Have Pets? Then You Should Also Have This

Is it better or worse when our furry friends outlive us?

The decision of whether to get life insurance -- and how much to get -- can be complicated. It can vary a lot based on your personal situation. Most importantly, it often comes down to whether or not you have dependents.

But while most of us think of a spouse and children in this context, there's another kind of dependent that should also be considered: pets. After all, your pets will still need love and care even after you're gone.

So, if someone has pets (of any kind -- we're not just talking about dogs and cats here), they should also have at least a small life insurance policy dedicated to taking care of them -- and a will that designates their new caregivers.

Life insurance for pet care

Now that we've established that pet owners need some kind of life insurance, we have to tackle the question of how much. And the answer to this will depend entirely on the pets and on the type of lifestyle the owner expects them to have.

The first place a pet owner should look is their own bills. They should check their budget (or credit card statements) to see what they generally spend on pet care over the course of the year. Factor in all of their associated costs, including:

• Food
• Medicines
• Medical care
• Pet insurance
• Daycare/boarding
• Toys and treats
• Maintenance items

Once the pet owner has an annual number, they can multiply that by the years thier pet is likely to live. In general, large dogs have shorter lifespans, while small dogs and cats can live much longer. It may be best to err on the side of a pet living longer so the funds last.

Pet owners may also want to investigate any potential issues their pet may have later in life. For example, a dog's breed could be prone to certain illnesses that may be expensive to treat. It's important to get an idea of what this may run, then add it to the total.

Don't forget the will

Another important aspect of planning for a pet's future is to ensure someone can care for them. It's best to get this decided well before it's needed.

Pet owners should make sure to discuss this with their friend or family member ahead of time. (It's not a good idea to spring this on them in the reading of the will!) It may help to let them know plans are being made for a pet's financial future so the furry family member won't be a burden after the owner is gone.

If an owner only has a will, they'll need to make peace with the idea that there's only so much they can control about how their pets are treated after their death. Under the law, pets are generally considered to be property (yeah, I hate it, too!). As such, while pet owners can direct ownership of their pets, it may be hard to dictate specifics about how they're treated.

Additionally, owners can't generally leave property or money directly to their pet in their will. Instead, they can leave the money to their designated caregiver and request that those funds be used to care for the pets.

Alternatively, pet owners can look into setting up a trust for which a pet is the beneficiary. This can give owners a lot more control over what is done with their pets -- and with the money set aside for them. Keep in mind that pet trusts are not valid in all states.

No matter which route you take, consider consulting a legal professional, particularly one who specializes in wills and trusts and/or estate planning. They will know your state's laws and the best way to ensure your pets are cared for in the manner you would do so.