When to Use a Pour-Over Will With a Revocable Trust

Estate planning can sometimes feel daunting, especially when it comes to ensuring that your assets go to the right people without hassle. The pour-over will, especially when paired with a revocable trust, can provide peace of mind.

What Is a Pour-Over Will?

A pour-over will is like a safety net for assets that aren't already placed in a trust.  This type of will allows any remaining assets you hadn't transferred to your trust during your lifetime to "pour over" into the trust when you pass away. This ensures that everything is gathered into one place—the trust you created—so it can be distributed according to your wishes.

Even though pour-over will still need to go through probate, they streamline the process by consolidating everything into your trust, making it easier for the appointed trustee to handle everything in one place. According to Investopedia, pour-over wills cover any assets left outside the trust at death.

How Will a Pour-Over Work with a Revocable Trust?

A revocable or living trust is a legal arrangement you create while alive. It allows you to transfer your assets into the trust's ownership, and you can continue to control these assets, making adjustments or even dissolving the trust if you choose. This type of trust is often used to help avoid the probate process for assets placed within it.

When you set up a pour-over will alongside a revocable trust, the will is a backup for any assets that might not make it into the trust before you pass away. Let's say, for instance, you acquire a new property but forget to transfer it to your trust. A pour-over will ensure that property eventually lands in your trust, keeping your wishes intact.

Why Do Pour-Over Wills Still Go through Probate?

While the assets already placed in a revocable trust bypass probate, any assets that transfer via a pour-over will still go through this legal process. However, since the pour-over will usually contain fewer assets or smaller items, the probate process can be more straightforward and less expensive than it might be for a standard will covering all your assets. Probate rules vary by state, but having a pour-over will simplify things since it consolidates your assets into your trust, making it easier to administer your estate.

When Should You Consider Using a Pour-Over Will With a Revocable Trust?

Not everyone needs a pour-over will. However, it's a valuable tool in certain circumstances. Here are some situations where this combination might make sense:

• You Have a Complex or Changing Asset Portfolio: If you often acquire new assets , it can be easy to overlook transferring something to your trust. A pour-over will capture anything not moved to the trust, ensuring that nothing gets left behind in the probate process.
• You Want Flexibility and Control During Your Lifetime: A revocable trust allows you to control your assets and adjust as your needs change. Pairing this with a pour-over will ensure that any missed items are still distributed according to your intentions.
• You're Concerned About Privacy for Your Beneficiaries: Probate records are typically public, so any details in a standard will might be open to view. However, funneling your assets into a trust through a pour-over will add privacy.

What are the Benefits of Using a Pour-Over Will With a Revocable Trust?

A pour-over will pair with a revocable trust can offer several benefits:

• Simplicity: Consolidating everything into a single trust makes it easier for your beneficiaries and trustee to manage your estate.
• Reduced Legal Complications: This setup can help avoid disputes over assets, since everything is eventually directed to the trust where your wishes are clear.
• Peace of Mind: Knowing that your assets will end up in the right hands, even if you forget to transfer something to your trust, can provide significant reassurance.

Is There a Downside to Using a Pour-Over Will?

While a pour-over will adds security, be aware of a few drawbacks. Assets undergoing a pour-over must still undergo probate, meaning they aren't entirely shielded from court proceedings. However, this may be a minor inconvenience if the peace of mind it provides outweighs the potential cost of probate.

A pour-over will also slow down the distribution of assets since probate can take time. This is worth considering for families or beneficiaries needing a quicker transition.

How Do I Set Up a Pour-Over Will with a Revocable Trust?

Setting up a pour-over will and revocable trust usually involves some paperwork and the help of an estate planning attorney. An attorney can guide you through drafting both documents, ensuring that your assets are accounted for and that any remaining assets will flow smoothly into your trust upon your passing.

Key Takeaways:

• Secured Missed Assets: A pour-over will ensure that any assets not already in your trust flow into it after your passing, providing a safety net.
• Simplifies Estate Management: Combining a pour-over will with a revocable trust consolidates all assets into one place, simplifying management.
• Offers Privacy Benefits: Assets funneled through a pour-over will into a trust often avoid public disclosure, protecting beneficiary privacy.
• Streamlines Probate Process: With fewer assets outside the trust, the probate process is quicker and less costly than a traditional will.
• Provides Flexibility: You can adjust a revocable trust during your lifetime, and the pour-over will cover assets you may acquire later.

Ensuring your assets are properly managed and distributed according to your wishes is key to estate planning. At The Werner Law Firm, our experienced estate planning attorneys can help you set up a comprehensive plan, including a pour-over will and revocable trust, to provide peace of mind and simplify estate management.

If you have any questions, schedule a free appointment with us through our online appointment page.

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Reference: Investopedia (April 1, 2024) “Pour-Over Will Definition and How It Works With a Trust”