What Is Pour Over Will?

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“Last wills and testaments are among the most critical documents in any estate plan, as they allow you to determine how and to whom you distribute your assets after death. If you choose to create a living trust instead, you should consider having a pour-over will if you plan to use the Trust primarily to distribute assets after death.”

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What Is Pour Over Will?

What is pour-over will? Pour-over will transfer your assets to your Trust after you die as a kind of “safety net.” Think of them as a “safety net,” capturing anything you neglected to include in your Trust.

 

Pour-Over Wills: What Are They?

Alongside the Living Trust, a pour-over can be a part of the Trust and will transfer to the court any assets you did not place during your lifetime and that you would like to leave to your Trust at the time of the death of your beneficiary.

To avoid confusion, a will should not include properties you have already transferred to a trust. A pour-over will is a way to ensure assets that do not appear in your Trust survive as if you had died without one. It is known as “dying intestate.”

If this happens, your non-trust assets will go according to the laws of your state. Your wishes may differ significantly from those of your state.

 

The Pour-Over Will Process

Whenever transferring assets after the grantor’s death, trusts provide a way to avoid probate, which is often lengthy and costly. A pour-over will work in conjunction with a living trust. If the estate settles, the assets in the Trust go to beneficiaries following the grantor’s instructions.

When a grantor dies, a pour-over will take care of assets they had not put into Trust, whether accidentally or intentionally.

Even though pour-over will still need probate, the remaining assets are subject to the laws of intestate succession applicable in the jurisdiction where the deceased died absent explicit directions in the Will. It is possible, therefore, that the assets will pass in ways the individual would not have desired.

Pour-overs, instead, direct the transfer of assets to the Trust, where they are distributed according to the grantor’s wishes, though not necessarily as soon as if the assets were already there.

A pour-over will also be valuable for protecting trust assets from legal issues. If the Trust becomes invalid or an unfunded trust becomes difficult or impossible to fund at the time of the grantor’s death, the assets intended for the Trust will pass to the Trust’s beneficiaries.

 

A Will versus a Pour Over Will – What’s the Difference?

You can use a Pour Over Will to catch any assets you’d like to include in your Trust instead of just a Will.

Creating the Pour Over Will can achieve a simple, complete, and private result. Estate Planning experts consider trusts valuable and worthwhile because they offer tax advantages, privacy, and many other benefits. An asset in a simple Will (rather than a Living Trust) would not reap the same benefits as an asset in a Living Trust.

 

The Revocable Trust and the Irrevocable Trust

It is common for estate plans to include pour-over wills and living trusts, which specify assets that will pass to the Trust before the grantor’s death. Smaller estates come with revocable living trusts, which allow the grantor to keep control over the assets in the Trust until their death.

It is common for estates with many beneficiaries to use irrevocable trusts to reduce the expected tax burden for beneficiaries. Once assets pass to an irrevocable trust, a trustee can only access them. Regardless of the type of Trust, pour-over wills can work.

 

Is A Pour-Over Will Necessary?

As assets not transferred to your Trust are part of your “estate” at your passing, they will still belong to the estate regardless of whether the Trust exists. In other words, assets will pass to certain heirs if you do not create a pour-over will, so assets will pass to certain heirs if you do not create a pour-over will.

You may not want your assets to go to these heirs, so your trust beneficiaries may not be your intended beneficiaries. A pour-over ensures the distribution of your funds by the intentions you have set, as stated in the previous paragraph.

 

Is There A Probate Requirement For Pour-Overs?

According to your state’s probate laws, your estate may be subject to probate if your pour-over will deals with personal assets, not trust assets. In many states, estates with more than a specific dollar amount in assets or real estate must undergo probate. Small estate carve-outs, however, make it easier for estates with less than a specific value to avoid probate.

 

What Are The Steps For Writing A Pour-Over Will?

Pour-over wills are relatively simple to create. All you have to do is:

 

What Are The Steps For Writing A Pour-Over Will?

 

Make sure you have a living trust in place.

Creating a living trust before making a pour-over will is necessary. The estate planning attorney may assist in making your living trust if you have a large or complex estate. Creating a revocable living trust online is possible if your estate is straightforward. California residents can benefit from Attorney Real Estate Group’s free revocable living trust tool.

A trust involves many decisions, including selecting the type of Trust that will work best for you, transferring assets to your Trust, and deciding who will receive individual assets. Choosing a trustee is a vital decision. This person handles managing your Trust and distributing the Trust’s assets after your death following your trust document.

 

Assign your pour-over will to your trustee.

