Understanding the purpose of pour-over wills

On Behalf of | Jul 11, 2022 | Estate Planning |

A living trust is a valuable estate planning tool for many Californians. A living trust allows you to maintain control over your assets while you’re alive. Then they’re relatively seamlessly transitioned to your beneficiaries – typically without having to go through probate – after you pass away.

By having a revocable living trust, you can add, remove and otherwise make changes to the assets in it throughout your life. The property is titled in the name of the trust, but you’re the trustee while you’re alive. You name a successor trustee to take over after your death.

When you set up a revocable living trust, that trust is likely going to be the most consequential document in your estate plan – at least in terms of what happens to your property. However, you still need a will. A will that works along with a living trust is known as a “pour-over will.”

Why do you need a pour-over will?

Basically, a pour-over will states that any of your assets not included in your living trust will “pour over” into it for distribution to your beneficiaries. That can help ensure that anything you may have forgotten to include or hadn’t yet gotten around to adding to your trust will become part of it.

Say someone buys a new car. In their excitement, they completely forget to title it in the name of their trust. Before they get around to doing that, they pass away. By having a pour-over will, that vehicle can transfer over to their trust.

What can happen without a pour-over will?

If there are assets not accounted for in your trust, those assets not only can send your estate into probate, they may be treated as if you had died “intestate” – or without a will. That means they could be handed down based on state law – and possibly to someone in your family you have no intention of leaving anything to.

Note that if you have an irrevocable living trust instead of a revocable one, a pour-over will works the same way. Irrevocable living trusts aren’t as common, but they serve specific purposes, like helping avoid taxes.

A pour-over will is a fairly standard part of an estate plan that includes a living trust. However, to make sure it’s set up the way you need it to be, it’s wise to have experienced legal guidance.