Funds for Fido

Hey there, time traveller!
This article was published 12/10/2019 (2376 days ago), so information in it may no longer be current.

Petey is a much-loved golden retriever with a penchant for snatching unguarded hotdogs and frolicking with his bark buddies in dog parks.

The 11-year-old pooch belongs to Colin Lang and Maria Reitz, both retired and not ones to back away from dropping dollars on squeaky items for Petey’s already sizeable basket of toys.

“He’s pretty spoiled,” says Lang, adding their pet even has a memory-foam doggie bed.

Frankly, the Winnipeg couple will stop at nothing to care for the furry member of their family.

But one thing they haven’t done that is increasingly common among spendthrift pet owners is put their pup in their will.

“We have a couple of kids who are dog lovers, so if anything would happen to us, I’m sure one of them would take him,” says Lang. “But I do know that I am personally in someone’s will as an adopter in the event of her death.”

So there you have it: Estate planning for pets is indeed a thing.

While iconic fashion designer Karl Lagerfeld made headlines recently by reportedly leaving his cat Choupette a chunk of his fortune, more and more, normal folk are making plans for Sparky should they die before he does.

“It is more common today than ever, and I think part of it is just awareness,” says Elizabeth Dorsch, head of trust and estate services with BMO Private Wealth.

In fact “people read about Karl and think, ‘I don’t have $200 million to give my cat, but should anything happen to me, maybe I should have plans for someone to look after my pet.’”

She estimates about 10 per cent of her clients include pets in their estate plans, generally naming someone in the will to take care of them along with a sum of cash to cover cost of care.

“When we do estate plans we do typically we ask: ‘Do you have a pet and have you made arrangements?’”

It’s certainly a sensible inquiry given how many Canadians own pets. The Canadian Animal Institute estimates about 41 per cent of Canadian households have a dog while about 38 per cent have at least one cat.

All in all, about 15 million cats and dogs are valued members of Canadian families, and that’s not including other critters like goldfish, birds and snakes.

We also like to spend on our pets… quite a bit.

Spokesperson for PIJAC Canada (Pet Industry Joint Advisory Council of Canada) Susan Dankert says a recent study found the pet industry in Canada is worth more than $9 billion annually.

Our spending is growing steadily, she adds.

“There’s always been growth even during the recession in 2008 and 2009,” she says. “It really illustrates the priority of the pet within the family.”

To her then, it’s hardly a shock people are putting their pets in their wills.

“In fact in the last couple of years, my husband and I have been asked twice if we would be OK with being listed on someone’s will to take care of their dog.”

Of course, plans for your pet after you’re gone have limits. For example, naming someone to take care of “Sparky” in your will doesn’t mean that individual is legally obliged to care for the pet, Dorsch says.

“It’s more of a moral obligation than a legal one.”

That’s all the more reason to choose the caregiver wisely especially given the individual does not have to use the money you leave for care of your pet on the pet.

Another limitation is you can’t make your pet a beneficiary in the will. For example, you couldn’t leave your home to your goldfish.

That’s “because all pets, including goldfish, are considered property,” she says.’

But you could set up a trust for your goldfish that includes your home and money for fish care and maintenance of the house. It would also need to stipulate the trustee hires a caregiver to provide care until the fish dies and keep up the home.

So, yes, a ‘crazy cat lady’ of significant means could leave her home to the cats, and set aside a trust with money to cover all the costs.

“As a matter of fact, I have seen those situations,” Dorsch says.

While it sounds silly, the idea is worth considering for aging owners who worry about what would happen to their pets if they are unable to care for them.

“For example, they might have recently been diagnosed with Alzheimer’s.” Dorsch adds this would involve creating an inter vivos — a living — trust that can be put into effect while the owner is alive and would continue as long as the pet lives, providing enough capital remains for its care.

While Lang and his wife have not made estate plans for Petey, they certainly understand why others would.

It’s about caring for a loved one, and that often means sparing no expense.

Lang recalls Petey becoming very ill in his first year of life. The couple paid thousands for specialized care in Saskatoon, a leading centre for veterinary health care.

“We’re still paying for that,” he says with a laugh.

But it was worth it.

After all, the dog is family, right?

“Absolutely,” Lang firmly answers.