Most of us have heard about a Last Will and Testament, but have you ever heard of a pour-over Will? Pour-over Wills are used often in connection with living trusts.
There are several different types of living trusts, but ultimately trusts are a vehicle that will avoid probate and often provide other benefits such as asset protection or other things, depending on what type of trust it is. The goal of a trust is to make sure that they assets are “funded into the trust.” In our office we like to say that it is putting your boxes into your wagon.
However, oftentimes assets will be left out of the trust for a myriad of reasons. To be completely honest, the main reason is probably just because people forget to put them in the trust and over time when they buy something new instead of having it put into the wagon they just leave it in their name alone out of forgetfulness.
A pour-over Will essentially says that all assets that are left in a person’s name alone at the time of their death should “pour over” into the trust. The will does still have to be probated because the asset was in the person’s name alone, but ultimately the assets will pour into the trust and then will be subject to the terms of the trust. We used this as a catchall or fallback provision so that we are sure that the trust terms will govern the distribution in the future.
Pour-over Wills are often much shorter than your traditional wills because their purpose is simply to get assets over into a trust, subject to the terms of that trust. Therefore, pour-over Wills are simple and easy to understand because of their purpose.
If you have a trust and your trust provides for all of the distributions to you and your family after you die, talk to your attorney or professional to determine how assets that are left in your name are going to be handled. Assuming that there won’t be any is probably not the best option or course of action. Talk to your professional to determine if a pour-over Will is right for you.
If you would like to have additional information or to discuss this further, please give us a call at 717-845-5490.
