Estate planning for pets hit the news in 2007 when Leona Helmsley, a hotel operator and real estate developer, left most of her $12 million fortune to her dog, Trouble, leaving little to her children or grandchildren. Trouble (the dog) died in 2011, but was pampered until death with $100,000 spent annually for her care. Also, after receiving death and kidnapping threats, the dog had her own security guard.
While it is interesting, and at least slightly entertaining, for many, ensuring a pet is provided for after the owner dies is a priority. Many states, including Iowa, allow a trust for the benefit of a pet or pets. As a general rule, trusts must have an ascertainable beneficiary or beneficiaries, most commonly meaning a person. The first exception years ago was to allow a charity to be a beneficiary. Legally, a dog is considered property, not a person, and therefore is not an ascertainable beneficiary. However, in Iowa, as in other states, by statute an owner can create a trust for a pet or pets which will run until the pet dies. There is one caveat - in Iowa, a court has discretion to determine whether the value in trust "substantially exceeds the amount required" and direct such funds to another purpose. (Iowa Code Section 633A.2105) Though I am unaware of any cases in Iowa discussing this provision, it seems an Iowa court wouldn't allow a $12 million trust for a pet. Then again, maybe a security guard is a required expense.
Estate planning for your pets may be something to discuss with your estate planner. If nothing else, you can talk with family members who would take care of the pet. If you decide to create a trust to support the pet, you will need to appoint a trustee to handle all the financial decisions. While the caregiver and trustee can be the same person, it is not required.
Is the day coming when estate planners will ask about pets in the initial consultation with a client just like we often ask about children?