline grabbers like the $12 million pet trust set up by the late Leona Helmsley for her dog Trouble cause many to see arrangements for a pet’s care after its guardian’s death as a joke. However, pets are regarded by most people more as members of the family than as property—their status in law.
Determined pet guardians are finding ways around that, as came to my attention in an article about a new animal sanctuary in Texas. The Circle Star Pet Haven will accept pets to live out their lives comfortably after their human guardians have died or are incapacitated.
Of course, there’s a price for such a service. In fact, according to Kim Bressant-Kibwe, trust and estates counsel for the ASPCA, “Some animal sanctuaries can cost $10,000–$25,000 or even more. [...] That’s where life insurance comes in handy.”
Circle Star suggests that pet guardians “obtain a life insurance policy or rename the beneficiary on an existing policy to cover the care of your pet based on its life expectancy.”
Attorney Rachel Hirschfeld, who has been advocating for years for people to make arrangements for their animals’ care after their own death, says insurance is the best way to ensure the money will be there—particularly when it is done as part of a pet protection agreement or a pet trust set up by a lawyer—not in a pet trust that is part of a will.
“Many pet trusts only kick in after you’re dead or after the will has been probated,” warned Hirschfeld, “and that can be a death sentence for the pet” if no carer has been designated—or if that person instead decides to drop off the pet at a shelter that will euthanize it.
A pet protection agreement, on the other hand, will bring insurance into play right away. It ensures that the money in the policy is used for the care of the pet and no other purpose, because it imposes a fiduciary obligation on the person or entity receiving the money. And it is not subject to the interpretation of a judge in a jurisdiction unsympathetic to the worries of people for their pets.