A pour-over will is used with a revocable trust.
The two primary types of estate plans are founded on either wills or trusts.
Goals and life circumstances will generally determine the one used.
Although trust-based plans are built with either a revocable living trust or an irrevocable living trust, they may still include a last will and testament.
Using a pour-over will in conjunction with your revocable living trust can provide greater peace of mind.
A pour-over will serves as an estate planning safety net.
If you have ever been to a circus and watched the tightrope walkers or the trapeze artists, you have likely seen a safety net underneath these skilled performers.
Although these professionals can execute their stunts with great precision, the safety net is present to prevent injury if something were to go wrong.
Similarly, the pour-over will serves as a safety net for any assets not placed in the trust while living or by beneficiary designation at death.
How does it work?
According to an Investopedia article titled “Pour-Over Will Definition and How It Works With a Trust,” the pour-over will designates remaining assets to be transferred to your trust after you die.
As a result, all your property is compiled in a single place to facilitate distribution according to the terms of the trust.
While a pour-over will does not allow these assets to bypass probate, the pour-over will simplifies the administration of your estate for your trustee by consolidating everything into one place.
A revocable or living trust is a legal arrangement.
These are created while you are alive.
With revocable living trusts, you can transfer assets into the trust, manage the trust assets, and edit or revoke the trust anytime before your death.
The main purpose of a revocable living trust is to keep assets out of the probate process to provide a smoother distribution of assets to heirs while protecting privacy.
For a trust to have authority over an asset, the asset must be transferred to the trust.
A pour-over will allows assets accidentally left out of your trust to be distributed according to the terms of your trust after you die.
If you were to purchase a property years after the creation of your trust and forget to title it to your trust, then the pour-over will could protect your intended wishes of distributing the asset via the trust.
Only assets transferred to the trust before a person dies can bypass probate.
All other assets without beneficiary designations must pass through probate.
Pour-over wills are submitted to the probate court to transfer all remaining assets to the trust for management and distribution.
Because pour-over wills generally only apply to a few forgotten assets, the probate process tends to be simpler and less costly.
Although probate laws differ from state to state, pour-over wills can make estate administration easier for your representative.
Although pour-over wills are beneficial, they are not always necessary.
Certain goals and asset profiles make a pour-over will more important.
What are these?
You Have a Complex or Changing Asset Portfolio.
Some people frequently acquire new assets like rental properties, investments, or vehicles.
When assets are constantly being purchased and sold, keeping up with trust titling can be challenging.
Because assets can be easily overlooked, the pour-over will provides some protection for such oversights.
Again, it serves as a safety net.
You Want Flexibility and Control During Your Lifetime.
Revocable living trusts are wonderful tools for providing the ability to continue controlling your assets and making adjustments as needs or goals change.
With a pour-over will, you can maximize the benefits of this trust tool by ensuring your wishes for asset distribution through a trust apply to all of your property.
You are Concerned About Privacy for Your Beneficiaries.
Probate is a public process.
As a result, the last will submitted to the court could be requested and viewed by anyone.
By keeping the majority of your assets in a trust and funneling any remaining ones there through a pour-over will, you can shield your heirs from public knowledge of their inheritances.
Pours-over wills and revocable living trusts can simplify your estate, reduce legal complications, and provide peace of mind.
Distribution of assets is less complicated when all property is subject to the same rules.
With a pour-over will, family disputes over assets or issues with some assets subject to intestate rules can be avoided.
By using the combination of these two estate planning tools, you can be confident your estate plan will not be derailed through forgetfulness.
Pour-over wills are a great safety net but cannot protect your estate from probate.
Any assets left out of your trust will not be shielded from probate.
Although this can be an inconvenience, it will be less of a challenge than if you had no pour-over will to provide extra security.
Ultimately, keeping up on your trust funding is the best solution for avoiding probate completely.
Estate planning should never be done alone.
You will need to work with an experienced estate planning attorney to create the legal documents to ensure your plan works as desired.
If you are considering including a revocable trust and pour-over will in your estate plan, you should take action as soon as possible.
Contact Harvest Law KC to request a consultation with our Overland Park estate planning practice.
Taking action now can provide peace of mind as you prepare for a smooth transition of your wealth to your heirs.
Pour-over wills provide a means for forgotten assets to fund your trust after you have died, simplifying your estate administration.
In combination with a revocable living trust, you can preserve the privacy of your beneficiaries from the prying eyes of the public.
Pour-over wills and revocable living trusts can streamline probate proceedings after you die while providing flexibility in asset management during your lifetime.
This post is for informational purposes only and does not provide legal advice. You should contact an attorney for advice concerning any particular issue or problem. Nothing herein creates an attorney-client relationship between Harvest Law KC and the reader.
Reference: Investopedia (April 1, 2024) “Pour-Over Will Definition and How It Works With a Trust”
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