When you're completing your estate planning, you'll encounter an assortment of legal document alternatives that can help ensure that your assets and belongings go to your intended beneficiaries. One estate planning document is known as a "pour-over will." Keep reading to learn everything you need to know about pour-over wills and how you might use one in conjunction with a trust.
An Explanation of the Pour-Over Will
A pour-over will is a will that transfers any assets that you have upon your death into your legal trust. Unlike a more conventional will, the only purpose of a pour-over will is to place assets into your trust; it does not distribute property to your heirs. Your property will be distributed based on the terms of your trust.
When You Should Use a Pour-Over Will
A pour-over will act as a catch-all document that ensures that anything that you have of value is placed inside your trust. Ideally, you should place all of your assets into the trust before your death. However, oversights may happen. If you neglected to put something in your trust, a pour-over will ensures that the account or asset goes into the trust upon your death.
How to Use a Pour-Over Will and Trust in Your Estate Planning
When doing your estate planning, you should consider incorporating a living revocable trust into your final plans. A living revocable trust is a legal instrument that allows you to distribute property according to specific instructions. It's possible to make your trust the owner of certain assets, or you can name the trust as the beneficiary. Your pour-over will then takes care of anything you neglect to put in the trust.
You retain ownership over the assets in the trust while you're alive, and you're free to make changes to the trust as needed to make sure that your assets are dispersed according to your wishes after your death. For example, assume that you want to avoid leaving your adult children a lump sum of money after your death. You might specify that your children can receive a specific amount for college expenses and a certain amount for a down payment on a home. However, they will not receive the remainder until they reach an older age. A trust ensures that your beneficiaries receive their inheritance on your terms.
You will appoint a trustee to handle your trust after your death. The trustee is responsible for making sure that your guidelines for the trust are followed. You can name a trusted friend or family member to act as the trustee, or you might outsource the task to an attorney or trust management company. It's also a smart decision to name a secondary trustee in the event that your initial trustee dies or becomes incapacitated.
If you need help using a pour-over will, contact an estate planning attorney like Ally M. Glaser P.A.
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