Pour-over wills and living trusts work together to make sure that all assets go to the intended beneficiaries after death. With a pour-over will, all property not specifically given to someone in the will at death is “poured over” into the trust. A pour-over will works to transfer property into a trust which was bought after the trust was created or property that was not put into the trust either intentionally or by mistake. The trust then becomes the beneficiary of the pour-over will.
The pour-over will eliminates the need to make periodic updates to the trust as the property is acquired. Think of a pour-over will as a way to clean up an estate by making sure all property is distributed as designated in the trust. The unique part of a living trust is that it is not a public document and any assets that pass through the pour-over will into the trust remain private. No one knows who the beneficiaries are or what they inherit.
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One thing to consider with pour-over wills is that like most wills, property not transferred to the living trust at the time of death may have to go through probate. This occurs in certain cases and this process can take time, therefore causing a delay in the distribution of the trust. Another option which might be easier is to have a simple will as the property not in the trust would not have to be poured into the trust thereby resulting in a longer delay. However, this only works in certain situations but when it does work, the beneficiaries may receive property quicker from the will as they would not need to wait for the distribution from the trust for this property and the trust would end soon after the death of the creator of the trust.
Wills generally nominate an executor who is designated to settle an estate after death. An executor’s duties in a pour-over will are different from a simple will. In the case of a pour-over will, the executor needs to put all assets passing through the will into the trust. Once the assets are transferred to the trust, the executor hands the job of distributing the trust assets over to the trustee. A trustee can be a family member, friend, lawyer, or other another party selected by the creator of the trust.
When creating a living trust, it is worth considering also creating a pour-over will. However, the disadvantage of having the pour-over will is the chance that the trust will not be able to be distributed until all property passing through the pour-over will goes through probate and is put into the trust. In some cases, a simple will may be worth considering instead. When creating a living trust, it is important to consider individual circumstances to make the best decisions possible for leaving v\aluable assets to others.
At Bratton Law Group, we understand the importance of establishing a proper estate plan. Contact us today for a consultation with an experienced estate planning attorney.