A pour-over will is a type of will created in conjunction with a trust. It can help facilitate the transfer of assets if a trust’s grantor (the person establishing the trust) has failed to transfer all intended assets into the trust. A pour-over will be an essential part of a person’s estate planning checklist. Bankrate’s recent article entitled “Do you need a pour-over will in your estate plan?” gives us more information.
This type of will has a provision that directs the will to “pour over” any residual assets left in the person’s estate into a living trust overseen by a trustee upon the grantor’s death.
A significant benefit of this type of arrangement is that it’s a backstop in case there were assets the grantor didn’t specifically fund into the trust before their death. The pour-over will allows these assets to avoid the intestate rules (when someone passes away without a valid will), even though they were not specifically part of the living trust.
A person might designate certain assets to be titled in the name of a living trust they’ve established to facilitate passing these assets to the trust’s designated beneficiaries upon the grantor’s death. The trust avoids probate on these assets. However, assets such as an IRA or a life insurance policy that passes on to heirs via a beneficiary designation wouldn’t be eligible for inclusion in this type of trust.
A pour-over will allows the grantor to state that any assets they had not previously included in the trust should be added upon their death. Therefore, assets that the grantor may have acquired after the grantor established the trust are eligible for the same treatment as the assets already funded to the trust.
It’s also simple and eliminates the need to decide which heir receives certain assets because everything eventually becomes part of the trust. These assets are, therefore, distributed via the terms of the trust.
It also helps avoid a lengthy probate case due to a significant asset not included in the trust or elsewhere.
However, this type of will doesn’t eliminate the probate process. The will still needs to go through probate. There may also be possible legal challenges, which can be costly to litigate and take time to resolve.
Ask an estate planning attorney about a pour-over will as a part of your estate plan.
Reference: Bankrate (April 20, 2022) “Do you need a pour-over will in your estate plan?”