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Experts suggest wills include provisions for family pets

Financial advisers, estate attorneys recommend designating a guardian, trust

When she died seven years ago, New York hotel heiress Leona Helmsley famously left her dog $12 million. But you don’t have to be an eccentric multi-millionaire to include your pets in your estate planning.

Financial planners say that if you have a beloved pet, it makes good sense to make sure it’s cared for after you’re gone.

“It’s a question I get asked fairly frequently, and it’s a good question because for a lot of people their pets are their family,” said Robert Horne, an estate attorney with the Baltimore law firm of Adelberg, Rudow, Dorf & Hendler. “They walk them every day, feed them, they spend more time with them than they do their family members.”

“It’s a sensitive subject, absolutely, but you have to think about it,” said Howard “Buddy” Goldman, a wealth management adviser and director of estate and business planning for Northwestern Mutual in Baltimore. “I mean, what are you going to do with the pet?”

Goldman said he’s seen instances where someone wanted their dog put to sleep because the pet would not want to live without them.

Other options are available, however, and used more often.

Financial advisers and estate attorneys differed slightly on what makes the most sense, but all agreed that provisions should be made for family pets.

At the least, they said, a guardian should be designated. Typically, the guardian is a family member or friend who likes pets and has agreed to take in the pet. Picking a guardian for a pet, the advisers said, is not unlike picking a guardian for your child and should be done in a legal document.

As for how to include pets in your estate, there are a number of possibilities:

* Write the pet into your will.

* Write a letter of instructions, detailing who will care for the pet and what sort of care you want.

* Set up a trust that includes your wishes and instructions, as well as the money to pay for the level of care you expect — perhaps including such things as occasional grooming and unexpected medical expenses.

Horne said he did not recommend a separate trust for household pets because of their short life expectancy. Pet trusts, he explained, are expensive to administer and subject to higher taxes than other trusts. In addition, they are complex.

“You have to pay an accountant to handle it,” he said. “It’s not something a layperson could figure out.”

Better, he said, to find someone (typically a family member) willing to care for your pet and then leave that person a bequest of cash to cover expenses.

For animals with longer life expectancies, such as horses or some birds, a pet trust might be worth the expense, he said.

Frank Cannon, first vice president of wealth management at UBS Financial Services, in Baltimore, said that the best way of giving your pets the life you want for them after you die is to leave detailed instructions, and possibly money, in a legally binding trust.

Helmsley, he explained, did it all wrong by leaving her dog money in a will, because a will distributes property and can fund a trust, but the trust includes the necessary instructions.

“Once you get to know a client, you know how important their pets are,” Cannon said. “And the only way you’re assured that when you leave this world that the pet will be cared for in the way you want it to be is to put those thoughts on paper via a trust. … It’s a much cleaner way of doing things that avoids arguments and problems later on.”