You may wonder why you would need a pour-over will if you already have a living trust. A pour-over will is necessary if you fail to fully or properly fund your living trust. Think of a pour-over will as an “insurance policy” for your assets.
A pour-over will is a testamentary document, which ensures that a person’s “leftover” assets will automatically transfer to a trust upon their death. When you establish a trust, you may wish to fund it right away—or fund it after you die. A pour-over will, in conjunction with the trust, tells the estate administrator to transfer some or all assets titled in your name to the trust.
Why would I use a pour-over will?
Pour-over wills can dictate distribution of assets—both to a living trust and to specific beneficiaries. If you’re on top of estate planning throughout your life, you may not have any unaccounted-for assets to “pour over” into a trust.
However, if you are not able to update your estate plan each time you acquire or sell a new asset, your trust document and will may not account for every asset in your estate. You may have assets to transfer into a trust, but never get the chance to do so. In that case, a pour-over will can account for leftover assets. It transfers assets to your living trust, which in turn, is distributed to your beneficiaries through the trust.
This is also useful when you own or receive assets you may not have been aware of, such as an inheritance from a distant relative or an old retirement fund. The pour-over provision acts as a catch-all provision to fund a trust.
A pour-over will can also make specific bequests to beneficiaries. Those assets may go through probate, but assets left to the trust will not. In other words, you can continue to transfer all of your assets as you see fit.
Your estate planning attorney at Dworken & Bernstein will guide you to make a provision leaving everything not specifically named, to the trust and avoid potential issues with your trust. If you’re interested in creating trust, a will, or any other estate planning documents, and consulting with knowledgeable attorneys, the highly experienced legal team at Dworken & Bernstein can help. Call us today to schedule a consultation!