I left money for my pets in my will. Will they actually get it?
By attorney, Lydia L. Mann, Esq.
Why Nebraska pet trusts often go unfunded, and what to do instead
Most people who want to provide for a pet after they die do it the obvious way: a paragraph in the will that sets money aside and names someone to look after the animal. Nebraska law backs that up. For a lot of people, though, that paragraph will never have a dollar behind it.
Your will only controls part of what you own
This part surprises people, and it is not really about pets at all.
Your will governs your probate estate, which is the property that actually passes under the will. A great deal of what you own probably does not.
A house with a transfer on death deed goes straight to the people named on the deed.
Your 401(k), your IRA, and your life insurance go to whoever is on the beneficiary form.
Bank accounts marked payable on death, and brokerage accounts registered transfer on death, go directly to the person named.
None of that passes under your will. Your will never touches it.
If you have done any planning at all, and especially the kind meant to keep your family out of probate, your probate estate may be far smaller than your net worth. For a lot of Nebraskans it comes down to a checking account and a car.
That small pile is the only place a will-based pet trust can be funded from.
Three things get paid before your pet trust
Out of whatever is in the probate estate, the order is:
The costs of settling the estate. Court costs, attorney fees, the personal representative.
The exempt property allowance. More on this in a moment.
Your debts.
Only after all three is there anything left for the gifts in your will, including the one you made to your pet trust.
The second item is the one almost nobody expects.
Nebraska gives a surviving spouse $12,500 off the top of the estate, ahead of creditors and ahead of anything in the will. If there is no surviving spouse, that money goes to the children instead, jointly.
And here is the part that catches people: the statute does not require the children to be minors. Adult children qualify. A 45-year-old with a career and a mortgage has the same claim as a ten-year-old.
The allowance has priority over nearly every claim against the estate except the costs of administration, and a will cannot take it away from a surviving spouse. Children lose it only if the will disinherits them outright, leaving them nothing or a nominal amount of ten dollars or less. Few parents want to make that trade to fund a pet trust.
It is scheduled to rise to $17,500 for deaths on or after January 1, 2027.
What this looks like in practice
Picture someone with a paid-off house passing by transfer on death deed, retirement accounts and life insurance with beneficiaries already named, about $11,000 in the bank, an older car, and a $9,000 balance on a personal loan. Her will sets aside $15,000 for the care of her two cats.
When she dies, the house and the retirement accounts and the insurance go where the deed and the forms say. They never enter the estate.
What is left is the $11,000 and the car. The costs of settling the estate come out first. Then $12,500 to her adult children. Then the $9,000 loan.
There is nothing left. The $15,000 for the cats is a sentence in a document, not a fund.
And this is the important part: lowering the number would not have helped. The problem was never the size of the gift. The problem is that the pipe it was supposed to flow through is empty.
What works instead
Create the pet trust as its own document, now, while you are living, rather than as a provision inside your will.
That one change solves two problems at once.
It can be named on a beneficiary form. Once the trust exists, you can name it as the beneficiary of a specific account, sized to whatever you want set aside. The money goes straight to the trust. It never enters the probate estate, so the allowance and your creditors never reach it.
Banks and brokerages will actually accept it. A trust created by a will does not legally exist until the will is filed with the court and admitted. Financial institutions generally will not name a beneficiary that does not exist yet. Some say so outright in their account agreements, and treat a non-existent beneficiary as having failed to survive you, which means the designation simply fails. An existing trust does not have that problem.
While you are at it, put a small amount of real money into the trust during your lifetime. A few hundred dollars is enough. Whoever takes your animal is going to need food and possibly a vet visit in the first week, not in the second month after a death claim finishes processing.
Two more things worth knowing
Think twice before using the 401(k). It is tempting, because it is usually the biggest number on the page. But the IRS treats retirement accounts very differently depending on who the beneficiary is, and a trust for animals does not count as a person. The payout gets compressed and the money is taxed at trust rates, which reach the top bracket far faster than personal rates do. Depending on the facts, you can end up pulling $22,000 out of the account to leave $16,000 behind for the animal. An ordinary investment account usually does the same job for a fraction of the tax.
Name someone to enforce the trust. Nebraska lets you appoint a person whose job is to make sure the money actually gets spent on the animal. If you do not name anyone, someone who cares about the animal has to petition a court to appoint one.
Pick someone other than the person caring for the pet. The caretaker holding the checkbook with nobody looking over their shoulder is not a good structure, even in families where everyone trusts each other completely.
The short version
A pet trust in your will is only as good as what passes through your will. If you have named beneficiaries on your accounts and put a transfer on death deed on your house, which is usually good planning, you may have accidentally left your pet trust with nothing to work with.
It is a fixable problem. It is much easier to fix now than for your family to discover later, while they are also trying to figure out who is taking the dog.
If you have animals and you want to be sure they are provided for, we are glad to walk through the options with you.
More on planning for your pets
How Do You Protect Your Pets If Something Happens to You in Nebraska?
What Happens to My Pet If I Die? Planning for Your Fur-Family in Nebraska
Nebraska statutes referenced
Trusts for the care of an animal: Neb. Rev. Stat. § 30-3834
Exempt property allowance: Neb. Rev. Stat. § 30-2323
This article is general information about Nebraska law. It is not legal advice, and reading it does not create an attorney-client relationship. Laws change, and this article may not reflect the most recent developments. Every estate is different, and the right structure depends on what you own and how it is titled.