Pets and Your Estate Plan (Everything You Need to Know)

Posted on 9 April 2021 Back to News

Donna MacFarlane

By: Donna MacFarlane

Partner, HGR Graham Partners LLP

Email Donna

What will become of your pets if you die before they do? A good estate plan includes arrangements for the care of your animal companions after you pass.

Canadians are avid pet owners.  According to a recent report of the Canadian Veterinary Association, 58% of Canadian households report they own at least one dog or cat.

In 2020, the Canadian dog population grew to 7.7 million. Cats outnumber dogs, with 8.1 million cats as household pets in 2020. However, cats and dogs aren’t the only objects of Canadian pet affection. Nine percent of Canadians own other types of pets, including fish, birds, and small mammals such as hamsters, sugar gliders and reptiles. Some pets, such as some snakes, and birds (Macaws and Grey Parrots for instance) can live upwards of 30 to 50 years. Your pet could potentially survive you by many years.

There have been some jaw-dropping bequests to pets in other jurisdictions.  Countess Karlotta Libenstein of Germany left approximately $106 million to her German Shepherd, Gunther III in 1992. Her trustees invested the money and tripled the dog’s fortune. When Gunther IV was born, he became the wealthiest dog alive, with a net worth estimated at north of $300 million dollars. Gunter IV makes Tardar Sauce, (better known as Grumpy Cat), the American Internet celebrity cat, who had lifetime earnings of about $99 million dollars before she died at age 7 in 2019, look rather insignificant by comparison.

The human-animal relationship can be a profoundly emotional connection. Clients often have the care and management of their companion animals top of mind when they consider their estate plan. Despite the deep emotional bond that develops between pets and their humans, it is important to note that pets are treated as personal property by the Ontario Courts, on par with a vehicle or a bank account. Consequently, in Ontario you cannot leave your estate, or any portion of it, directly to your pet.

Since your pet cannot receive the benefits of your estate directly, there are other approaches that can be employed to ensure your furry or feathered friend is cared for after your passing.

Leave Fido as a Gift

One option is to leave your pet to someone you trust to care for the animal after you die. Pet ownership can be expensive, so clients will sometimes leave a specific bequest of money to the person to whom they are leaving the animal, to defray expenses of the animal’s care.  According to an annual spending survey, the average household in Canada spent $756 on pet expenses in 2019. These expenses include money spent on pet food, travel accessories, toys, clean-up products and veterinary care. A simple calculation of the average annual expenditure on your pet, multiplied by the pet’s likely life expectancy, can form a rough and ready approach for the calculation of the bequest to be left to the person who inherits your animal companion.

This solution is reasonably simple and can be effective. The success of such an arrangement depends on the competency and trustworthiness of the person to whom you leave your pet. If the beneficiary of your pet doesn’t manage the care of your pet or the money provided responsibly, or, if s/he becomes bankrupt and the bequest is seized by creditors, your intentions for your pet could be thwarted. It is sensible to ensure in advance that the person to whom you intend to leave your companion animal, is willing to take on this responsibility.

Trust For Pet Guardian

A more formal arrangement can be employed whereby you leave funds in a trust specifically created to care for your pet, with a trustee appointed to manage the distributions from the trust, to pay for the feeding and grooming needs of the pet, or to pay for veterinary expenses. However, pet guardian trusts can only extend for a period of 21 years, which may not be suitable for some longer-lived animals such as horses or some birds or reptiles.

As your pet will not be able to speak up if the trustee is not properly managing the trust, some Will-makers appoint a different person to act as their pet’s guardian, to oversee the trustee and provide an added measure of protection for your pet.

An important consideration in the establishment of a trust to provide for your pet, is the fact that the trustee will have to file annual tax returns for the trust so long as it holds funds for the animal.

You will also want to consider who is to receive the residue of the trust if there are still funds left after your pet dies. Naming the trustee as the ultimate beneficiary of the balance of the trust may not be the best plan, as it may incentivize the trustee to preserve the value of the trust for his or her own eventual benefit, to the detriment of your pet.

Powers of Attorney

Powers of Attorney can be employed to appoint a person to care for your pet if you are alive but incapable of managing that care. Powers of Attorney are an important part of a comprehensive estate plan.

Pet Stewardship

Not everyone who makes a Will knows someone who can take on the responsibility of his/her pet after they pass. Some animal welfare organizations have implemented pet stewardship programs which can be an option in this event.

An example of an organization that offers a pet stewardship program is the Ottawa Humane Society. The owner of the pet signs an agreement with the Ottawa Humane Society (OHS),and also provides detailed care information about the animal. The pet owner will then bequeath the animal to the Humane Society, along with an agreed-upon fee. On the death of the owner, the Humane Society takes the pet into its care and custody. The Society undertakes to locate a permanent caregiver for the pet. The Humane Society arranges for monitoring visits with the pet, and it retains the right to remove the pet from the foster-family’s care if needed. The Society undertakes not to euthanize the animal except in cases of disease or severe behavioural issues.  Medical care is provided for the lifetime of the animal. The Windsor-Essex Humane Society has a pet stewardship program as well. It is to be hoped that more animal welfare societies will take up this initiative.

Euthanization of Pets

There are instances of Wills which stipulate that the animal is to be euthanized on the death of their owner.   These pet owners are motivated by a concern that their pet would not survive well following the death of the owner. The Will-maker may be concerned that their beloved animal companion could end up in a shelter, or worse, suffer abuse.

As a pet owner has the authority to decide on euthanization for his/her animal companion while the owner is alive, it begs the question: why should a Court intervene to stymie the Will of the owner?  Courts do tend to intervene in these cases, refusing the testator’s expressed wish for his/her animal to be euthanized, usually on the basis that the destruction of a healthy animal is contrary to public policy. As a result of an outcry over such a stipulation, members of the public often come forward to offer safe harbour to the animals left behind.

A 1992 New Brunswick case, Re Wishart Estate (1992) 46 E.T.R. 311 illustrates this principle. The testator Clive Wishart died leaving a Will that provided:

“I direct and declare that my Executors have my horses shot by the Royal Canadian Mounted Police and then buried.”

The R.C.M.P. informed the executors that they would not carry out Mr. Wishart’s instruction without a court order. The matter became a cause célèbre with debates on both sides of the issue, and serious public concern expressed. Strangers signed petitions to save Barney, Bill, Jack and King, Mr. Wishart’s equine companions.

The New Brunswick Court of Queens Bench Court determined that Clive Wishart cared deeply for his horses. He treated them as loved pets. His objective was to prevent the animals from experiencing abuse or neglect in consequence of his death.

The court did not doubt the good intentions of the testator and did not direct criticism toward him in its reasons for decision, rather, stating: “The evidence is clear that he had a great love for his horses, and he was undoubtedly unaware that others would be prepared to provide and care for them and not abuse them.”

The Judge went on to find: “In my opinion, the destruction of four healthy animals for no useful purpose should not be upheld and should not be approved.   To destroy the horses would benefit no one and would be a waste of resources and estate assets even if carried out humanely. …The direction in the Will is therefore void.”

The New Brunswick S.P.C.A. was directed to take over care and control of the horses to find them a good home.

Let’s Talk

While animal companions may be treated as personal property by the Ontario courts, the importance of our relationships with our treasured pets is a fact of our culture that should not be underestimated. At HGR Graham Partners we recognize this and encourage you to share your ideas and goals for your pets in our discussion about your estate plan. For further discussion please reach out to Donna with your questions.

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