Future Returns: Why Fido Needs a Trust

Many well-off pet owners have left millions of dollars to their cats, dogs, and even chickens—perhaps most notoriously Leona Helmsley, who left US$12 million when she died in 2007 to her white Maltese dog Trouble.

But because pets are considered property, individuals can’t directly bequeath money to their dog or cat. Instead, they should make some type of arrangement to care for their beloved animals should they become incapacitated or die, according to Annamaria Vitelli, head of PNC Private Bank Hawthorn.

“Pet trusts are often thought of as something wealthy eccentric folks would do,” Vitelli says. “But now it’s becoming mainstream.”

The reason? Close to 70% of households in the U.S. own a pet, she says, so “70% of households need to think about this.”

Also, as of 2016, all 50 states and Washington, D.C., have created statutory provisions for pet trusts, Vitelli says.

At Hawthorn, pets often come up in wealth planning as advisors get to know and understand the families they work with and recognize the value they place on their critters. As the bank has worked more with families in Texas, they are also having conversations with ranch owners about what will happen to horses that aren’t part of a working farm, but are pets, Vitelli says.

Penta recently spoke with Vitelli about what pet owners need to consider when ensuring the care of their non-human loved ones.

Selecting a Caregiver

Whatever plan a family creates for their pet’s future, the main consideration is designating a reliable caregiver, Vitelli says.

Many pet owners have trusted family members and friends who already lend a hand in caring for their pets. Those who don’t have that kind of social network should research organizations that care for animals or animal sanctuaries that can provide for a pet with money set aside by the pet owner.

Vitelli recalls a client who had a parrot and was concerned about who would care for her bird when she died because some parrots can live for 100 years. “The parrot went to a bird sanctuary with their stipend and was being cared for at the sanctuary,” Vitelli says.

It’s also important pet owners let the caregiver they designate know their intentions and understand what’s involved. “You may have the perfect person in your mind, but you shouldn’t spring it on them at the reading of the will—start talking to them now,” she says.

Some potential caregivers may simply not want to do it, or they may be precluded from taking in a pet for some reason. Also, because a caregiver’s circumstances can change, no longer allowing them to care for a pet, it’s important to name a successor who can step in, Vitelli says.

Picking a Pet Trust

Once a caregiver is selected, pet owners can simply set up an informal arrangement with them that includes funds bequeathed in their will to cover costs. But there is no way to legally ensure that any funds designated this way are used to care for a pet. That may not be an issue for those who can rely on trustworthy family members or friends. But for those who have doubts, or don’t have the perfect person to rely on, it’s best to create a more formal structure.

“As much as we love our pets, the law doesn’t recognize pets as people. They are a piece of property, so once you give that property away, how it’s treated by the person who takes it on is not anything you can enforce,” Vitelli says.

Setting up a pet trust can create that assurance. The simplest is a traditional trust, which would be governed by general trust law. In this case, a pet owner needs to name a beneficiary (the caregiver) and needs to fund the trust with sufficient money to care for the pet. A trust also requires a trustee, most likely another individual who can make sure any funds distributed from the trust are spent according to a pet owner’s wishes, and that the pet is healthy and safe.

“So long as the trust complies with the law of the state in which it is created, and state law enforces conditional distributions from a trust, the care of your pet can be enforced in court,” according to a note to client from PNC Private Bank.

State Law Matters

Another option is a statutory trust, which would be governed by the law of each specific state. As with a traditional vehicle, a statutory trust is enforceable, although it must comply with state law. Because these laws can be wildly different state-to-state, it’s important to work with an attorney who knows the statute and can draft a trust.

Pennsylvania, for instance, requires a trust to end when the last pet covered by the contract dies, while other states may limit the trust’s length to at most 21 years. While that accounts for the life of most pets, many animals can live longer.

PNC advises clients to put a reasonable amount of money in a trust to cover a pet’s needs throughout its life, and to make a plan for unused funds to be returned to their estate. But how much is reasonable? That can be difficult for some families to decide, particularly when they are childless and pets stand in for two-legged family members. “It has more to do sometimes with the endearment of that pet to that family member,” Vitelli says.

Also, some states limit how much money a pet can receive, and, as is the case in Florida, penalize “overfunding.” In the year after Helmsley died, for instance, a Manhattan surrogate court judge reduced her dog Trouble’s inheritance from US$12 million to US$2 million, awarded US$6 million to two grandchildren who had been disinherited, and had the remainder go to Helmsley’s charitable fund.

“You just want to make sure you’re not running afoul of a judge’s sensibilities and state rules,” Vitelli says.

As a competitive rower in my long-ago prime I sometimes used a racing strategy called fly and die. Sprinting to an early lead often yielded a fast overall time, even if I couldn’t hold my torrid pace through the finish line.

