As you read about the estate planning process, you may come across the term pour-over will—but what does this term mean, exactly? Essentially, it’s a safety device. It’s a last will and testament that captures any assets not included in a living trust.
To understand the implications of this, you first need to understand how living trusts work. Specifically, note that as you create a living trust, you have to fund it—which means ensuring that personal assets are transferred into the trust document either through the trust document itself or through the retitling of assets in the trust’s name.
This is an easy process in many respects, yet in some cases these assets don’t make it into the trust—and for any number of reasons. That’s why it can be helpful to have a pour-over will.
While pour-over wills aren’t necessary for all estates, it’s something we’d generally recommend considering—and for the simple reason that any assets not transferred to your trust will become part of your estate. In other words, when you die, these assets will be treated as if you died intestate—that is, without a will. The existence of a trust won’t change this, because these assets are not considered to be part of it.
This basically opens up a number of difficulties for your heirs—including the likelihood of probate court, and the possibility of certain assets passing, by law, to people other than those you intended.
A pour-over will is something that many estate plans neglect, but can be a good precaution, and a smart way to further care for your loved ones. We recommend speaking with an estate planning attorney about the usefulness of pour-over wills. Reach out to Singh Law Firm today to begin that conversation.