Do I Need a Pour-Over Will?

 Posted on November 15, 2021 in Estate Planning

Nowadays, trusts, rather than wills, are the predominant way posthumous transfers are made. Trusts offer a number of benefits, but avoiding probate is often at the top of the list. There are pitfalls to living trusts, however. One is that the trust can only control property that it owns, so any assets that have not been transferred to the trust at the time of the grantor’s death may be out of its reach. Pour-over wills can be used as a sort of failsafe on a trust by posthumously transferring the grantor’s remaining assets into the trust. If you are unsure whether your estate plan needs a pour-over will, you should consult with a local attorney.

How Do Pour-Over Wills Work?

Pour-over wills exist to back up a trust. When the grantor of a trust dies, any assets of his that have not made their way into a trust already cannot be governed by the trust. A pour-over will simply exist to gather up and control any assets that were left out of the trust for whatever reason. Using a pour-over will, the testator devises all his remaining non-trust property to the trust.

This can be extraordinarily useful when it is discovered after death that the decedent owned property he had forgotten about, or never became aware of in the first place. It is more common than one might think for assets to be inadvertently omitted from a trust. People may forget about an old bank account or own estate property from a long-dead relative they never found out about. A pour-over will simply offers a bit of extra security in making sure that all the property a grantor wanted to be included in a trust will be included.

What Are the Drawbacks of a Pour-Over Will?

The major drawback of relying on pour-over wills in high-value estate plans is that in some cases, property governed by a pour-over will must pass through probate before reaching the trust. Whether a trust or an individual is the beneficiary of a will, probate may be required. However, unless the value of property to be “poured over” exceeds $150,000, you may still be able to avoid probate.

Generally, pour-over wills are made with the hopes that they will not be needed. Transferring everything by trust is still ideal, as it avoids a few pitfalls associated with wills. However, when they become necessary, a pour-over will can be an excellent addition to a well-rounded estate plan.

Call a California Estate Planning Attorney

At the Law Office of David Schechet, we pride ourselves on creating thorough and complete estate plans that minimize expenses. Our experienced California wills lawyers will take a thorough accounting of your assets to help determine what estate planning instruments are right for you. Call 800-282-4731 to schedule a free consultation.

Source:

https://www.investopedia.com/terms/p/pour-overwill.asp