In a dog-eat-dog world, sometimes we forget what will happen to our furred friends. Over 68% of US households, in fact, own pets, and a surprising amount of those households are making financial plans regarding their pets. After all, in the same way, you want your family or beneficiaries to have a good life when you pass away, it is important to make sure that your pet will also be safe from being potentially abandoned. That’s where pet life insurance comes in.
The most famous case of estate planning for pets is the case of Leona Helmsley’s dog Trouble, the ‘Richest pet on Earth.’ Helmsley, an infamous billionaire who cut two grandsons out of her will, bequeathed a sum of two million dollars to her Maltese when she passed away in 2007. The dog passed away four years later, in 2011.
Though you may not be in the position to leave 12 million dollars behind for your dog, or cat, or goldfish for that matter, it is still sometimes a good idea to plan for your pets’ well-being. Before you purchase pet life insurance, though, you must check a few things:
- If you have nobody to care for them. If someone is there to care for your pets, then there is no need to make special allowances for them.
- Make sure that you describe the pet to such a degree that it is not possible to commit fraud by replacing them with a similar animal.
- Determine your Caretaker: make sure to determine both a trustee and a caretaker; the trustee will make sure that the money is properly used by the caretaker for your pet.
- Provide for remaining funds: when your pet passes away, the fund may still have some remaining money. Be careful, though- stray away from making an individual the beneficiary, in case they choose to ‘accelerate’ the payout. Instead, choose a charity or cause where you will donate your money.
A recent survey indicated that 44 percent of pet owners have a financial plan to make sure their pets are covered. Some have verbal plans; others have written plans. Pet care, as a rule, is costly and complex, so make sure that you have covered every base. Find out how much it costs you on a monthly basis to feed and provide necessities to your pet, and use that as a basis to understand how much you must leave behind.
Be sure to talk to your financial advisor before you make any financial decisions regarding your pets and pet life insurance. In addition, when you draft your formal trust or will, consult your legal professional to make sure that you have covered all the necessary bases.