Pour-Over Wills: A Safety Net for Your Estate Plan
When it comes to estate planning, you may have heard about pour-over wills. But what exactly are they, and how do they fit into your overall estate strategy? Let's dive in and demystify this important legal tool.
What is a Pour-Over Will?
A pour-over will is a special type of last will and testament designed to work in tandem with a trust. Its primary purpose is to act as a safety net, capturing any assets that you haven't already transferred into your trust before you pass away.
How Does it Work?
Here's the basic idea:
You create a trust during your lifetime and transfer most of your assets into it.
You also create a pour-over will.
If you pass away owning any assets that aren't in the trust, the pour-over will "pours" those remaining assets into your trust after the will goes through the probate court process.
This ensures that all your assets ultimately end up being distributed according to the terms of your trust.
Example: The Forgotten Bank Account
Let's say Sarah has a well-funded living trust that includes her house, investments, and most of her bank accounts. However, she forgot about a small savings account she opened years ago. When Sarah passes away, her pour-over will ensures that the funds in this forgotten account are transferred into her trust and distributed according to her wishes.
Benefits of a Pour-Over Will
Simplicity: It creates a single, unified estate plan.
Flexibility: You don't have to worry about constantly updating your trust as you acquire new assets.
Privacy: Trusts offer more privacy than wills, which become public record.
Peace of mind: It acts as a backup plan for forgotten or recently acquired assets.
Potential Drawbacks
The main downside is that assets passing through a pour-over will still need to go through probate. However, if you've done a good job funding your trust, this should only apply to a small portion of your estate.
How it Affects Your Estate Plan
A pour-over won’t replace your entire estate plan. Instead, it complements your living trust. Here's how it fits in:
Your living trust remains the primary vehicle for distributing most of your assets.
The pour-over will catches any "leftovers" and funnels them into the trust.
This combination provides comprehensive coverage for your entire estate.
Is a Pour-Over Will Right for You?
If you have a living trust, a pour-over will is generally a smart addition to your estate plan. It provides an extra layer of protection to ensure your wishes are carried out.
However, estate planning is highly personal. It's always best to consult with an experienced estate planning attorney to determine the best strategy for your unique situation.
Conclusion
A pour-over will serves as an important safety net in estate planning, working hand-in-hand with your living trust. By understanding how it functions, you can better protect your assets and ensure they're distributed according to your wishes.
Remember, the goal of estate planning is to provide peace of mind for you and your loved ones. A well-crafted plan, which may include a pour-over will, can help achieve that goal.
Ready to take control of your estate planning? Contact our office today to schedule a consultation!
We’ll help you navigate the complexities of creating an effective estate plan that includes all necessary components, including pour-over wills and living trusts. Don’t leave your legacy to chance—reach out now!
About the Author
Leslie has been practicing law since 2009 and is the host of the estate planning podcast 'Legacy Purse'. She has a long history of representing family members struggling to inherit property and/or wealth from deceased family members through the Probate Courts. Knowing how time-consuming and expensive the probate process is, Leslie takes great pride in helping her clients learn how to plan and protect their families during their lives so they can avoid the probate court process and save their loved ones that additional grief (and expense).
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