man working on laptop with small white dog on his lap

Many Canadians experience the joys of having a pet. In fact, 8.8 million cats and 7.6 million dogs were considered household pets in 2016.

So, it's not surprising when it comes to estate planning, Canadians want to make sure their pets are well cared for after they're gone.

What are some of the considerations for including your pet in your estate planning?

Thomas Grozinger, principal trust specialist at RBC Royal Trust, explains: "At present, Canadian common law considers pets to be personal property. Therefore, they do not have the capacity to receive gifts made in Wills by their owners."

As part of a movement to improve the legal situation of animals, Quebec has taken a different path – stating that animals are not 'things' but are considered 'sentient beings and have biological needs'. However, it appears that this does not give animals in Quebec legal clout per se such that they can be the recipients of gifts.

Here are four ways to include your pet in estate planning:

1. Testamentary gift

One estate planning option is to make a gift in your Will of your pet to a trusted individual, along with money to enable that beneficiary to care for your pet during your pet's life.

"This may be a simple solution, so long as your beneficiary does not die before your pet, or become insolvent or bankrupt with the result that the gifted money might vanish into the hands of creditors," explains Grozinger.

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2. Pet trusts

What about creating a trust specifically for your pet? A trust is where a third party holds funds for the benefit of your pet. There are a few matters you will need to consider. For example, there is no guarantee the person you assign to be the trustee will honour the arrangement to oversee your pet, since your pet is not in a position to enforce the terms of the trust. The terms of the trust might therefore provide for the appointment of a 'protector' whose role is to supervise the trustee.

Grozinger cautions: "If you appoint an individual as trustee, what happens if he or she becomes incapable or dies? Including an alternate trustee appointment would be important."

Also, while the common law allows for the creation of a trust for the care of a specific pet, some Canadian common law jurisdictions provide that certain 'non-charitable purpose trusts' (which could include pet trusts) may only last for a period of 21 years. With cats, horses, turtles, and some other pets having the potential to live beyond 21 years, a pet trust may not achieve your objective of lifetime caring for your pet if the law applicable to your pet trust limits its duration.

In Quebec 'private trusts' could be used to benefit a specific pet; and Quebec law permits private trusts to be perpetual. Not to be overlooked are tax considerations for validly created pet trusts, including the requirement for trustees to file annual tax returns under Canadian income tax rules.

3. Pet foster programs

Another option is to check with your local Humane Society for a “foster" program. For example, the Ottawa Humane Pet Stewardship Program allows a pet parent to enter into an agreement where a search is carried out for a suitable caregiver or steward following the owner's death.

The agreement allows owners to provide wishes concerning the level of care for their pet. If the pet is gifted to the OHS in a Will, upon death, the OHS will take custody of the pet and search for an appropriate caregiver with whom to place the pet. The OHS will monitor the pet arrangement and could take back the pet if there are issues with the care being provided.

4. What if you become ill?

While ensuring your pet is properly cared for after your death is important, don't forget to also consider arrangements for your pet should you become incapacitated. In such a case, your Will does not apply.

You may want to consider putting instructions in your enduring or continuing power of attorney for property (a Protection Mandate in Quebec) which survives your incapacity, and enables your appointed attorney (mandatary in Quebec) to manage your assets and property, including care for your pet.

When it comes to planning for the care of pets in your estate plan, it's important to speak to legal counsel and seek advice around the laws applicable in your jurisdiction.

RBC Royal Trust and RBC Wealth Management are business segments of the Royal Bank of Canada. Please click the “Legal” link at the bottom of this page for further information on the entities that are member companies of RBC Wealth Management. The content in this publication is provided for general information only and is not intended to provide any advice or endorse/recommend the content contained in the publication. ®/TM Trademark(s) of Royal Bank of Canada. Used under licence. © Royal Bank of Canada 2018. All rights reserved.