Some professionals take a similar approach to their desk jobs, starting their workdays with a 5 a.m. to 9 a.m. shift. They are up before the sun—and, more important, before their co-workers—to get a jump on the workday and impress the boss.

Nothing screams go-getter like a predawn email! Getting stuff done early allows them to clock out midafternoon and still look like stars, even if their routines require Ben Franklin-esque sleep schedules and vats of caffeine.

Melissa O’Blenis rises by 4:30 a.m. for prayer and Peloton time before starting her job at the digital consulting firm Argano.

“I just love checking things off my list,” she says. “I need that focus time away from Teams messages, email notifications and text alerts.”

A mother with two sets of twins, O’Blenis, 48, often breaks for her kids’ afternoon sports without feeling guilty or judged. Colleagues jokingly call her Granny because her 9 p.m. bedtime makes the early starts possible. But Granny got the last laugh when she was promoted to a director-level role in March.

More than 90% of knowledge workers want to flex their hours, according to surveys by Slack’s Future Forum . In the pandemic many of us got in the habit of handling personal commitments during standard business hours, then catching up on work tasks later .

Now that the office battle is largely over, fighting a return to rigid, 9 a.m. to 5 p.m. schedules might be workers’ last stand. But managers complain about afternoon dead zones when employees are out of pocket.

The solution for more workers is starting sooner instead of finishing later. Workflow software maker Asana reports that 21.4% of users are logging on between 5 a.m. and 9 a.m. this year, up from 19.8% in 2021. About 12% of work tasks are completed before 9 a.m., the company says, compared with 10% before the pandemic.

Early-bird bosses

Gibran Washington and his basketball teammates at Hofstra University used to run at 6 a.m. He maintained his early wakeups while climbing the ranks in food-and-beverage management.

By 9 a.m. meetings, he had already exercised, meditated and put in a couple of hours of work.

“I always found myself more prepared than my colleagues who hadn’t had their first cup of coffee yet,” says Washington, 40, who doesn’t drink coffee. Now he is chief executive of Ethos Cannabis, a chain of 12 dispensaries in three states, and rises as early as ever.

Waking and working ahead of the pack is a common CEO habit, from Apple ’s Tim Cook to General Motors ’ Mary Barra . Even if your ambitions are less grand than the corner office, starting early could help you stand out for one simple reason: The boss is probably up, too, and taking notice.

Matt Kiger says being the first one into the office helped him catch his manager’s eye and advance after changing careers from education to media sales. He would set his alarm for 5 a.m., hop a train from Connecticut to New York and be at his workstation before 7.

“I thought, ‘What is it going to take to break through?’” he recalls. “‘It’s going to take being there when my boss comes in, already at my desk making phone calls.’”

Now a senior vice president for digital sales at Townsquare Media , Kiger, 47, says much of the daily communication among company leaders happens by text and phone from 6 a.m. to 8 a.m. It’s possible to succeed as a night owl, he says, but people who sleep in risk missing a window when many executives are awake and accessible. While some working parents can’t swing early-morning meetings, others like Kiger say they are the key to being present at kids’ after-school activities.

Getting the worm

Matt Sunshine—whose surname surely predestined him to be a morning person—wakes at 5:30 a.m. to read the news. Then he cycles or takes a Pilates class and is on his computer by 7.

Sunshine is CEO of the Center for Sales Strategy in Tampa, Fla., which helps healthcare, media and professional-services companies generate leads. He doesn’t expect his 55 employees to follow his schedule but says it becomes progressively harder to get his attention as the day goes on and his calendar fills up with meetings. He also tries to log off by 5:30 p.m. for family time, so working after hours won’t necessarily make an impression.

“If you want to get my attention, a good time to get me is first thing in the morning,” Sunshine, 55, says. “Because people know I’m an early riser, I think that does influence other people to do the same.”

Elvi Caperonis’s morning routine is next-level organised. Her alarm rings at 6 a.m. She goes for a run at 6:30. At 7 she showers and eats breakfast. At 7:30 she opens her laptop and sets a timer for 25 minutes. That’s her first block to focus on the most important task of the day before a five-minute break. She repeats the on-off work pattern throughout the day.

Caperonis, a technical program manager at Amazon , makes a daily to-do list with nine items. She rates one critical, three medium-level and five lower-priority. This helps her work efficiently and in the right order.

The 41-year-old works from home in Florida and often picks her daughter up from school at 2:30 p.m., freedoms she has preserved partly by being highly productive early in the day, she says. Much of her job involves identifying potential risks to a project’s success, and when she sends an early-morning alert it arrives really early for company leaders in the Pacific time zone.

“They appreciate having that information first thing when they open their email,” she says. “In my experience, leaders are also early birds.”

Future Returns: Why Fido Needs a Trust

When it comes to estate planning, pets need to be considered, too.

Working a regular day, even into the evening, is for mere mortals. Those out to impress start well before dawn.

Early-bird bosses

Getting the worm