A pour-over will is a key estate planning tool designed to ensure that any assets not explicitly included in your trust during your lifetime are still transferred into it upon your death. It acts as a safety net, ensuring that all assets are eventually managed and distributed according to the terms of your trust, even if they weren’t initially placed into the trust. Here's how it works and why it can be beneficial.
1. The Purpose of a Pour-Over Will
The main purpose of a pour-over will is to "catch" any assets that were left out of your trust, whether by oversight or because they were acquired after the trust was created. Without a pour-over will, any assets outside the trust at the time of death would have to go through the regular probate process and be distributed according to intestacy laws or another will. A pour-over will directs those remaining assets into your trust, ensuring that all assets follow your instructions.
2. How It Works with a Trust
A pour-over will complements a living trust. When you set up a trust, you transfer ownership of certain assets—like real estate, bank accounts, or investments—into the trust’s name. However, not all assets may make it into the trust for various reasons, such as being acquired after the trust was established or simply being forgotten. The pour-over will "pours" those assets into the trust, where they can be distributed according to the terms you’ve outlined in the trust, even if they weren’t formally included before your death.
3. Probate and a Pour-Over Will
While one of the main benefits of a living trust is to avoid probate, assets that are transferred to the trust through a pour-over will must still go through probate. This is because, at the time of death, those assets are still technically owned by you, not the trust. However, once the probate process is complete, the assets will be moved into the trust and distributed according to its terms. To avoid probate entirely, it's best to ensure all major assets are properly funded into your trust while you're alive.
4. Benefits of a Pour-Over Will
A pour-over will provides several key benefits. It consolidates your assets, ensuring that anything you forgot or acquired later still becomes part of your trust and is distributed according to your wishes. While assets transferred through a pour-over will must go through probate, they are eventually handled privately within the trust. This helps maintain privacy and ensures all assets are managed consistently under your trust's terms, even if they weren't initially included during your lifetime.
Conclusion
A pour-over will is a useful safety net in estate planning, working hand-in-hand with a living trust to ensure all your assets are distributed according to your wishes. While assets transferred through the pour-over will may need to go through probate, it ensures that nothing is left out of your trust unintentionally. To get the most out of a pour-over will, it's important to regularly update your estate plan and make sure your trust is properly funded during your lifetime.
