Specialized diets and haute couture wardrobes keep the pets of the super-rich sitting in the lap of luxury.
When notorious hotelier and reputed Queen of Mean, Leona Helmsley, passed away last August and the details of her will became public, it created a media feeding frenzy—her dog was named the beneficiary of a $12 million trust fund. Less than a month later, the similar (but much larger) trust established by Oprah Winfrey to ensure the future well-being of her pets made the headlines. In an age where the extravagances of the glitterati seem almost commonplace—space flights, anyone?—the actions of these two wealthy and powerful women still had the ability to astound. Why?
Well, some answers can be found by comparing the actions of average pet owners to those of wealthy pet owners. There are, in fact, similarities in the types of pet-related purchases each group made and the percentage of assets each group allocated to pet care. However, having more resources at their disposal clearly allows wealthy pet owners to explore the specialized (some would say over-the-top) services that would be unthinkable and inaccessible to the typical American.
More than 70 million U.S. households have a pet, according to the American Pet Product Manufacturers Association, and annual pet-related spending has more than doubled, from $17 billion to $41 billion, in the past 13 years. The proliferation of cats, dogs, birds, fish, horses and reptiles and the increase in expenditures breaks down to $107 spent annually on treats and toys (about one-quarter of one percent of the $46,000 average U.S. household income) by a typical pet owner. More than half of pet owners confess to buying gifts for their animals in the past 12 months, but it seems that dog owners are more indulgent—they buy up to seven gifts a year (versus the four gifts purchased by the owners of other kinds of pets), 30% regularly buy dental products, and about one-quarter of dogs have their own bed.
To learn more about the luxurious lifestyles of certain pets, we interviewed 304 wealthy individuals who owned at least one pet between 2004 and 2006. Survey respondents had at least $5 million in investable assets, a median net worth of $19 million and considered their pet to be a member of the family.
One of the central findings in the study was the significant amount of money spent by wealthy pet owners on their animals. The individuals surveyed spent an average of $257,000 on their pets in the 12 months leading up to their involvement in the survey, a figure that is likely skewed by a handful of conspicuous consumers. The median spending was $57,000—far less than the average, but an amount that tops the annual income of most U.S. families making it an unfathomable number to many (see Figure 1).
Next, we asked for details on how the money was spent (Figure 2). Wealthy pet owners spend the most on life enrichment services—an area that includes everything from deep-muscle massage and psychic readings to life coaching and “cosmic sensitivity.” The next largest category was specialized diets, with about a third of respondents providing them to their pets. Interestingly, these diets are not for medical purposes such as controlling eczema or weight loss, but rather for lifestyle ones. Many respondents cited organic food as a staple, while others employ nutritionists to create meal plans and professional chefs to prepare the food for their pets.
Roughly 17% of the pets have wardrobes worth $25,000 or more. These wardrobes consist of designer carry-bags, coats and sweaters, boots and jeweled collars. Just 11% of pets have had a birthday celebration with a cost exceeding $25,000, but those that do usually celebrate with other four-legged pals, rather than the human variety.
About one-in-ten of all pet owners have, at one time or another, taken their pet to psychological counseling to tackle behavioral issues. This therapy is, of course, undertaken with other goals in mind; most owners want to help their pets be “happier” or deal with a traumatic experience such as an accident or the death of another pet.
The smallest percentage of spending—but possibly the largest in actual dollars—goes toward private jet travel. Very few pets have flown in a jet without their owners, but in most instances it was cited as the best method to stage a quick reunion between the two.
Looking Ahead All survey respondents had taken steps to provide for their pets in the event of their own death—a finding that may engender some tolerance (or at least understanding) for the plans Helmsley and Winfrey made for their respective animals and send a clear message to advisors with similar clients. Pets should be raised in any estate and charitable planning discussions; helping a client ease his or her anxieties about the future well-being of a trusted companion is an invaluable service that can have many positive side effects for the overall relationship.
Formal arrangements, such as written instructions in a will, were made by about half of all respondents. About a quarter of arrangements are informal, such as planning with family and friends, and a similar number of people say they have both formal and informal provisions to secure long-term care for their pets (Figure 3).
One formal arrangement that is growing in popularity is a trust. Of the 48% that have made formal preparations, about 19% have already established a trust to care
for their pet (Figure 4).
Of greater importance to wealthy pet owners is making sure the designated caregivers will have ample means to look after their pets. About two-thirds of the survey respondents that have made formal preparations have attached assets specifically for their pet’s care (Figure 5).
The amount of money allocated would allow for several years of care at the same levels provided by the owners, with an average of $410,000 and a median of $263,000 earmarked for pet care in the event of the owner’s death (Figure 6).
Given the amount of money in question and the relatively short life span of domesticated animals, it’s likely that many pets will die before the funds have been used entirely on their care and safekeeping. About half of respondents want money that was intended for pet care to go to an animal-related charity upon their pet’s death, while the balance chose to have the assets revert to family or friends. It’s worth noting that these directives can differ greatly based on an individual’s broad interest in animal welfare and their orientation to animals in general, or their animal, in particular (Figure 7).
It would be hard to argue that the affluent love their pets more than individuals with less money, but the intensity of their emotions is exaggerated by the way they use their fortunes to provide for their animals. In fairness to wealthy pet owners, $57,000 represents about the same percentage of their net worth that $107 is for the average American—but there’s no question that five figures can get you a lot more puppy chow.
