A pour-over will is created along with a trust to ensure that all assets avoid probate upon a testator’s death. The assets will then be transferred to the trust after death and distributed according to the instructions in the pour-over will.
A pour-over will is particularly useful when the testator forgets to include an asset in their trust. This could happen, for example, if they bought a vehicle but did not title it in the name of their trust.
What is a Pour-Over Will?
A pour-over will is a special type of last will and testament that can be used in conjunction with a trust-based estate plan. It allows you to ensure that any assets that were not titled in the name of your trust are included in the distribution process.
Ideally, when you set up a trust, you transfer all of the assets you own into it immediately. This is the best way to avoid probate and keep your assets safe.
However, sometimes it can be difficult to get all of your assets into a trust. This is why many people create a living trust and then execute pour-over wills that direct any remaining assets into the trust upon their death.
Without a pour-over will, any remaining assets not in the trust would have to be settled through the laws of intestate succession. This can result in your assets being distributed in a manner that you may not have wanted.
Pour-Over Wills Avoid Probate
If you have a revocable living trust in your estate plan, it may be possible to avoid probate. Probate is a court-supervised process that includes paying creditors and distributing property to beneficiaries.
A revocable living trust, however, must be funded with assets before it becomes effective. If you fail to fund an asset into your trust, it will likely require a probate proceeding after your death.
You could have a life insurance policy that you forget to designate a beneficiary or a brokerage account that you don’t transfer into your trust before your death.
In these cases, a pour-over will can address this problem. A pour-over will is a will that directs the personal representative of your estate to transfer any property not in your living trust to your trust at your death.
A good pour-over will should also provide instructions to your executor about how to proceed if the personal representative is unable or unwilling to act as your trustee. This will make it clear to your executor that the trust will be the primary vehicle for distribution of your estate.
Pour-Over Wills Catch Inherited Assets
In order for you to avoid lengthy probate proceedings, you must move your assets into a trust before you die. Once you do that, your trustee will collect your trust property and distribute it to the beneficiaries of your trust.
If you do not move your inherited assets into a trust, those assets will pass to your heirs according to state inheritance laws (and sometimes to a spouse or other relative you may not want).
When you execute a living trust, you can include pour-over will language in the document that will catch any assets you haven’t already moved into your trust. This will help keep you from having to go through a lengthy, expensive probate process and can help you avoid inheritance taxes on your assets.
In addition to avoiding probate, using a living trust and a pour-over will can simplify your estate plan by eliminating multiple distribution plans. You will also be able to leave specific instructions on how your assets are to be distributed and to whom, making it easier for your loved ones to understand and respect your wishes.
Pour-Over Wills Catch Unclaimed Assets
A pour-over will is a testamentary device that automatically transfers any assets that the testator did not transfer into their living trust before they died. This may include a variety of personal items, including motor vehicles.
While it is always a good idea to transfer all of your assets into a trust, there are times when people get sidetracked or simply run out of time. This can cause them to fail to fully fund their trusts and leave unfinished business behind.
Many people use revocable living trusts to avoid probate and keep their estates private. These trusts allow grantors to direct who receives their property after their death without having to go through the courts, which can be a lengthy and expensive process.
However, if grantors forget to fund their trusts with assets that they did not already own prior to their death, these assets may pass to the heirs according to intestate succession laws. This can result in an uneven distribution and may make a grantor’s family members unhappy.