Estate Planning For Your Pet
Updated: Jul 26, 2022
Amid the COVID-19 pandemic and economic fallout, nearly half of Canadian dog and cat owners report that they’re spending more on pet products than they did pre-pandemic, says a survey by Research and Markets. Another 89 per cent consider their pets to be valid family members, says a survey by BMO. As a considered family member, three-quarter of pet owners feel it’s important to arrange for the ongoing care of their pet if they were suddenly incapable. However, only seven per cent have made any form of provision (informal or formal) for their pets if something happened to them.
Canadians are writing pets into their estate plans progressively, says Tim Hewson, president at LegalWills group. However, pets are considered property and, therefore, cannot directly receive an inheritance. Instead, Canadians can find legal alternatives to ensure their fuzzy or feathered companions are taken care of in the case they die before their pet.
Pet Is Property
A pet cannot directly receive an inheritance from its owner, but an additional beneficiary can. Hewson says, “one approach to having your pet taken care of is to bequest somebody on the understanding that they will take care of them.” From there, you can assign the selected individual to receive agreed upon funding they promise to use on animal care. Unfortunately, this is an informal option and does not guarantee the pet will receive the promised estate. Therefore, Hewson suggests an alternative method.
To ensure a pet inherits an owner’s estate, set up a ‘pet trust,’ he says. This way, it is formally written that a specific person will receive the bequest, they will look after the pet, and it’s legally binding for them to use the finances received on the animal. The service provides a calculated amount of money to go to the caregiver based on the pet’s age, life expectancy, and additional factors depending on the trust plan selected. Setting up a pet trust ensures the estate will be used for the benefit of the pet and not spent on personal purchases by the receiving individual.
Write Your Will
Before preparing a pet trust, Hewson says the first step is to create a personal will. He says 65 per cent of Canadians don’t have a will in place and, therefore, do not have majority of their estate planned for. Without an official written will, any written document regarding a pet inheritance is not legally binding and, therefore, not guaranteed.
A pet owner who investigates all options of care and ensures their personal will is completed, can guarantee their best friend is always taken care of.
Melissa Mihalis is Private Wealth Canada’s staff writer.