What is a pour-over will?

When making an estate plan, you might have decided to create a trust. That means you transferred your property and personal assets meant for your beneficiaries into this separate self-governing entity. You can set rules for the trust not only regarding who receives the assets, but how they can be used.

But what happens if you die before getting the chance to transfer your assets (maybe a newly purchased car, for example) into the trust? You can create a pour-over will to ensure that any remaining assets you left out are transferred into the trust.

You can also use the pour-over will to give away less valuable belongings to your loved ones directly. In estate planning, trusts often work in conjunction with wills, and pour-over wills are no exception. We’ll discuss how pour-over wills work as a safety measure to transfer your assets into a trust.

In this article:

• How does a pour-over will work?
• Do I need a pour-over will if I have a trust?
• Do pour-over wills avoid probate?

How does a pour-over will work?

A pour-over will is a type of will that is primarily created to direct your property into a trust upon your death. Pour-over wills can transfer your assets into a trust that already exists — called a living trust or inter vivos trust — or create one upon your death — a testamentary trust.

In both cases, the pour-over document must state which assets you want to put into the trust, turning them into trust assets. Generally, it might only be necessary to direct high-value property into the trust; lesser valuables can be bequeathed to your beneficiaries through a residuary clause, which you can also include right in the pour-over will.

The benefit of having your assets transfer or pour over into a trust is that they will be governed by the terms set by you (the grantor or trustmaker), and enforced like a contract. For example, perhaps you want to leave a rental property as a gift for your son, but have specific instructions as to how he should use the money. You can create and enforce these terms with a trust.

Upon your death, after the assets have made their way into the trust, your appointed successor trustee will step in to administer the trust assets to your beneficiaries according to your terms laid out in the trust document.

Learn more about how to create a trust and the benefits.

Do I need a pour-over will if I have a trust?

Wills and trusts are not mutually exclusive. In fact, they are a common combination in estate planning.

Even if you already have a revocable living trust, you may still want to create a will. A trust only deals with the distribution of assets, but a will has a few more features. For one, you can use the will to designate a guardian for your minor children, which is especially useful if they are very young. You can also use the will to name an executor, the person responsible for overseeing the probate process. (More on that next.)

As mentioned, a pour-over will is a good safety net to ensure anything left out of your trust, whether intentionally or by accident, gets to your intended heirs. It can be helpful, for example, if you frequently buy and sell real estate property and don’t always have the time to remove or replace trust assets.

You can also give away your lesser valuables with the pour-over will. The will can outline specific items for beneficiaries or give them away as a whole. For example, you can use the will to give your record collection specifically to your niece, or you can use the will to give away the entire “residue” of the estate all at once with a residuary clause.

Learn more about wills vs trusts.

What happens without a will

Without a valid will, pour-over or otherwise, any assets without a beneficiary designation will be distributed based on intestacy law. Each state has different rules dictating who has a claim to your assets when you die without a valid will. In most common circumstances, your property and belongings will be distributed to your next of kin. A personal representative will oversee the process.

If your intended primary beneficiary is an institution or charity, or anyone other than your immediate family, it is especially important to have a pour-over will in place. This can prevent any estranged relatives from receiving the inheritance you set aside for someone else.

More generally, this is why it’s important to have a proper estate plan to begin with. Seek legal advice from an estate planning attorney who knows the probate laws in your area.

Do pour-over wills avoid probate?

Upon your death, your property and belongings must go through probate, or the legal process of proving your will. The executor will be in charge of overseeing the process by going to the probate court and making sure everything gets to the proper beneficiaries.

Avoiding probate is one of the significant benefits of passing along an inheritance through a trust over a will. The trust has its own rules that govern where the assets go, so there’s no need for a court to determine who gets what.

Pour-over wills are subject to probate, since the assets have not yet been transferred into the trust. All assets distributed by a will — whether they are directed to a beneficiary or into a trust — are subject to probate.

Additionally, some states will require your assets to go through the probate process regardless, if your assets and property are over a certain value. You can talk to an estate planning lawyer about the specific laws in your state.

While pour-over wills become part of the public record, there is still a measure of privacy. Public knowledge ends with what assets the deceased person bequeathed into the trust; how the trust distributes assets remains confidential.

Non probate assets

Payable- or transferable-on-death accounts — like your savings account or life insurance policy — allow you to add a beneficiary. If you don’t, the money becomes part of your estate and will be distributed according to the terms of your will, if you have one, or the intestate law we previously mentioned.

Learn more about payable-on-death accounts.