A large number of people across the country have pets rather than children. And most of these individuals likely want to take care of their pets after death. Thankfully, loving pet owners can create pet trusts with their life insurance to provide the funds necessary for taking care of their furry friends.
Pets Cannot Be Beneficiaries of Life Insurance
Life insurance policies require at least one named beneficiary before payment. Unfortunately for pet owners, their furry pals cannot be beneficiaries. Restrictions on life insurance policies ensure that people cannot name an incapable individual as a beneficiary. Therefore, people who are not mentally competent cannot be beneficiaries, nor can pets.
However, those restrictions don't mean that a pet cannot benefit from their owner's life insurance. Instead of directly receiving the money, pets can receive care when their owner sets up a pet trust using their life insurance benefits.
How Life Insurance Pet Trusts Can Help
A pet trust is a small group - sometimes just a single individual - set up to receive any life insurance money when a person passes away. Once the money from a policy has been paid to the beneficiary of the trust, this individual takes steps to care for your pets.
These trustees cannot merely give the pets away to anybody but must follow the rules created by the trust. In some instances, the beneficiary may take care of the pets themselves. Once a new home has been found for the pets, the money from the trust is given to the designated owner in a controlled way to ensure that they have food, healthcare, toys, and anything else that they need.
Steps That Ensure Pets Get Care
People who set up a pet care trust with their life insurance need to take several steps to ensure things go smoothly. First of all, a beneficiary must be named to control the trust. Somebody who will follow the exact needs of the deceased person is necessary for this position. A loyal and trustworthy beneficiary ensures that all funds of the trust go to the care and well-being of the pets.
Pet owners also need to make sure that they take steps to ensure their pets are easy to identify. Identification is necessary in case that somebody else tries to claim the funds with look-alike pets. Microchips and DNA samples are wise because they ensure easier pet identification. As a result, fraud will be less likely to occur.
Proper pet care needs must be identified before the trust goes into effect. For example, owners need to describe the pet's standard of living, what kind of care they need to be healthy, the types of food they eat, and the veterinarian that they visit. This information helps you decide how to use the trust money to take care of the pets every month.
After the creation of these guidelines for money dispersal, the beneficiary of the trust must ensure that pets get proper care. However, adjustments may be made depending on the needs of the pet. For example, emergency care funds may be necessary if a pet gets sick. Sadly, owners should also allocate burial or cremation costs to take care of their pets after these furry friends pass away.
Take Care of Your Pets
A high-quality pet trust provides animals with the money and care that they need to be healthy. However, pet owners may struggle to set up these life insurance guidelines for their pets, such as calculating how much money a pet gets every month. Therefore, concerned pet owners should contact the American Quality Assurance Group to get help with this challenging process.