Planning for the arf-terlife — estate planning for pets

Charlotte Reed’s closest friends have gone to the dogs — literally. The ex-securities compliance officer says her two cocker spaniels and golden retriever are her closest companions, so naturally she’s concerned about their well-being.

Ms. Reed, a New York City resident, says the Sept. 11 tragedy was instrumental in her decision to plan long term for her pets.

“For the first two or three weeks after 9-11, I was so afraid to leave my house, because I didn’t want to be separated from my dogs. When we make these long-term plans, we forget about what we are going to do with these pets,” she says.

Another eccentric pet owner? Not really.

As more and more people turn to financial advisers to map out their own futures, they are increasingly asking them to draw up plans for their pets as well.

Earlier this month, the Humane Society of the United States began an outreach effort to financial planners and lawyers. “Do you consider your clients’ pets when helping them plan their estates? If not you should,” it said in a news release.

As part of that effort, the Humane Society mailed out 5,000 free kits with information about planning estates for pets.

The effort to include pets in estate planning has also reached the halls of Congress. Rep. Earl Elumenauer, D-Ore., introduced a bill in May to amend the tax code to permit the creation of “Charitable Remainder Pet Trusts.” The bill is currently before the Ways and Means Committee.

The proposed law would permit the creation of a trust and allow income, gift and estate tax deductions for pets, which currently are considered mere property, like lawn chairs and television sets.

Raymond B. McFalone, an estate planning attorney in the San Francisco Bay area, encourages his clients to fill out pet profiles to be included in their estate planning documents.

“I don’t think the estate planning community really takes planning for a pet as serious as they should. It’s an afterthought, and I think estate planning attorneys often rely on the client to raise the issue,” he says.

Last year, after her mother fell ill, Ms. Reed, 36, says that she was moved to find a lawyer and financial planner to plan for her own estate.

At the advice of her planner, Ms. Reed decided to leave her pets to the Bide-A-Wee Golden Years Retirement Home in Westhampton, N.Y. It charges $10,000 per pet for lifetime care.

Ms. Reed, who has a full-service in-home pet care company called Two Dogs & A Goat, says that she is looking at several options to ensure that her pets are well taken care of. “I am now taking some of the money I have saved, and I’m putting it in CDs so that money is available and designated for my pets,” she says.

Planning for Chico

Not all advisers are attuned to the trend.

Norman M. Boone, principal with Boone Financial Advisors Inc. in San Francisco, says he found it “unusual” when a client in Idaho asked him to draw up a plan for her pets.

“We are an urban planning firm as opposed to being rural where people get more attached to their animals. This is an unusual case where people have to set aside all sorts of special trusts and resources to take care of an animal after their death,” says Mr. Boone, who manages $150 million.

But the client, Sjoukje Zimmermann, 47, who has 11 cats and a cockatoo named Chico, doesn’t find it unusual at all.

For the care of her 11 cats, Ms. Zimmermann has set up a trust. She has appointed an individual who will live in her home and care for her cats until the last one dies. She plans to send Chico, a five-year-old Pink Moluccan, to the Gabriel Foundation, a bird sanctuary, rescue firm and adoption clinic in Aspen, Colo.

The foundation doesn’t ask for a specific donation, but Ms. Zimmermann says that it costs about $600 per year to take care of a cockatoo. So, she says, she’s earmarking more than $250,000 from her estate to take care of her bird. Cockatoos generally live 70 to 80 years.

“I just recently finished my will. I’m very particular on who would take care of my pets. Even my family didn’t qualify,” she says.

Dr. Susan Clark, a veterinarian at Ontario Animal Hospital in Mansfield, Ohio, says she has run into situations where animals have been put to death because arrangements weren’t made, or they were passed from home to home.

“Those are not unusual scenarios to come across in veterinary medicine,” says Dr. Clark. “I think the Humane Society is offering to call attention to that need,” she adds.

Robert Blizzard, the Humane Society’s director of gift planning, says that the agency developed the kit in response to years of calls it had received from people asking how to plan for pets in their wills.

“We tried to develop a resource that would provide not only the correct legal information, but also the humane perspective and information on how to act in a companion animal’s best interest,” Mr. Blizzard says.

The kit features a six-page fact sheet that provides sample legal language for including pets in wills and trusts, plus suggestions on protecting pets through powers of attorney.

It also comes with wallet alert cards for emergency personnel, emergency decals and caregiver information forms. The fact sheet is available in English and Spanish.

Tim Enstice, planned-giving manager for People for the Ethical Treatment of Animals, says that the Norfolk, Va.-based group also offers a planned-giving guide with a section dedicated to preparing for companion animals in case of an emergency or an owner’s death.

The proposed law, known as “The Morgan Bill,” after the drafting attorney’s pet collie, would allow owners to set up a trust to provide a steady stream of income to for a pet’s care.

When the trust terminated, the remainder of the trust’s assets would go to the charity of choice. The eventual gift to charity would be deductible for income, gift and estate tax purposes.

Dr. Clark and her family have three dogs, two cats, a parakeet and a hamster. She and her husband have set up trusts, and they have gotten commitments from friends to take care of the animals.