A pour-over will is a legally binding document that is used in conjunction with a living trust. You may utilize it to transfer assets into your trust that are not already in your trust before you die.
You should consider having a pour-over will if you have a living trust and want it to be your principal vehicle for distributing your assets after you die. Consider it a “safety net” that catches any assets you did not transfer to your trust while you were alive.
What if you do not have a living trust? Examine the many kinds of wills to determine which one is best for you.
If I have a living trust, why do I need a will?
A living trust is essentially a legal agreement that allows you to determine how your possessions are distributed after you pass away. A living trust “owns” the assets you transfer to it, but you may still use and control them while you are still alive. Some individuals set up a trust to avoid going through the probate procedure, which can be costly and time-consuming.
Because you will most likely continue to acquire more property over your life, this will need ongoing upkeep. People often forget or may not have time to put new property into their trust before they die away. If you do not transfer property into your trust before you die, your pour-over will “catch” it and notify the court that you want it transferred.
Assets not in your trust are normally regarded as though you died “intestate,” or without a will, if you do not have a pour-over will (or a regular will). Those assets will be allocated in accordance with local intestacy rules, which may vary significantly from your preferences.
What is a pour-over, and how does it work?
Only assets that are not in your living trust will be distributed via your pour-over. You should not mention the property in your will that you have previously transferred to your trust to prevent any misunderstanding.
You will specify a residual beneficiary in your pour-over will. This is the individual who inherits your residual estate, which consists of any assets that were not transferred to the trust before you die. You may designate your trustee as your residual beneficiary if you want your residual estate to go to your trust.
After you die, your trustee will maintain your trust and transfer its assets according to the conditions of your trust agreement. You should not just utilize your trustee’s name to identify your residual beneficiary in your pour-over will. If you do, that individual will be the only beneficiary of your remaining estate. Instead, you should designate the “trustee” of the trust, being sure to precisely characterize the trust.
You will also choose a will executor, someone you trust to carry out your last intentions. If you specify that your remaining estate is transferred to your trust, your executor is in charge of carrying out this request. Consider it like a baton: your will executor transfers property to your trust, and your trustee manages those assets.
Will-makers often name their trustee as the executor of their will. Because there is just one point of contact for your trust and estate, the legal procedure may be streamlined. Some individuals, on the other hand, prefer designating two distinct persons since it creates checks and balances and prevents a single person from having entire authority. If you are going to name two persons, be sure you trust them both and that they get along. After all, they will be managing your trust and estate together.
A pour-over will, as a standard will, may be used to solve various estate-planning difficulties. One key example is that you may name guardians for any young children you may have in your pour-over will.
Is it true that assets in a pour-over will be exempt from probate?
No, whatever you do not transfer to your living trust must be probated in a court of law. Assets kept in a trust may be dispersed to beneficiaries without having to go through the probate procedure, which saves time and money. That is why it is critical to keep your trust in good standing and to swiftly transfer any additional assets into it throughout your lifetime.
Is a pour-over the best option for me?
A pour-over will is a strong document that may “capture” any property you did not transfer to your trust before you died if you had a live trust. However, property in your pour-over will still have to go through probate, so it is critical to maintaining your trust up to date.
Now that you’ve learned about the importance of Pour-Over Will in creating a Digital Estate Plan, check out Clocr to get started on creating your own Digital Estate Plan!
