Wednesday, September 15, 2010

More Inheritances Going To The Dogs


One of the most famous bitches in the United States wouldn't be worth a cent if it lived here.
Leona Helmsley's dog Trouble, which was left US$12-million by the late billionaire, would not be entitled to anything in Canada because, unlike south of the border, where 43 states and Washington D.C. allow money to be left to pets, Canadian estate law stills views animals as property.
But Toronto estate lawyer Barry Seltzer says there are things you can do in Canada to protect your pets long after your gone — a practice that is becoming more common among his clientele.
"I would probably say one in three clients asks for a pet provision," says Mr. Seltzer, who has co-authored a new book with U.S. law professor Gerry Beyer titled Fat Cats & Lucky Dogs. (Prism Publishing Inc., $19.95)
"People realize they want someone to take over the care of their pet. People realize there is a responsibility for them to take care of their pets and if they don't, a lot of them will end up in shelters and euthanized. As the population ages, elderly people are starting to treat their pets more like children."
If you need any proof that America is going to the dogs, take note that it is the only place in the world where you are allowed to leave money directly in a trust for animals.
Thus, Ms. Helmsley, a hotel operator and real estate investor who died with an estate worth an estimated US$5.8-billion, was able to leave cash to her favourite dog. A judge later reduced the US$12-million award to US$2-million — not exactly kibble.
It's more complicated in Canada. "You create a trust for somebody and leave them say, $5,000, and say it's to be used for the care of my dog Rocky," explains Mr. Seltzer.
What's the practical difference between the United States and Canada? It is more complicated to protect the animal here. After all, it's not like your animal is going to hire a lawyer to enforce the terms of the will. In the United States, naming the animal as beneficiary means the person responsible for the trust would have a legal obligation to your pet.
"It's just becomes much more complicated in Canada [to safeguard your pet.] You can put in some checks and balances," says the author.
The first thing to take care of when it comes to looking after your pet after your death is to have a will. About half of Canadians die intestate. No will means you haven't spelled out custody for your animal, let alone your children.
"We are trying to encourage people to plan. If we can encourage people to [think about their pet], maybe we can encourage them to think about their families," says Mr. Seltzer about some of the motivation for the book.
Toronto certified financial planner Jeanette Brox says one of the biggest money issues her clients with pets can face is an unexpected veterinary bill.
"You want to have pet insurance if they have to have an operation," says Ms. Brox, who adds that even with pet insurance, it is still wise to have money saved up for your animal.
"As a planner, I ask people whether they have any major expenses coming up."
Vancouver certified financial planner Alim Dhanji says your financial plan should include an emergency fund for your pet to cover at least three to six months of living expenses. "If anything bad happens to you or your pet, having an emergency fund will save you from a lot of stress and buy you time to figure things out instead of rushing into a decision," says Mr. Dhanji.
He suggests even insurance should factor in the animal, recommending clients purchase enough disability insurance to care for their pet in case they can't. Life insurance can also be purchased and directed to the person named in the will to care for the animal.
"You don't want to leave your pet out in the cold," says Mr. Dhanji.
Perhaps your family doesn't merit you having a will and a financial plan, but what about your best friend?