Setting up a living trust can be a great way to ensure that your assets easily reach your intended beneficiaries after you pass on. However, trusts are not foolproof arrangements—without expert guidance and regular maintenance, some of your assets can still slip through the cracks. Pour-Over Wills can help ensure that all of your assets are distributed the way you intend. This very important document is a must in your estate planning toolbox.
What are Pour-Over Wills?
A Pour-Over Will is a type of Will that’s created in conjunction with a living trust. With a living trust, the grantor transfers the ownership of specific assets into the trust and dictates how those assets will be distributed to their intended beneficiaries upon the grantor’s death. A Pour-Over Will stipulates that any assets not owned by the trust that are subject to probate at the time of the grantor’s death should still pass over to the trust. These assets often include smaller possessions which may have been overlooked when the trust was first drawn up, assets that the grantor might have initially chosen not to include, and assets acquired after the trust was established.
Why You Need a Pour-Over Will
The main advantage of a Pour-Over Will is that it creates a safety net. Here at Empowered Legacy Planning, we like to call it a “sweater in our suitcase”—we hope we don’t need it, but we throw it in anyway! It’s very difficult for most people to account for all their assets when a trust is initially drafted. The pour-over will ensures that any missed or omitted assets ultimately find their way into the trust. You can rest easy knowing that all of your assets will go to your intended beneficiaries.
A Sad (But True) Story About the Value of Pour-Over Wills
Years ago, we were contacted by a woman who was the sole beneficiary of a trust set up by her friend. The trust had been drafted online and included a schedule of assets that were intended to fund the trust. These assets included two pieces of property, a bank account, and more.
However, when we went to gather these assets and pull deeds, etc., we realized that the assets had never actually been transferred into the trust. They were all still in the decedent’s name.
If the decedent had a Pour-Over Will in place, these assets would have been caught in the safety net, transferred into the trust, and distributed to her friend per her wishes. The two friends had long talked about opening a safe home for troubled teenagers, and this inheritance would have been used to set that plan in motion.
However, there was no Pour-Over Will in place. While we could have tried to fight for these assets, the court proceedings would have been incredibly time-consuming and wildly expensive. The beneficiary decided not to engage in a lengthy court battle, and the decedent’s assets ultimately passed according to state intestacy laws…to her long-estranged siblings!
Drawing up a Pour-Over Will
However effective a Pour-Over Will may be, nothing will be as effective as working alongside an estate planning attorney who can help oversee and maintain your trust on an ongoing basis. At Empowered Legacy Planning, we offer a unique trust maintenance program to ensure your trust is fully funded and kept up-to-date to ensure your wishes are carried out the way you intended. Contact us using the brief form below to learn more about this program, or to discuss any other estate planning or administration needs you may have.