As the famous saying goes, “a dog is for life, not just for Christmas”.
Pet owners rarely contemplate the possibility that they could be outlived by their beloved furry friends. Those that do, however, sometimes go to extreme lengths to ensure that their pets are well-looked after in the event of their death.
That said, a number of potential issues arise when seeking to provide for pets in a will:
1. Gifts to pets
Clients have asked to include legacies of cash sums to pets in their wills, with the largest sums sitting somewhere in the region of £50,000 to be left to a cat. However, for a legacy to be successful, the recipient must be able to give a good receipt of funds. This means that, as a pet is not capable of acknowledging receipt of funds, an owner is unable to give a pet a sum of money or property directly.
We have seen conditional legacies to individuals, paid only if they care for a beloved pet. This cash gift will pass to the individual, even if they only care for the pet for a short time. They will not receive anything if the pet dies before you.
Another option sometimes suggested is to set up a trust with funds to care for the pet for their lifetime. It terminates on the death of the pet, and the funds pass to named individuals or a charity. The costs of running such a trust may well outweigh the benefits and the beneficiaries of that trust would be named individuals, paid conditional upon them caring for the pet, not to the pet itself. There would be tax implications for the named individuals on receiving funds from such a trust and they may not wish this to impact their personal tax affairs.
However, being cautious lawyers, and not wishing to appear cynical or jaded, we advise that it would be difficult for the executors to ensure that the life of the pet was not foreshortened in any way following your death, whether there is a fixed cash sum gift or a sum in trust for the pet’s lifetime.
2. Unusual requests
A testator can also give specific instructions to their executors relating to their pets. A particularly unusual request previously dealt with by the firm was a wish from a pet owner for their executors to dig up the remains of their pet, so that they could then be buried together. For any unusual request, it would be advisable to ensure that your executors are aware of the nature of your instructions and are willing to action them if necessary. The costs would need to be reasonable and would be paid out of the estate, before any distribution of funds to the beneficiaries.
3. Inheritance tax valuations
In the eyes of the law, pets are seen as the property of the owner in the same way as other possessions eg. furniture. From a tax perspective, they should therefore be valued and taxed in the same way as the deceased's other property.
Despite owners often viewing their precious pets as priceless HMRC will want to see a fair market valuation depending on certain factors including age, breed, income potential etc. For example: a thoroughbred racing horse or a rare tropical koi fish may require a professional valuation, whereas an aged hamster will likely require a more informal valuation, if at all.
The RSPCA provide useful guidance to help pet owners consider pet care after their death and a “Home for Life” scheme.
If you have any questions about the legal aspects of providing for a pet, or would like help putting together a robust pet care arrangement, please contact the private client team at Russell-Cooke.