Setting up Fido for life after (your) death
The cost of setting up Fido for life
Setting up a pet trust can cost from $2,000 to $10,000, depending on how intricate it is and whether it's drawn up in Palm Beach, Beverly Hills or Sheboygan.
In the past, "honorary" pet trusts were established, but they lacked legal teeth and could not be enforced.
An honorary pet trust might read something like this: "I, Mrs. Pet Owner, being of sound mind, hereby appoint my dear friend, neighbor and companion, Mr. Trustworthy, to be trustee of my dear dog Fido's $250,000 trust fund, so as to feed, care, succor and love dear Fido in a manner in which dear Fido has been accustomed."
Well, if this Mr. Trustworthy comes home from Mrs. Pet Owner's funeral and proceeds to starve the mangy pooch to death and bury him in the basement, other than the court going after him for cruelty to animals, he could not be prosecuted for breach of trust.
Still some wiggle room
Even in states where pet trusts are now legal and enforceable, problems still arise.
Let's say the pet trust is constructed to allow Finicky Fifi to live out her life in luxury. But after she joins her master in the great-pet-playground-beyond, the remaining money in the trust is to be given to the trustee, Mr. Honestas Dayislong. Well, who's to say that ol' Honestas didn't quicken the demise of Fifi by poisoning her, so as to take all the money sooner rather than later?
Conversely, if the remaining principal in Fifi's trust is to pass to a third party after Fifi's demise, what is to prevent the trustee from keeping Fifi "alive" forever? It's the old Lassie ploy -- didn't those collies all look alike?
And even if a trust is written properly, with all contingencies covered, the courts may nonetheless choose to intercede, if the courts decide the trust is unduly large.
Asset allocation for Fifi
Another question begs to be answered: Can a pet's trust fund be prematurely depleted, leaving him to live on generic milk bones for the rest of his life?
Securing one's own retirement is not much different than providing for a pet's future health and comfort.
Money in a pet trust needs to last, so Fido's trust may well need an investment portfolio with appropriate asset allocation, providing diversity within the various investment classes and styles. A large-cap growth and value mutual fund, and maybe some mid-caps and small-caps, too, would be a wise choice. One should not forget the fixed-income component of Fido's investment portfolio, either.
There's another choice, however: You may simply set aside enough money to provide for Kitty's prepaid care.
The California Cat Center Inc.'s Life Care Program, for example, will reserve a space for Kitty. There's a $500 nonrefundable registration fee.
After you pass on, "your cat then comes to live in the luxury accommodations of the cats-only resort," reads the promotion on its Web site, "Your cat will then be matched with others of similar characteristics to assure any roommates are suitable matches. Then, your cat will live out its life in luxury."
Cost: $5,000 a year.