Once you’ve established your Trust, it’s time to ensure your pour-over will is in order. Your pour-over will begin by naming a residual beneficiary. This person will receive your residual estate — the assets you have not transferred into your Trust before you pass away. You should name your trustee as your residual beneficiary if you wish to transfer your residual estate to your Trust.

You should list your trustee’s name instead of just using their own since they will inherit the residual estate in their capacity. Instead, list them as “the trustee” of your Trust and describe it precisely and carefully.

 

Appoint an executor of the Will.

The executor will also transfer the residual estate to your Trust if you specify this in your Will. A trustee controls the assets your executor transfers to your Trust as part of the will executor’s transfer.

Some prefer naming two different people as executors of their wills since there is only one point of contact for both Trust and estate. A trustee often serves as a trustee and executor of their Will. This prevents everyone from controlling everything in your estate by creating checks and balances.

The people you choose to manage your estate should be someone you trust and who gets along well with each other.

 

Plan your estate in consideration of your other needs.

You can also handle other estate-planning issues with a pour-over will, just as with a traditional will.

  • If you have minor children, nominate a guardian to look after them.
  • Pet guardianship nominations
  • Living trusts usually do not include everyday vehicles like cars and motorcycles.

 

The Benefits of Pour-Over Wills

There are several distinct advantages to combining a pour-over will with a living trust:

 

Privacy.

It is private to establish a trust, not to be publicized, as is the case with wills. The distribution of your estate remains private when the rest of your estate is transferred into your Trust upon your death when your pour-over will. No one can look up who inherited what from your estate.

 

Comprehensiveness.

In most cases, no one is so well-organized that they can transfer all their assets into a living trust before they die. Almost everyone forgets something or misses something important. A pour-over will make sure nothing is left out.

 

Simplicity.

You can distribute your assets clearly and effortlessly to your executor once your remaining assets pass to your living trust.

 

Ability to name a guardian.

You can choose the guardianship of your minor children using an over-the-counter will, but it is impossible to use living trusts.

 

Pour-Over Will Have Disadvantages.

There are, however, some downsides to a pour-over:

 

It doesn’t entirely avoid probate.

A significant disadvantage to pour-over wills is that they may need probate of all assets that pass through them, unlike living trusts. Using a pour-over will therefore require the very probate you have been trying to avoid by creating a living trust, so at least some of your estate will need to go through it. In the event of your passing, assets already in your living trust will not have to go through probate and can pass immediately.

 

It has potential delays.

Your living trust can remain active until the probate process is complete, and the property covered by the pour-over will pass if your assets destined for the living trust remain in probate.

 

An example of a pour-over will

Here’s how a Pour Over Will scenario might look:

The majority of Rob’s assets reside in his Living Trust. Creating a Pour Over Will explicitly states that “any assets or property that do not appear in my Will at the time of my death, which does not leave to a beneficiary of my Will, should be immediately transferred to my Living Trust to protect myself, his wife and his children.”

In the event of Rob’s death, all the property in his Will goes to probate and then flows to his Trust, which distributes to the Trust’s beneficiaries.

As a result of Rob holding everything in his Trust from the beginning, the process was a bit longer than he would have if he had just let all his assets go through probate and distributed them directly to beneficiaries. Rather than waiting for the Will assets to go through probate first, the Trust assets could have passed faster if the latter s of use).

 

FAQs

 

Is it legal in all states to make pour-over wills?

No state does not recognize pour-over wills.

 

How does a pour-over will work?

You should not include the assets already in your living trust in a pour-over will to avoid confusion after your passing.

 

Is it always necessary to go through probate for pour-over wills?

The state’s laws determine if your pour-over will need probation. Some states do not require probate for estates below a specific value.

 

Is there any advantage to the pour-over will if probate is still required?

Most of your assets will likely be immune from probate if your living trust/pour-over will combination works well. A pour-over will even manage small-estate probate, which is more straightforward, less time-consuming, more private, and more affordable than regular probate if the remaining assets are of a low enough value.

 

When will a pour-over become probate?

In the words of the American Bar Association, an estate usually takes six to nine months to go through the probate process. Probating a pour-over may take less time in some states, but it depends on the state’s probate laws.

 

Is there a tax impact to consider?

Probate fees, estate tax, and inheritance taxes can be a part of the pour-over of your Will based on the place you had it completed and written.

 

Will a pour-over make sense for me?

It’s essential to keep your living Trust up-to-date since a pour-over will catch any property you didn’t transfer to the Trust before you died. But remember that property left in your pour-over will still have to go through probate.

You can set up a revocable living trust through Attorney Real Estate Group for free, including the option of creating a pour-over will.

Hedy Ghavidel

HEDY GHAVIDEL Managing Attorney  Roseville Office  1-866-471-6981  info@attorneysre.com Bio...

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