Can Your Pet Be considered a Life Insurance Beneficiary?


Like an overeager puppy, people often inquire if they can name their pet like a beneficiary of the life insurance coverage.

The rules are anything but fuzzy: You can't name your pet like a life insurance beneficiary.

Why? Well, a life insurance company needs to provide a policy's payout, known as a death benefit, to the beneficiaries, and pets don’t have bank accounts.

That said, there are some ways to make sure that Fido, Duke or Beowoof is taken care of after you're no longer there to fill your dog dish (or fishbowl, or take out the cat litter). This is a step-by-step guide.

1. Generate a trust

Your options vary by state, but you can set up a rely upon all 50 states and the District of Columbia. So what exactly is it? A pet trust is a legally sanctioned arrangement providing for that maintenance and care of the pets in case of your disability or death, according to the American Society for the Prevention of Cruelty to Animals' Pet Trust Primer.

You can designate a dollar add up to be accessible for your pet's care whenever you die and a caretaker (known as a beneficiary within the trust) for that pet. You also can name another trustee to oversee the funds in the trust and also to make sure the money is allocated to your dog. Based on ASPCA, trusts commonly continue throughout the life of your pet or for 21 years, whichever comes first. (Some states omit the 21-year limit, which as ASPCA notes, is particularly ideal for animals with long life expectancies, such as horses and parrots.)

Both Luis Martinez, a regulatory analyst at Haven Life, and ASPCA claim that you consider talking to an attorney when setting up a trust to ensure it conforms for your state's law. Again, pets don't have accounts, but trusts are the most typical way to ensure that your beloved animals are taken care of if tips over to you.

2. Provide instructions for taking care of your pet

It is helpful to supply your dog's caregiver with detailed information on how to care for your pet. ASPCA recommends providing the following information:

  • Identification information, such as photos, microchips, DNA samples. This can help prevent fraud.
  • Details of your pet's quality lifestyle and care.
  • How regularly your dog should be inspected by the trustee.
  • How much money is needed to adequately take care of your pet, and just how those funds should be distributed to the caregiver.
  • A remainder beneficiary. Essentially, plans for what happens to the cash when your pet dies.
  • What to do with your pet's body once she or he has died.

If your dog has an allergy or any other special considerations, you can make those things clear to some potential caretaker inside your trust agreement.

3. Communicate your plans to your loved ones

Getting a surprise puppy could be fun, although not as it pertains unexpectedly from your dead friend hoping you'll raise it as being your own. This is exactly why you need to let the person you need to entrust together with your pet know that you want her or him to care for your dog when you are gone.

You should also let other beneficiaries understand that a number of your estate is being shared with your dog. Chances are, it's not an enormous percentage of your estate anyway, however, trust us: This isn't the type of surprise someone will appreciate receiving in the future.

4. Make use of your will instead

When developing a will, you can leave superior instructions for the proper care of your pet, so this will have to be really thought out, notes Luis from Haven Life.

That said, providing details and expectations in your will, rather than a trust, offers simplicity and ease for you personally within the present. With a trust, you're spelling out not only who will look after your pet, but how much cash is required, when and how those funds is going to be distributed, and then any other special needs the caretaker should think about. The caretaker will then be legally necessary to use that money exclusively for the concern of your pet.

But if you know and trust someone – just like your spouse, a good friend, or perhaps your adult child – chances are you can leave instructions in your will that that person will take care of your dog after you're gone. You can also leave (non-legally binding) care instructions in a separate document.

Plan ahead could make your dog's life less hard

Pets are family. This is exactly why you need to keep them in mind when creating your end-of-life plans.

Just remember: Caring for your plans with an attorney (or perhaps a service such as Trust & Will) can be a wise decision.