The Pour-Over Will: A Safeguard

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What is a Pour-Over Will?

A pour-over will is just a more specific name used for the kind of ‘last will and testament’ which intends to transfer some or all of a person’s property to a previously created revocable living trust after death. Pour-over wills are excellent safeguards to ensure that a person’s assets eventually get transferred into an existing trust, thereby avoiding the need for probate.

A Useful Safeguard

A pour-over will is a legal document used in conjunction with a living trust to ensure that assets which should have been placed in the trust still get “poured into” the living trust after death.

Keep in mind that a living trust only has authority over those specific assets placed within the trust (e.g. within the trust estate). But sometimes a person may forget or just simply fail to transfer an asset into their trust before they die, essentially relegating that asset to be an asset outside of the trust (also known as the probate estate). As you might guess, those assets within the probate estate (e.g. outside of the trust) must be probated, while those within the trust estate can avoid the headaches of probate and continue to be administered by the trustee in accordance with the terms of the trust. Because of this, a good estate plan should also have a way to deal with assets which were never placed into the trust prior to death (whether on purpose or by accident).

Safeguard in Estate Planning

Without proper planning, getting an asset which should have been placed into your trust prior to death actually transferred to your trust after your death can be very difficult. In some cases, it can be downright impossible unless you happened to create a pour-over will as part of your estate plan.

The Best Pour-Over Will is the One that Never Has to be Relied Upon

The hope is that the pour-over will never have to be relied upon, after all even a pour-over will must be probated. Since one of the biggest aims in estate planning is to avoid probate altogether, the best pour-over will is one that never has to be used. In other words, the hope is that all assets which should be in the trust are actually in the trust at the time of death such that there are no assets remaining to be ‘poured into’ the living trust.

So although it is generally a good idea to have a pour-over will in your estate planning toolbox, the hope (and goal) is that all assets which need to be in the trust are properly placed in the trust prior to death. This way, probate can be avoided and the pour-over will can be disregarded altogether.

For this reason, the best kind of planning considers not just on the creation of a pour-over will in conjunction with a living trust, but also ensures that the trust is funded with all of the assets which are supposed to be placed within it.

(IMPORTANT NOTE: Not all assets should be placed into a living trust- but that is a topic for another day…)

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