According to InvestmentNews, Americans spend billions each year caring for their pets, yet many overlook how their companions will be provided for if their owner dies or becomes incapacitated. A recent J.P. Morgan Wealth Management white paper highlights the growing role of "pet trusts" as a planning tool to ensure long-term care for animals.

A pet trust is a legally enforceable arrangement that sets aside funds specifically for the benefit of a client's pet. The trust designates a trustee to manage the assets and a caregiver to carry out the pet's daily needs. Unlike informal promises, a pet trust provides a structured plan for food, medical care, and other expenses.

InvestmentNews reports that detailed instructions are critical. Owners can specify health needs, preferences, and any unique requirements. Once the terms are set, clients must fund the trust. This process includes estimating future expenses, accounting for inflation, and deciding whether to contribute the full amount upfront or rely partly on asset growth. Regular review of the trust ensures it stays relevant as the client, pet, or chosen fiduciaries experience life changes.

Pet trusts are not new, and some have gained notoriety. Leona Helmsley famously left $12 million to her dog Trouble, though a judge later reduced it to $2 million. Michael Jackson reportedly set aside $2 million for his chimpanzee Bubbles, who had already been moved to a sanctuary before Jackson's death, according to InvestmentNews. For some clients, a power of attorney can also serve as an alternative. This arrangement authorizes another person to manage the client's affairs, including care for pets, if the client becomes unable to do so.

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