Cost of living5:02Pet Inheritance. It’s a thing.
Sue Garratt doesn’t want her dog and cat to end up at the local humanitarian association if she dies before them. So the Barrie, Ontario resident got a life insurance policy to ensure her daughter would have the costs of the dogs covered if the worst happened.
“So if I do it tomorrow, she will collect the money next week and she can pay the expenses for Jethro and Tansy,” she told CBC.
Most people know that they need to have a will to ensure that it is clear how their estate will be distributed after their death. But they may not realize that pets are considered part of that estate and cannot be heirs in their own right, says Jonathan Ng, an estate lawyer in Calgary.
As disturbing as it may sound, estate law in Canada is clear: “pets are considered personal property,” he shared Cost of living. “You can’t say, ‘I’ll give Fluffy $10,000.’ Unfortunately, Fluffy is just like a Chesterfield or a chain.”
And it may not be enough to simply designate a beneficiary to take over the care of a beloved pet. Unlike that chain, pets cost money to care for, so it’s important that whoever ends up caring for your pets has the resources to provide that care properly.
Pets are expensive, so make sure you have a plan
In Canada, owning a dog costs about $4,000 per year. Food alone can cost more than $1,000 annually, and then there are vet bills and other unexpected expenses.
Ng warned that you may have to do more than just appoint your cousin to host your pet and throw in some cash.
“Maybe the cousin receives the pet on Day 1, including the $10,000 check, and goes straight to the SPCA (Society for the Prevention of Cruelty to Animals) to give up the dog,” says Ng. “It happens.” If this is a problem, Ng said, you can set up a pet trust, with someone acting as trustee, creating a “firewall” between the person caring for the pet and the money. The trustee ensures that the expectations set out in the will are met and will distribute money from the legacy accordingly.
Sue Garratt has created a life insurance plan specifically designed to ensure her pets, Jethro and Tansy, are properly cared for after she passes away. (Submitted by Sue Garratt)
It clearly doesn’t have to be so rigid that unexpected events can’t be accommodated, Ng said. “The trustee also has an obligation to listen to needs outside of (a monthly payment).” For example, the trustee can provide more money if a pet needs surgery, he said.
When the pet dies, “the trust ends and the money left in the trust goes in some other direction that the deceased wanted,” Ng said. “I see very often that the animal trusts end up with the money going to an animal-related charity.”
The amount of money required to care for a pet such as a dog or a cat is fairly straightforward because we generally have a good idea of their lifespan, Ng said.
‘I am in the will for this lady with 30 birds’
But what if the pets are, for example, parrots, which often live for decades?
That’s a concern for Megan Craig. She runs Greta’s Roost, a parrot sanctuary in Lethbridge, Alta.
“Your parrot can outlive you, and it probably will,” she said. In addition, it is common for parrot owners to have more than one bird. ‘They look a bit like chips. You can’t just have one.’
Megan Craig with one of the parrots at her rescue agency, Greta’s Roost. She inherits about 42 parrots. (Submitted by Megan Craig)
Craig is the beneficiary of several parrot owners who are also her friends.
“I’m in the will for this lady who has 30 birds, and then I have another friend who has six or eight birds, and then another friend who has another six or eight birds,” she said.
“It’s like, ‘Man, if you all die at the same time, I don’t know what I’m going to do,’” she said, laughing. “$10,000 is not going to be enough for anyone to do this work.”
She says it’s concerning to her because she has no idea how long the birds will live. “There is no guarantee that I will be carrying out this rescue effort for the next 10 to 20 years.”
Make sure your beneficiary knows what to expect
Craig has asked her friends to contact her annually to ensure she is still able to take the parrots when their owners pass away. “If we’re not able to help, it’s not good for the animal, it’s not good for your family, it’s not good for us.”
Because they are among the longest-lived pets, parrots – along with tortoises and tortoises – are also very expensive to care for.
Craig says caring for a medium-sized parrot costs around $200 a month, just for food and toys. (Parrots, she explained, are highly destructive creatures and regularly destroy toys.)
She says she would try to rehome the birds to caretakers she knows love parrots, but that could take some time.
Ng reiterated the need to reach out to your beneficiaries. “You don’t want your pet’s recipient or fund manager to find out they play this role at the funeral,” he said.
For her part, Garratt said setting up a separate life insurance plan to cover pet costs was just common sense. She started planning for it decades ago, when the premium was $112 a year. Now it is fully paid up and worth about $24,000, she said.
She has no doubt that her daughter will provide excellent and loving care for her animals.
“It’s just like any other part of your financial planning,” she said. “You have to go to great lengths based on who you know, and who would do what you would want or need if you were unable to do so.”
Leave a Reply