A Pour-Over Will is a type of Will that directs your assets to a trust that is separate from the Will. The reason for “pouring” assets from the Will over to a trust is so that the trust will direct what happens with your assets. Having your trust control the assets provides for potential tax minimization planning as well as greater control and flexibility in how your beneficiaries receive your assets.
A Will, whether it is a Pour-Over Will or a regular Will, only deals with assets that are in your name alone. It directs the probate court on where you want your assets to go. Did you pick up on the probate court reference? Let me say this differently. Any assets in your name alone (without a co-owner, beneficiary designation, or through operation of law) upon your passing will need to go through the court system – Your Will (whether a regular Will or a Pour-Over Will) just lets the court know what you want to see happen with those assets. Bottom line – if you have assets in your name alone, upon your passing, your beneficiaries will need to go to probate court to get the assets. Is this what you want?
If you want to avoid having court involvement for your assets, make sure your assets are titled appropriately. If you have a Pour-Over Will and it pours your assets into a revocable trust that you have set up and you want your assets to go to this trust, make sure any and all assets that you can are actually titled to the revocable trust during your life or have the beneficiary as the revocable trust. This way, your beneficiaries won’t need to go through the court system prior to your assets going to your revocable trust. Having your assets actually aligned with the revocable trust during your life makes your beneficiaries’ lives so much easier since they don’t have to deal with the delays and expense of going through probate court before having access to your assets.
You may wonder though – “Why do I need a Pour-Over Will if I have a trust?” The Pour-Over Will is vitally important if you have minor children, since this is where you nominate someone to take care of minor children (a.k.a. a guardian) if you should pass away. The Pour-Over Will is also important because it can serve as a catch if an asset does happen to go through probate court. Although that asset would need to go through the probate court system, at least it will end up in your trust once the probate court is done with it.
Finally, look at your Pour-Over Will – if your Pour-Over Will pours assets into your revocable trust but also provides for distributions of other assets (e.g. $10,000 to Janie) ask your attorney why the Pour-Over Will is set up this way. If the goal is to avoid having to go through the probate court system upon your passing (and therefore reduce the delay, hassle and expense involved with the court system), shouldn’t the $10,000 to Janie be provided for in your revocable trust and not the Pour-Over Will? I think you can now gather that my answer to this would be a resounding ‘Yes’!
Look at your documents and ask questions – Make sure you understand how your estate planning documents work and what the purpose is of each of the documents.
