A pour-over will is a very simple document instructing that any assets you personally own at the time of your death should be transferred to a living trust you have previously created.
By Christy Bieber, J.D. (Curated by Harwell & Plant)
Key Points
Why Do You Need a Pour-Over Will?
How Do You Create a Pour-Over Will?
What Happens if You Don't Use This Estate Planning Tool?
Pros and Cons
Getting Legal Help From an Estate Planning Attorney
A living trust, or a revocable trust, is often used as part of an estate plan. During your lifetime, you can create the trust and transfer ownership of assets to it. You can be the trustee while you’re alive and of sound mind and can name a backup trustee who will take over management of trust assets when you become incapacitated or pass away. Your living trust also includes the names of your beneficiaries.
Upon your death, assets held in the living trust can transfer using the trust administration process. Assets held outside of the trust, on the other hand, would need to be addressed in some other way.
If you did not provide instructions for what happens to those assets, your state’s intestacy laws would apply. These laws would distribute the assets to family members based on their relationship to you—but the distribution may not be the one you would have preferred.
You can use a pour-over trust to instruct that any assets which weren’t in the trust at the time of your death will move into it after your death. This will ensure that those assets can be transferred through the trust administration process as well.
Why Do You Need a Pour-Over Will?
When you create a living trust, you must fund it by re-titling assets so the trust becomes the official owner. But it is very possible that you will not do this with everything you own.
For example, you may have assets that would be inconvenient or impractical to transfer into the trust. Or you may acquire assets after you create the trust and pass away before you have a chance to transfer them or may simply forget to change the title of some assets.
Since you are creating a trust specifically to facilitate the effective management and transfer of property through the trust administration process, it typically makes sense to have all of your property moved into that trust upon your death.
How Do You Create a Pour-Over Will?
The first step is to create a living trust since you will need something for assets to pour into. You can work with an attorney to help you to complete the trust creation process.
Next, you will draft your will and provide instructions for all assets not otherwise accounted for to pass into the trust upon your death. Just like any other last will and testament, a pour-over will must be signed by the number of witnesses required by your state’s laws (usually, you will need two witnesses).
Working with an attorney to draft this document can also be beneficial to ensure you meet all requirements to create a valid will so your instructions are followed upon your death.
What Happens if You Don't Use This Estate Planning Tool?
If you don’t address what happens to assets held outside of your living trust after you pass away, the court will need to determine what happens to them. States have intestacy laws which specify which family members should inherit.
The specifics of which heirs receive money and property under intestacy laws will depend on which living relations you have. For example, if you are married and have children from outside that marriage, generally a portion of the assets in your estate will pass to your spouse and a portion to your children.
Intestacy laws may not result in your preferred distribution of assets. Further, assets will have to transfer through the probate process, which means the transfer will become public record and the process can take several months, if not longer.
Pros and Cons
There are both pros and cons to using a pour-over will. Here are some of the advantages:
You can facilitate the private transfer of assets during the trust administration process.
You can simplify the process of transferring your assets by ensuring everything is transferred through the trust administration process.
And here are some of the biggest disadvantages:
Your pour-over will may still need to go through the probate process before the assets can be transferred into the trust, but this will depend on the assets left behind in your personal estate and your state’s laws.
The living trust will need to remain active until all of the assets from the personal estate are transferred to it and distributed.
In most situations, those with living trusts who want all of their assets to pass through the trust administration process will find the pros outweigh the cons.
Getting Legal Help From an Estate Planning Attorney like Harwell & Plant
As an estate planning attorney we can provide you with help understanding your options for transferring assets and providing for loved ones. We can help you to determine if a trust and a pour-over will are right for you or whether other estate planning tools are a better fit.
At Harwell & Plant, we can help guide you through these and other legal issues as well as offer Long-Term Care solutions. Reach out for a risk-free consultation.
Paul B. Plant, Esq., Harwell & Plant
PO Box 399, Lawrenceburg, TN, 38464
Call: 931-762-7528 | Text: 931-340-9987
Open: Monday – Thursday 9AM – 5PM | Friday 9AM – 3PM