WSJ Your Money Briefing - Putting a Pet in Your Will Isn’t Just for the Super Wealthy

Episode Date: August 19, 2024

Pets aren’t an afterthought in estate planning anymore. More pet owners are setting aside funds in their wills for their furry friends. Wall Street Journal personal finance reporter Ashlea Ebeling joins host Ariana Aspuru to discuss the rise of the pet directive.  Sign up for the WSJ's free Markets A.M. newsletter.  Learn more about your ad choices. Visit megaphone.fm/adchoices

So what's it like to buy your first cryptocurrency on Kraken? Well, let's say I'm at a food truck I've never tried before. Am I gonna go all in on the loaded taco? No, sir. I'm keeping it simple. Starting small. That's trading on Kraken. Pick from over 190 assets and start with the 10 bucks in your pocket.

Easy. Go to kraken.com and see what crypto can be. Not investment advice. Crypto trading involves risk of loss. See kraken.com slash legal slash ca dash pru dash disclaimer for info on Kraken's undertaking to register in Canada. Here's your money briefing for Monday, August 19th. I'm Arianna Aspuru for The Wall Street Journal,

filling in for JR Whalen. It's the first face you see when you get home, right when you walk through the door. Your pet. Maybe you've got one or five and they're your best friend. Basically part of the family, right? But like any other family member, do your pets have a spot in your will? It's not just for the super wealthy. More and more people are adding pets to their estate plans. Some people could be up to $100,000.

For some people, $1,000 per pet per year. You have to look at the life expectancy of your pet and how you really want it treated. You can't leave money directly to your pet, but you can assign a caretaker and then you would leave that person money. We'll talk to Wall Street Journal personal finance reporter, Ashley Ebling about it after the break. AI may be the most important new computer technology ever, but AI needs a lot of processing speed and that gets expensive fast. Upgrade to the next generation of the cloud, Oracle Cloud Infrastructure or OCI.

OCI is the single platform for your infrastructure, database, application development, and AI needs. Do more and spend less like Uber, 8x8, and Databricks Mosaic. Take a free test drive of OCI at oracle.com slash wall street, oracle.com slash wall street. Setting aside some money in your will for your pet is becoming more common. So how does it work? Wall Street Journal personal finance reporter Ashleyett Ebling joins me. Ashleyett, I grew up having multiple pets in the home, usually a big dog, a small dog, maybe a parrot. But I've never considered what would happen to them when I'm no longer around,

let alone including them in my will. Why are people doing this? So it used to be just for the super wealthy with horses and maybe long lived pets like parrots, but now that pets are really a member of the family for most families, they're making their way into wills. It's mostly cats and dogs, just because most people have cats and dogs, but it's really everything fish, birds, rodents, and online will estate planning service,

trust and will looked at pets their members were providing for. And there was even a Mexican red-legged tarantula. How are people going about this? Can you leave money for your pets? So that's the technical legalese you need to know. You can't leave money directly to your pet, but you can assign a caretaker and then you would leave that person money. And how do people gauge the amount of money to leave for their pet? Some people could be up to a hundred thousand dollars, for some

people a thousand dollars per pet per year. You have to look at the life expectancy of your pet and how you really want it treated. And then one woman I talked to, she gave extra because she realized she didn't want it to be a burden on the caretakers. How much extra did she leave? Well, she did something called a pet trust.

So not just a little extra, she left $120,000 for her cat's care, but she had 12 cats when she created the pet trust. So not just a little extra. She left $120,000 for her cat's care. But she had 12 cats when she created the pet trust and she now has six. And she did say that the caretakers were coming into a little money. What happens if you don't specify who gets your pets in a will? If you die without a will, the state law determines who inherits everything. And then with no plan, pets can be kicked out of the house. They could be dropped off at a kill shelter, or they could just become one more thing,

basically, for heirs to fight over. And even if you do assign someone to take care of your pet after you're gone, are they legally obligated to do it? So that's tricky too, with a pet directive in your will, where you assign the guardian and you possibly leave the guardian money. There's no court oversight basically at that point. For some people, if they wanna go to a more complicated setup,

they can set up what's called the pet trust. In that case, you have a trustee who is overseeing the guardian and doling out the money and making sure 100% that it's happening. Otherwise, you're really putting your trust in the guardian that you picked. Are people normally talking to their friends or family about this before they put it in their will?

The common scenario is that you have a best friend or a relative who's going to take care of the pet and you just want to leave them the extra money because you figure that'll help with the pet's care and will help the friend. State lawyers do say that a lot of them have it on their intake form now. They'll say, do you have children? Do you have pets? Who do you want to leave your money to? And then they'll explain the thing, how you leave the money to the guardian, not directly

to the pet. But also, estate lawyers I talked to said that clients are bringing it up too. More clients are coming to their estate lawyers and saying, I want to make sure that my 13 year old cat is taken care of when I'm gone. Exactly. And it's not just your current pets. You can have the clause that says any pets that I

own at the time of my death. So it's important to include the future pets. And there are pets that can live pretty long. Parrots and tortoises can sometimes live well into their 50s. That's a lot of money to account for. Donkeys is another example. There's another option for some people who don't have someone who they can pick as a guardian. There are these places called life care centers for companion animals. There's one in Texas that I wrote about in the story, and they have resident cats, dogs,

birds, and donkeys. They're all cases where the owners passed away and then they left money to the care center and the pets are there being cared for. Someone listening might think, okay, I want to make sure my dog gets their walk-in or I want to make sure my cat gets the right-in or I want to make sure my cat gets the right kind of litter or the right toys once I'm no longer around. How can someone make this adjustment in their estate plans? If you already have a will, it can be like a simple add-on. And then if you're doing a will for the first time, it would be just a new one section out of many

sections in the will. So say you have children, you'd certainly have a section on guardians for your children. And then another section on guardians for your children, and then another section on guardians for your pets. And one family I talked to, they made a point how they picked a different guardian for their children and for their pets. The guardian for their children, they wanted to make sure she would be the sister who was a big traveler because the children had relatives in Spain. And then the guardian for the pets was the one who lived near a nature preserve where they thought the dogs would be happy.

What kinds of questions should people ask their state planner when they're trying to get these certain stipulations and just get this language in their will? They could ask, how do I pick my guardian? Or do I need a backup guardian? That's a really important thing. And whether they need the full blown pet trust

or if the pet provision is enough for their case. One estate lawyer I talked to in Oregon, she handled a case where a dog owner died without a will and the owner's partner wanted the dogs, but the legal heir also wanted the dog. Luckily they eventually agreed to share the dog, so it was a happy ending. But that's an example where you really want the provision

in your will so there isn't conflict like that over your pet after you pass away. That's WSJ Reporter, Ashley Ebling. And that's it for your money briefing. This episode is hosted and produced by me, Ariana Aspudu. We had additional production support from Tadeo Ruiz Sandoval. Melanie Roy is our supervising producer. Thanks for listening.