Guest Post from Pawzy.co
If you’ve ever thought about including your pets in your will, you’re not alone. A 2012 survey by the Bank of Montreal reported that 75% of pet owners want to ensure the future care of their furry companions. We spoil our animals, and we want to make sure they always receive that level of care, even if we’re not around to give it to them. There are, of course, some extreme cases of estate planning—Oprah Winfrey’s five dogs will be inheriting $30 million, for example—but the average Canadian can make a big difference simply by planning ahead.
The sad truth is that pets without a plan can end up in an animal shelter where they only have a 45-60% chance of being adopted by another person. With that in mind, it’s alarming that only 7% of pet owners made a formal arrangement for their dog or cat. This low percentage is likely because many of us believe that a family member or friend will step up to the plate and provide a loving home. This is not only a risky assumption, but it can also cause a financial strain for your pet’s new parent. Owning a pet, after all, is not a cheap endeavour. According to the Ontario Veterinary Medical Association, the lifetime cost of a dog is estimated to be over $30,000 including food, dog walkers, and medical bills. Quite the responsibility!
This low percentage is likely because many of us believe that a family member or friend will step up to the plate and provide a loving home.
You can both ease the burden and keep your pet out of a shelter by including your final wishes in your will. Because pets are treated as property in Canada, it’s important to note that they can’t inherit money directly. Instead, you have two options: set up a trust, or leave funds to a beneficiary. A trust is the most legally secure method, but it’s also expensive and requires more work. The first step is to designate a trustee who will be responsible for managing the sum of money you’ve set aside for your pet. This will include filing a tax return every year. It’s legally binding, but you might have to pay a fee to the trustee in addition to set-up costs.
Because pets are treated as property in Canada, it’s important to note that they can’t inherit money directly.
A more popular option is to find a suitable beneficiary. In your will, you leave a specific sum to the pet’s future caretaker that will be used for pet expenses. If you’re not sure how much to leave, the amount can be calculated based on your pet’s expected lifespan and roughly $3,000/year for dogs. Because this arrangement isn’t legally binding, there’s a chance that your caretaker could take the money and give your pet to a shelter. To avoid this, it’s best to have a conversation, as well as get an acceptance in writing, with your friend or family member before including them in your will. You can also include a memorandum that serves as a letter of guidance for the caretaker similar to the note you’d leave your pet sitter.
Lastly, if you choose to skip those options, make sure to include your pet in a chattels clause. This is the part of your will for personal items like clothing, jewelry, collectibles, etc. If your clause says to sell everything, you should be aware that this includes your pet, as it’s considered property, unless you make an exception. We all hope that the executor of our will has compassion for dogs, cats, rodents, reptiles, and birds; but it’s ultimately our responsibility to make sure our pets live out the rest of their days peacefully. After all, it’s what our beloved pets deserve.
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