3 Ways for Leaving Life Insurance to a Pet
When you think of life insurance, you probably think of leaving money for your children or your spouse, but some people also want to leave something behind for their pet. In today’s materialistic culture, caring for pets can border on the extreme. Clothes for your pet is one thing, but a trust fund? If you can believe it, leaving life insurance to a pet has become the new normal for many pet owners. In case you were wondering, pets are not considered people and they cannot legally inherit money or possessions. However, many life insurance providers will offer their clients the option of setting up a pet trust, a legally binding agreement that holds money for specific beneficiaries. In so many words, the policyholder has the option of leaving money to a person who then assumes responsibility for caring for the pet.
Who Needs a Pet Trust?
There are some instances in which a pet trust makes the most sense. If a pet has a long lifespan and is expected to outlive their owner, that person would need to make arrangements for finding their pet a new home. Once they designate a new owner for their pet, they have to consider the cost that goes along with it. In some cases, a pet’s living expenses can amount to several thousands of dollars each year. A person with several pets would have to multiply those expenses. People with exotic pets might also invest in a pet trust. Certain animals would have difficulty finding good homes in their owner’s absence. A legally binding pet trust would ensure that these animals are properly taken care of after their owners pass away.
Types of Pet Trusts
Pet owners have several options when leaving life insurance to a pet. Each option comes with its own limitations and special considerations.
The trust names a new caregiver for the pet with specific instructions for how the pet should be cared for. In most cases, the trust will also designate a separate trustee who’s responsible for managing the money in the account. This creates a system of accountability between the beneficiaries. If one person were responsible for taking care of the pet and managing the account, it could lead to a conflict of interest.
This type of trust simply designates a sum of money for the pet’s care. The court will then assign an individual to take care of the pet and a separate individual to oversee the funds. The original owner does not have the option of including specific instructions for how the pet should be cared for.
As a more direct option for pet owners, a Pet Protection Agreement is a legally binding contract signed by the current owner and the pet’s future caregiver. This option is not ideal for transferring large sums of money. Instead, the owner can quickly designate a new owner for their pet without using a life insurance policy.A traditional trust is by far the most comprehensive way to ensure your pet’s future. To find out more about how to leave life insurance to a pet, contact the experts at
LifeInsure.com (https://www.lifeinsure.com/). They can help you find the right insurance company to make sure that your pet will always be in good hands.
In my 20+ years as an independent life and disability insurance broker, I have personally assisted thousands of clients with their life and disability insurance needs. Being independent, I represent many highly-rated insurance companies and, because I am not beholden to any one insurance company, my focus is to find the right company and policy for each individual client. I believe that when people shop for insurance (or anything else, for that matter) on the Internet, they are looking for a simple, non-intrusive, non-pressure method of doing so. I strive to treat my prospective clients with the utmost respect and I believe an educated prospect can make the right decision without sales pressure. Please feel free to contact me at your convenience.