How Much Money Should You Leave For Your Pet?

cat surrounded by pile of money

The right amount of money to leave for your Pet Guardian to provide for the continued care, comfort, and safety of your pets in a Pet Protection Plan is different for everyone.

According to Synchrony Financial's "Lifetime of Care" study, nearly half of dog parents admit to underestimating the cost of providing for their pet. Learn how to avoid that mistake and properly estimate the amount of money you should leave for your pet's benefit using a back-of-the-envelope or bottoms-up approach.

Back-of-the-envelope approach

A simple back-of-the-envelope approach is to research how much your type of pet or specific breed costs over their lifetime or per year (a simple google search should suffice) and adjust for the expected remaining life of your pet.

For example, to determine how much money to leave for an eight-year old golden retriever, you might take the one-year cost of dog ownership range of $1270 to $2803 from Synchrony’s “Lifetime of Care Study” and the upper end of 10-12 year life expectancy for a golden retriever to calculate that you should leave approximately $5,000 to $11,200 for your golden.

average annual cost of caring for a cat or a dog
Most pet parents report that the average annual cost of caring for their pets is between $1,270 and $2,803 for each dog and $961 to $2,487 for each cat. Source: Synchrony Financial "Lifetime of Care Study"

Bottoms-Up Approach

To create your own bottoms-up calculation of how much money to leave for your pet, calculate the sum of (i) the product of the average monthly cost of caring for your pet and its expected remaining life and (ii) a budget for emergency care or other extraordinary costs.

Returning to the example of the eight-year-old golden retriever, your regular budget might look something like this:

  • Food - $50 / mo.
  • Recurring health-related expenses (vet visits, medications, pet insurance, etc.) - $80 / mo.
  • Miscellaneous (toys, supplies, grooming, boarding, etc.) -- $50 / mo.
  • Total Average Monthly Expenses = $180 / mo.

Multiplying the $180 / mo. average monthly cost by your golden retriever’s 4 expected remaining years (48 months) of life, the expected cost of continuing to care for your pet is $8,640.

You may wish to supplement this allotment for recurring care with an amount for emergency care or other extraordinary costs not covered by pet insurance. We show in another article that a good target for this emergency pet care savings amount is between $1,000 to $5,000.

Summing the $8,640 recurring care cost with an emergency are allotment of $2,500, this illustrative bottoms-up approach suggests that you should leave $11,140 to fully cover the cost of your golden retriever’s continued care, comfort, and safety, which fits towards the upper end of the back-of-the-envelope approach.

How to leave money for your pet

Pets are property under the law, and therefore you can’t leave money or other property directly to your pet. You can, however, leave money or property for the benefit of your pet. There are three ways to do so:

  1. Make an outright gift to a human beneficiary
  2. Create a pet trust
  3. Create a free Pet Protection Plan

Making an outright gift to a human beneficiary is the simplest approach. You can do so through your last will and testament in as little as one sentence, or you could make the gift while you are still alive through a simple gift to individual, which will be tax-free as long as it is under the federal annual gift exclusion amount, which is $16,000 for 2022. The downside to this outright gift approach is that it is not legally enforceable. The individual to whom you give the funds does not have a legal responsibility to continue to care for your pet(s).

In contrast, a well written pet trust is a legally enforceable way to nominate someone to look after your pet, specify the standards of care that your pet should receive, and leave funds for the benefit of your pet. If you are going to leave significant funds for the benefit of your pet ($20k+), you might consider a pet trust as a way to exercise greater control over the authorized use of the funds. If you are not planning to leave significant funds, however, you may find that the direct and indirect costs of creating and maintaining the pet trust are not worth the incremental protection.

The third option to create a free Pet Protection Plan mirrors the benefits of a pet trust without the associated administrative burden. If you’re a responsible Pet Parent looking to ensure the care, safety, and comfort of your pet no matter what, creating your free Pet Protection Plan is an essential element of your estate plan. Most people make their plan in less than 5 minutes.