'Pet Trusts' and why wealth managers better not forget about Sparky or Tabby!

Financial advisors better not forget Sparky or Tabby when constructing client estate plans.

As of 2024, 66% of U.S. households, or 86.9 million homes, own a pet, according to the American Pet Products Association. That’s up from 56% in 1988, pet ownership statistics show.  They are often treated like family members too. US pet industry spending reached $152 billion in 2025, according to the data.

That’s a lot of money going to grooming, exercise, food and health needs. Nevertheless, one thing that owners may not think about is planning ahead for when they may not be able to care for their four-legged friends anymore. 

A new J.P. Morgan Wealth Management white paper offers tips for advisors and their clients on long-term four-legged financial care through the use of “pet trusts.”

A pet trust is a legal arrangement that allows somebody to set aside funds specifically for the care of a pet after their death or incapacity. It provides a detailed plan for a pet's care and designates someone to oversee and manage the trust’s assets for the benefit of a client's pet.

The J.P. Morgan report said the first step is to consult with an estate planning lawyer, preferably one that has experience drafting pet trusts.

Once that’s done, the next step is to choose the right trustee and caregiver.

“Select individuals or institutions that you trust to manage the trust and provide care for your pets. Discuss your plans with them to ensure they are willing and able to take on these responsibilities — and revisit your selections if circumstances change, such as your first choice caregiver moves out of state or becomes incapacitated,” the J.P. Morgan report said.

After that, the lawyer and advisory team need to draft detailed instructions on providing comprehensive instructions on the pets’ care, including their health needs, preferences, and any special requirements.

Once those rules are set down then comes the funding of the trust. The team needs to determine the amount of money needed to cover the pets’ care and arrange for these funds to be placed into the trust.

“Consider potential future expenses and inflation when setting the trust amount. Do you want to put the full amount into the trust, or will you rely on asset growth to fund some of the expenses?” said the J.P. Morgan report.

Finally, the caregiving and financial team needs to regularly review and update the pet trust to reflect any changes in the pets’ needs or circumstances, as well as the trustee and caregivers’ circumstances, to ensure that the trust remains relevant and effective over time.

“While many people plan for the care of their spouses and children in their estate planning, it’s equally important to ensure that pets are well taken care of when their owners are no longer able to provide for them. A pet trust can help to address this need, providing peace of mind that your furry, feathered or scaly companions will continue to receive the care and attention they deserve,” the J.P. Morgan report said.

And yes, there are occasions when pet trusts prove to be very expensive affairs.

American hotel heiress Leona Helmsley, for example, tried to disinherit most of her own family, but left $12 million dollars to her dog, Trouble. A judge later reduced Trouble’s inheritance to $2 million, which was a serious cut, but still left more than enough for the pooch to live out the remainder of her life in relative luxury.

Similarly, Michael Jackson reportedly bequeathed $2 million to his chimpanzee Bubbles. Prior to Jackson’s death, however, Bubbles was relocated to an animal sanctuary after exhibiting aggressive behaviors toward Jackson’s baby son.

Electing a power of attorney is another viable option when it comes to caring for pets after the owner’s passing or incapacitation. Opting for a power of attorney means the client is authorizing another person to handle all of the client’s affairs, including making arrangements for his or her pet.