The Use Of A Pour-Over Will
One of the most important things you can do to ensure a peaceful transfer of assets after your passing is to draft a proper estate plan. Unfortunately, it is not uncommon for grantors of a trust to not always make sure that every single one of their assets is included in their trust. Grantors may forget to state all of their assets or they may pass away before they have a chance to do so. Commonly used in combination with a revocable living trust, a pour-over will is a specific will that comes into play when the grantor of the trust has not transferred all of his or her property into the trust before passing way.
How Pour-Over Wills Work
A pour-over will ensures that all property is poured into the trust and then distributed to the beneficiaries. In doing so, it names the trust as the beneficiary of any property that it does not already include and property that does not pass directly to a living beneficiary. This can be used as a sort of back-up plan to make sure that all of your assets are covered. With the combination of having a pour-over will and a trust, all of your assets will be stated in one document, which is the trust. Many estate planners believe that this has many benefits.
Having all of your assets accounted for in one document, the trust, makes it a lot simpler in determining what each beneficiary will receive. It also makes it easier for the executor and trustee to distribute the estate after the grantor’s death. For the individual in question, it is also good to know that trusts are private and they will not become public record once the grantor passes away, which is another useful feature of the pour-over will. This allows more privacy to whomever will be inheriting the property.
As with all legal tools, the benefits of a pour-over will are coupled with certain disadvantages. Typically, people make revocable living trusts to avoid probate, which is the legal process where one’s will is reviewed to determine its authenticity. This is often lengthy and costly, which makes it understandable why skipping the process may seem attractive to many people. A downside to having a pour-over will, like all other wills, is that they must go through probate. Any property that was not included in the trust after the death of the grantor will have to go through the probate process. Thankfully, it is usually the case that not a lot of property passes through pour-over wills, as it is often the leftover assets that were not included in the trust. In some cases, if the property that passes through the will is small enough, it may be eligible for small estate procedures. This process is called summary probate, and is quicker and cheaper than regular probate.
What Happens If You Don’t Have A Pour-Over Will
A lesson that we learn time and time again is that if you want something done right, you have to do it yourself. If a grantor does not transfer all of their assets into their trust, and they do not have a pour-over will before they pass, it will be up to state law to decide where their property goes. That is not the best case scenario, considering the state will follow laws of intestate succession. Under these laws, the property will be passed to heirs by following a state list where the grantors next of kins are stated. Included in the list are spouses, parents, and descendants. This can result in an estranged family member receiving property that does not coincide with the grantor’s wishes.
Setting Up A Pour-Over Will
In an ideal situation, a pour-over will won’t be necessary, however it is still best to have in case you may need it. If you’re looking to set up a pour-over will for estate plan, we highly recommend you seek out a licensed estate planning attorney who can help make sure that all of your assets are properly accounted for.