Estate Planning For Pets

Whether referred to as companion animals, service animals or simply as pets, they play an important part in the lives of many Montanans. Owners can use estate planning tools to ensure their pets continue to receive proper care if the owner becomes incapacitated or dies.

In Montana, a pet is “any domesticated animal normally maintained in or near the household of its owner.” A pet is tangible personal property, like guns, cars, or jewelry. When a pet owner dies, pets pass to beneficiaries by provisions in an owner’s will, by directives in an owner’s trust document, or by a priority list of heirs contained in the Montana Uniform Probate Code (UPC) (if an owner does not have a will or a trust), says Marsha Goetting, MSU Extension Family Economics Specialist.

First, choose a willing care giver and make a care plan for your pet that will lower your pet’s stress in the first days after you are gone. Having your wishes written down will help your heirs avoid potential problems if there is a need to cover expenses for food, medical and transportation of the pet to the beneficiary, says Kaleena Miller, Madison-Jefferson Extension agent.

A Montana honorary trust for pets is valid for only 21 years, even if an owner writes a longer term in the trust document. Thus, the trust terminates the earlier of 21 years or when the pet dies. Unless indicated in the trust document, your trustee may not use any portion of the principal or income from the trust for any other use than for the pet’s care.

Pet owners have choices when funding a pet trust. Funds could come from payable on death (POD) designation on financial accounts to the pet trust. Another possibility is a transfer on death (TOD) registration with the pet trust as beneficiary for stocks, bonds, mutual funds, and annuities. The owner could also direct the trustee in the pet trust document to sell assets such as a vehicle, a house, or a boat and place those funds in the trust for the care of the pet.

Another source of funding is life insurance. A Montana pet is not a “person” so it cannot be a beneficiary of a life insurance policy. A pet owner may fund a living or testamentary pet trust by naming the trustee of the trust as the beneficiary of a life insurance policy. Or, the pet owner may have a certain percentage of an existing policy payable to the pet trust. Pet owners should consult with an attorney and/or life insurance agent about the correct way of naming the trustee of a pet trust as a beneficiary of a life insurance policy.

More information about estate planning for pets is in the MSU Extension MontGuide (fact sheet). https://store.msuextension.org/publications/FamilyFinancialManagement/MT201405HR.pdf For those who do not have computer access, copies are available from the Madison-Jefferson County Extension office at 287-3282.