Pets form emotional part of people's lives and having an executor to step in can provide peace of mind
Estate planning takes in all aspects of someone’s life but there is one often overlooked aspect that can carry emotional heft – clients' pets.
If someone passes suddenly or becomes incapacitated and unable to manage their affairs, having someone ready and willing to look after a dog, cat or even an animal as time-consuming as a horse, is crucial.
Melanie McDonald, Vice-President and Regional Director, Trust & Estate Services, BMO Private Wealth, told WP that pets are an important and emotional part of people’s lives and, therefore, it’s prudent to have an executor who can step in and help right away.
She added: “Then they should have a longer-term plan of who can take care of their pet for their lifetime in a will or in a power of attorney. It’s important to pick a couple of people because depending on timing, the first person may not be able to take care of the pet.
“The other part is, if someone has agreed to take on this responsibility, that you leave some money for them. Pets have day-to-day expenses, and food and vet bills. Then people can also give a little extra amount as a thank you gift for taking on that responsibility.”
Having a good advisor who can walk a client through different scenarios is financial planning 101 and McDonald believes pets should naturally come up as part of this process. Helping someone deal with the emotional aspect of what happens to their furry companion can give them vital peace of mind.
McDonald added: “I think one thing that people often forget is that we also deal with incapacity. So if some is in a coma or has lost mental capacity, we do powers of attorney or healthcare directives. It’s important that if you can’t manage your own affairs, you don't just deal with them in your will, but also in a power of attorney.”
There is also the option of creating a purpose trust, so you are giving someone the money for the pet’s lifetime. This is, however, more complicated because it’s not for a human being and different provinces have different laws for setting these up.
“It's easier just to say, if my friend Bob takes my dog, I want to give him a check for $10,000,” said McDonald, “and then you trust Bob to use the money the way that you outlined.”
She added: “We deal with people with all different situations, with many animals or a few cats or even horses and things like that, so all those type of situations need to be covered. If you are giving somebody responsibility, you want to make sure that they agree to it and are able to handle it.”
