A pour-over will is a type of will used in conjunction with a revocable living trust to ensure that any assets not explicitly transferred into the trust during the grantor’s lifetime are transferred to the trust upon their death. Here’s a detailed explanation of a pour-over will:
Key Features of a Pour-Over Will:
- Purpose and Function:
- Asset Transfer: The primary purpose of a pour-over will is to “pour over” any remaining assets that were not included in the trust during the grantor’s lifetime into the trust upon their death.
- Completing the Estate Plan: It acts as a safety net to ensure that any assets inadvertently left out of the trust are still ultimately distributed according to the trust’s terms.
- How It Works:
- Creation of the Trust: The grantor creates a revocable living trust and transfers assets into it.
- Drafting of the Pour-Over Will: The pour-over will is drafted to specify that any assets not already in the trust at the time of the grantor’s death should be transferred to the trust.
- Probate Process: The assets not transferred to the trust will go through the probate process, during which the court ensures the will is valid and administers the estate. After probate, these assets are transferred to the trust according to the terms of the pour-over will.
- Advantages:
- Simplifies Estate Planning: By using a pour-over will, the grantor ensures that all assets are eventually handled according to the terms of the trust, even if they are not initially included in the trust.
- Minimizes Estate Distribution Issues: It helps avoid the potential complications of having some assets outside the trust, which might otherwise be distributed according to intestacy laws or a different will.
- Ensures Consistency: It ensures that all assets, including those added later or overlooked, are distributed consistently with the overall estate plan.
- Probate Implications:
- Probate Required: Assets that are not in the trust at the time of death will still need to go through probate. The pour-over will directs that these assets be transferred to the trust once the probate process is complete.
- Streamlined Process: Since the trust already specifies how assets should be distributed, the probate process can be relatively straightforward once the assets are transferred to the trust.
- Drafting and Implementation:
- Professional Assistance: It is advisable to work with an estate planning attorney to draft a pour-over will and ensure that it complements your revocable living trust and overall estate plan.
- Review and Update: Regularly review and update both the pour-over will and the revocable living trust to ensure that they reflect your current wishes and include all relevant assets.
- Legal Considerations:
- Compatibility with Trust: The pour-over will must be compatible with the terms of the revocable living trust and comply with state laws governing wills and trusts.
- Tax Implications: The assets that pour over into the trust will be subject to the same estate and income tax rules as if they had been initially included in the trust.
Summary:
A pour-over will is a will designed to transfer any assets not already included in a revocable living trust into the trust upon the grantor’s death. It acts as a safeguard to ensure that all assets are ultimately distributed according to the terms of the trust, even if they were inadvertently left out during the grantor’s lifetime. While it ensures comprehensive estate planning, assets covered by the pour-over will will still go through probate before being transferred to the trust. Working with an estate planning attorney is essential to ensure that the pour-over will and the trust are properly coordinated and effectively meet your estate planning goals.