Wikipedia gives this definition of a pour-over will: “A pour-over will is a testamentary device wherein the writer of a will creates a trust, and decrees in the will that the property in his or her estate at the time of his or her death shall be distributed to the Trustee of the trust.”
Huh?
Put simply, a pour-over will is a type of will you need to create if you have a living trust. With a living trust, your assets are held by a trust, rather than by you, although as the named trustee you have complete control. Living trusts were all the rage some years back, and they’re still useful in some cases.
People often think that if they have a living trust they don’t need a will. But that is a big mistake you don’t want to make.
The problem with a living trust is that every single asset in your name has to be transferred into the trust when you create it. And every asset you acquire after you create the trust needs to be held in the trust’s name. But in the real world, things are often missed.
People forget to transfer every asset, so when they pass away, these assets don’t simply pass to the successor trustee the way they’re supposed to. That’s where the pour-over will comes in.
The will provides direction to “pour over” (hence the name) into your trust any probable asset that is in your name, outside of the trust, at the time of death. This is important because, without this will, those assets will pass to your heirs according to state law—so your long-estranged husband or child might get an asset you’d prefer goes to someone else.
Unfortunately, because it’s a will, if you do have these assets in your name, your estate will have to be probated—one of the main things people who create a living trust think they’re avoiding.
So it’s not only important to create a pour-over will, it’s important to sit down with your documents once each year and be sure you haven’t acquired any property or other assets that are not in the trust. If there are, move them now.
If you would like more information about estate planning in South Florida, contact the Law Office of Gary Landau for a FREE legal consultation at 954-979-6566 or by email. Attorney Gary Landau personally returns all calls and emails to him.