Living Trusts help you to avoid probate, conservatorship, etc. but are quite difficult to fund as every new property you own must be transferred to a Living Trust. You might forget to move a few assets to your trust while you are alive. This is where a pour-over Will comes into play.
Pour-over Wills works as a safety device to automatically transfer any leftover property into your Living Trust after your death that you might have missed adding your trust.
What is a Living Trust?
A “Living trust”, or simply “Trust” is a legal document just like a Last Will and Testament which helps a person to transfer his property into a trust. The benefit from the trust property can be enjoyed by the person who created it (Grantor/Initial Trustee) till he dies.
After the death of the Grantor, the trust property is transferred to the beneficiaries by the representative of the Grantor (Successor Trustee).
What is a Pour-over Will?
Pour- Over Wills are those which automatically transfer your leftover assets into the previously set up Living Trust which were not included earlier. Basically, these Wills work alongside the Living Trust as a backup.
If you have not included some of your property before death in the living trust or if you bought a new one and you already have a living trust, these Wills will transfer them into the living trust on their own.
Please Note- Pour Over Wills makes your Estate plan easier as it is governed by a single document, i.e. the trust.
How to create a Pour-over Will?
Creating a pour-over will is quite simple. All you need to do is:
1. Create a Living Trust.
Since pour-over Wills work alongside a Living Trust, you will first need to set up a Living Trust. If you have a simple and small estate, you can create a Living Trust online. In case your estate is large and complex, you should consult an experienced Estate Planning Attorney for creating your Trust.
2. Name your trustee as the beneficiary of your Pour-over Will
Name a Residual beneficiary for your Pour-over Will who will receive the assets that were not transferred to your Living Trust. If you want your trust to receive these leftover assets; name the trustee of your trust as the residual beneficiary.
3. Name an Executor for your Will
It is also important to name a person as the executor of your Will who will carry out the wishes specified in your Will. Most of the time, people name the residual beneficiary as the executor of their Will to streamline the legal process. But you may also choose two different people for this purpose.
4. Complete your other estate planning needs using Pour-over Will
Apart from transferring leftover assets to your living trust, pour-over Wills can also help address other estate-planning issues, just like a traditional will. These are :
- Naming a guardian for your minor children.
- Naming a guardian for your pets.
- Pass on motor vehicles like Cars or motorcycles( you cannot do this using a Living Trust).
Do assets in a pour-over Will avoid probate?
No. A pour-over Will does not avoid probate.
One of the main benefits of a living trust is that its assets don’t have to go through probate. But in the case of a Pour-over Will, it has to go through Probate and may cause a delay in the distribution of property via a Living Will which usually takes a few weeks.
Probate is a judicial procedure whereby the court determines the inheritors of the assets of a deceased person. Read this article to know more about probate.
That is why it is essential to promptly transfer any new property into your Living Trust during your lifetime.
Do I Need A Pour-Over Will?
If you have a Living Trust, you might need a pour-over Will. You will not have to worry if any property is left to be transferred to your trust. Pour-over Will automatically transfer any leftover property into the Trust.
In the absence of a Pour-over Will, the property that is left to be transferred to a Living Trust will be distributed as per the state's intestacy laws and may be transferred to those heirs to whom you never intended to pass on your assets.
If you are confused about making a Pour-over Will, you may consider other types of Will also.