Most people are familiar with a basic Last Will and Testament but very few people know what a Pour-Over Will is. Essentially, a Pour-Over Will is used in conjunction with a Trust and it directs that any assets you own in your own name outside of the trust at the time of your death will be left to your trust and distributed according to trust guidelines.
Here’s an example of how this works: Say that at the time of your death you owned a piece of newly acquired property that you had not yet titled in the name of the trust you created with your lawyer. Since this property had not yet been “funded” to your trust, the asset would fall outside of your trust (called “non-trust assets”) and would not receive the protection that you had hoped for when you created your estate plan in the first place. However, if you had a “Pour-Over Will,” the asset would still wind up in your trust. In this regard, the Pour-Over Will acts as a safety net to make sure that all of your solely-owned assets will be distributed according to the terms of the trust after you pass away, and without having to deal with a full probate proceeding. We often tell our clients that, unlike a Last Will and Testament, a Pour-Over Will does not need to state how the estate assets will be distributed. Instead, it merely has to state that the assets should go into the trust. This is an important aspect of estate planning for anyone who is concerned about privacy and does not want their personal affairs made public through the probate court. However, just like a Last Will and Testament, the Pour-Over Will is subject to probate proceedings in general. The length and complexity of the proceedings depends on the amount of assets that were held outside of the Revocable or Irrevocable Trust, as well as if the estate plan was properly written to identify and capture your intention regarding assets you wished to be in your trust but were mistakenly left out. In addition, the administration of your trust will have to continue to exist for however long the estate is in probate, so Trustees should understand that their fiduciary responsibilities may extend for longer than they may have anticipated if any property is held outside the trust and must go through probate before being transferred to the trust. If you have any questions about the difference between a Last Will and Testament and a Pour-Over Will, or if you’d like to review your existing estate plan to make sure your assets will be distributed according to your wishes after you pass away, please contact our office at (949) 333-3702 to set up a Strategy Meeting.
