In creating an estate plan, you are proactively taking steps to ensure that your assets will be distributed according to your wishes after your death. Wills and trusts are common parts of an estate plan, and a pour over will provides backup coverage to an established living trust to ensure your assets are distributed according to your wishes.
What Is a Living Trust?
There are numerous kinds of trusts which are each established to accomplish different goals. If you wish to maintain control over the assets you place in a trust during your lifetime, you may choose to establish a revocable, or “living” trust.
When you create a living trust, you may transfer certain assets into the trust. This might include things like a vacation home, bank account or art collection. With a living trust, you have the flexibility to modify or dissolve the trust at any point in y
our life.
When you put assets in this type of trust, you continue to have access to them. You can select a designated individual, called a trustee, to manage the trust should you pass away or become incompetent or incapacitated, e.g., following an illness, injury, or accident. Then the trustee manages the trust, and the assets in the trust, on your behalf, following the terms you have outlined in the trust document.
Assets in your living trust are distributed to your beneficiaries according to your wishes, typically without having to go through probate. This is often one of the main advantages of a living trust because, depending on your state and the size of yo
ur estate, the probate process can last several months to a year or more.
Avoiding probate also means information about the distribution of your assets to your loved ones is kept private. This could be helpful if you have people in your life from whom you would prefer to shield the details of your estate, such as children from a previous marriage or estranged or combative family members.
How a Pour Over Will Works
What if, after establishing your living trust, you acquire new assets, such as an investment property, a bank account, or valuable furniture or jewelry? Or you forget about a bank account or other asset and never transfer it to your trust? This is where establishing a pour over will can be an important piece of your estate plan.
A pour over will works in concert with a living trust and goes into effect when you pass away, ensuring that any assets you had not transferred to your existing living trust are directed (or “poured over”) to it.
A pour over will acts as a kind of backup and ensures that your assets are ultimately passed on to your beneficiaries as you intended. In addition, information about the distribution of any of your remaining assets, once moved to your living trust, will be kept confidential as part of the trust.
Do Pour Over Wills Mean You Avoid Probate?
Not necessarily. While the property controlled by a pour over will eventually goes to your living trust after your death, that does not mean your family avoids probate. Before your assets are owned by the trust, they may first need to pass through the probate process. The regulations can also vary by state; in some states, for example, if your probate property is valued below a specific threshold, it is possible that it could pass through probate more quickly.
If you want to avoid the probate process, you must take proactive measures with respect to your assets; for example, by ensuring that your living trust contains all the assets you wish to pass on to your beneficiaries.
Seek Expert Legal Advice
Laws governing trusts and estates can vary widely by state and can be complex. Living trusts and pour over wills are also not suitable or necessary for everyone’s situation. Our experienced attorneys offer a depth of expertise in all areas of estate planning. Reach out to schedule an appointment and we’ll recommend the best avenues to ensure your wishes are carried out.