A pet trust is a form of setting aside assets for the care of a pet after death. A trust is an important estate planning tool that allows a person to control what happens to his assets after his death and to limit the use of those assets for a specific purpose. When such a trust is set up to limit the use of assets to care for a pet, it is referred to as a pet trust.
Many individuals become attached to their pets and want to ensure the animals are always cared for properly. These individuals may make provisions in their wills regarding who will inherit the pet upon their death. When some pet owners name a guardian who will care for their pets upon death, these owners may also set up a monetary fund so the pet's care will not prove to be a financial burden on its new owners.
Setting aside money to be used for a pet is no different from setting aside money in a trust to pay for a child's education or for any other purpose. The premise is that the individual transfers ownership of his assets to the trust. The proceeds and assets in the trust are then distributed to the named beneficiary according to the terms of the trust as stated by its creator.
When a person sets up a pet trust, he must specify a trustee. The trustee is the person who manages the distribution of assets. It is the trustee's job to ensure that the beneficiary uses the funds left in the trust to actually care for the animal. This can involve paying veterinary and other animal care expenses directly out of the trust or distributing the money to the pet's new caregiver and then asking for an accounting of how the money was spent. It might also mean reviewing receipts from pet stores and vet bills to ensure that the full proceeds distributed from the pet trust are actually being used for the pet's care.
The individual who sets up the trust should also specify within it what is to be done with any money that is left over after the pet passes away. Many individuals will specify that any remaining funds are to be distributed to other heirs or to the pet's caregiver. Still others will stipulate that funds from the pet trust which remain after the pet passes away should be left to an animal charity of choice.