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.

They call themselves TikTok refugees—and the app they are fleeing to is a lot more Chinese than the video-sharing app whose U.S. fate now hangs in the balance.

After Supreme Court justices Friday seemed inclined to let stand a law that would shut down TikTok in the U.S., the Chinese social-media platform Xiaohongshu , translated in English as Little Red Book, has received a flood of American TikTok users. They are looking for a sanctuary or a way to protest the potentially imminent TikTok ban—never mind that they don’t speak Chinese.

Charlotte Silverstein, a 32-year-old publicist in Los Angeles, downloaded Xiaohongshu on Sunday night after seeing videos on TikTok about migrating to the app, which Americans dubbed “RedNote.” She described the move as a “last act of defiance” in her frustration about the potential TikTok ban.

“Everyone has been super welcoming and sweet,” said Silverstein, who has made three posts so far. “I love the sense of community that I’m seeing already.”

By Monday, TikTok refugees had pushed Xiaohongshu to the top of the free-app chart on Apple ’s App Store.

“I’m really nervous to be on this app, but I also find it to be really exciting and thrilling that we’re all doing this,” one new Xiaohongshu user said in a video clip on Sunday. “I’m sad that TikTok might actually go, but if this is where we’re gonna be hanging out, welcome to my page!” Within a day, the video had more than 3,000 comments and 6,000 likes. And the user had amassed 24,000 followers.

Neither Xiaohongshu nor TikTok responded to requests for comment.

The flow of refugees, while serving as a symbolic dissent against TikTok’s possible shutdown, doesn’t mean Xiaohongshu can easily serve as a replacement for Americans. TikTok says it has 170 million users in the U.S., and it has drawn many creators who take advantage of the app’s features to advertise and sell their products.

Most of the content on Xiaohongshu is in Chinese and the app doesn’t have a simple way to auto-translate the posts into English.

At a time of a strained U.S.-China relationship, some new Chinese-American friendships are budding on an app that until now has had few international users.

“I like that two countries are coming together,” said Sarah Grathwohl, a 32-year-old marketing manager in Seattle, who made a Xiaohongshu account on Sunday night. “We’re bonding over this experience.”

Granthwohl doesn’t speak Chinese, so she has been using Google Translate for help. She said she isn’t concerned about data privacy and would rather try a new Chinese app than shift her screentime to Instagram Reels.

Another opportunity for bonding was a photo of English practice questions from a Chinese textbook, with the caption, “American please.” American Xiaohongshu users helped answer the questions in the comments, receiving a “thank u Honey,” from the person who posted the questions.

By Monday evening, there have been more than 72,000 posts with the hashtag #tiktokrefugee on Xiaohongshu, racking up some 34 million views.

In an English-language post titled “Welcome TikTok refugees,” posted by a Shanghai-based Xiaohongshu user, an American user responded in Chinese with a cat photo and the words, “Thank you for your warm welcome. Everyone is so cute. My cat says thanks, too.” The user added, “I hope this is the correct translation.”

Some Chinese users are also using the livestreaming function to invite TikTok migrants to chat. One chat room hosted by a Chinese English tutor had more than 179,900 visits with several Americans exchanging cultural views with Chinese users.

ByteDance-owned TikTok isn’t available in China but has a Chinese sister app, Douyin. American users can’t download Douyin, though; unlike Xiaohongshu, it is only accessible from Chinese app stores.

On Xiaohongshu, Chinese users have been sharing tutorials and tips in English for American users on how to use the app. Meanwhile, on TikTok, video clips have also multiplied over the past two days teaching users the correct pronunciation of Xiaohongshu—shau-hong-SHOO—and its culture.

Xiaohongshu may be new to most Americans, but in China, it is one of the most-used social-media apps. Backed by investors like Chinese tech giants Tencent Holdings and Alibaba Group , Xiaohongshu is perhaps best described as a Chinese mix of Instagram and Reddit and its users increasingly treat it as a search engine for practical information.

Despite its Little Red Book name, Xiaohongshu has little in common with the compilation of Mao Zedong ’s political writings and speeches. In fact, the app aspires to be a guidebook about anything but politics.

Conceived as a shopping guide for affluent urbanites in 2013, Xiaohongshu has morphed into a one-stop shop for lifestyle and shopping recommendations. Every day, its more than 300 million users, who skew toward educated young women, create, share and search for posts about anything from makeup tutorials to career-development lessons, game strategies or camping skills.

Over the years, Xiaohongshu users have developed a punchy writing style, with posts accompanied by images and videos for an Instagram feel.

Chinese social-media platforms are required to watch political content closely. Xiaohongshu’s focus on lifestyle content, eschewing anything that might seem political, makes it less of a regulatory target than a site like Weibo , which in 2021 was fined at least $2.2 million by China’s cyberspace watchdog for disseminating “illegal information.”

“I don’t expect to read news or discussion of serious issues on Xiaohongshu,” said Lin Ying, a 26-year-old game designer in Beijing.

The American frenzy over a Chinese app is the reverse of a migration in recent years by Chinese social-media users seeking refuge from censorship on Western platforms , such as X, formerly known as Twitter, or, more recently, BlueSky.

Just like TikTok users who turn to the app for fun, Xiaohongshu users also seek entertainment through livestreams and short video clips as well as photos and text-posts on the platform.

Xiaohongshu had roughly 1.3 million U.S. mobile users in December, according to market-intelligence firm Sensor Tower, which estimates that U.S. downloads of the app in the week ending Sunday almost tripled compared with the week before.

Sensor Tower data indicates that Xiaohongshu became the top-ranked social-networking and overall free app on Apple’s App Store and the 8th top-ranked social app on the Google Play Store on Monday, “a feat it has never achieved before,” said Abe Yousef, senior insights analyst at Sensor Tower.

Run by Shanghai-based Xingin Information Technology, Xiaohongshu makes money primarily from advertising, according to a Xiaohongshu spokeswoman. The company was valued at $17 billion after its latest round of private-equity investment in the summer, according to research firm PitchBook Data.

Not everyone is singing kumbaya. Some Chinese Xiaohongshu users are worried about the language barrier. And some American TikTok users are concerned about data safety on the Chinese app.

But many are hoping to build bridges between the two countries.

“Y’all might think Americans are hateful because of how our politicians are, but I promise you not all of us are like that,” one American woman said on a Sunday video she posted on Xiaohongshu with Chinese subtitles.

She went on to show how to make cheese quesadillas using a waffle maker.

The video collected more than 11,000 likes and 3,000 comments within 24 hours. “It’s so kind of you to use Chinese subtitles,” read one popular comment posted by a user from Sichuan province.

Another Guangdong-based user commented with a bilingual “friendly reminder”: “On Chinese social-media platforms please do not mention sensitive topics such as politics, religion and drugs!!!”

Future Returns: Why Fido Needs a Trust

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

Chinese users of Xiaohongshu, or Little Red Book, welcome Americans fleeing a feared TikTok ban