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POUR-OVER WILL

Living trusts are created with the purpose of ensuring that all of a person's assets are passed onto the correct beneficiaries. When creating a living trust, it may be helpful to also create a pour-over will. A pour-over will is a document in which the writer of the will, also known as the testator, creates a trust and declares that the property in the testator's estate will be directly transferred to the trustee of the trust upon death. Having a pour-over will would allow one to automatically transfer property at the time of death. pour-over 

Living Trust

Many people create a living trust to avoid the probate procedure. Probate is the court procedure in which the court will oversee the distribution of assets. In order to fund a living will, assets must be transferred into the trust. Once an asset is put into the trust, the asset will be under the name of the trust instead of the individual. This is important for the purposes of a pour-over will and probate avoidance. The testator is allowed to appoint a trustee, who will receive the assets in the trust automatically after the death of the testator. This automatic transfer of assets will effectively avoid the probate process.

Assets transferred into a trust are owned by the trust, therefore the testator is no longer able to use those assets. Therefore, not all property is put in the living trust. All personal assets that are not in the trust are subject to the terms of a pour over will. Sometimes, assets are not in the trust because the assets were acquired after the trust was executed. If assets were excluded from the trust, or if they were not retitled due to the timing of acquisition, they would not be part of the living trust.

Benefits of a Pour-Over Will

Having a pour over allows one to transfer assets that were previously not in the trust to the trust. If one does not have a will for their assets outside of the will, those assets will be treated as if the person had died intestate. The person's assets would be distributed in two ways. First, the assets in the trust will be distributed to the intended beneficiaries. Next, all other assets that were not accounted for will go through the intestacy process.

Intestate is the condition in which a person dies without a will. As a result, the courts will decide where the person's assets are distributed. Each state has different intestacy laws that determine the hierarch of relatives who the assets will be distributed to. The intestate process is not preferable because because it is time consuming and can be extremely expensive. Furthermore, the deceased will have no control over who will receive their assets.

A pour-over will would act as a safety device to ensure that assets are passed on to intended beneficiaries. In California, a pour-over will only has to go through probate if the value of the assets in the will exceed $150,000.00. If the assets do not exceed $150,000.00 in value, they will be directly transferred to the trust and to the beneficiaries.

Another benefit of a pour-over will is the privacy it offers. Although a pour-over will is probated in court, it simply states that assets that were not put in the trust will be transferred into the trust. Unlike wills, which are probated in court, a trust will not become public record after death. The details of which assets are distributed and who receives the assets will be private.

A pour-over will can also be used to distribute tangible personal property such as furniture, jewelry and clothing. It may also be beneficial if the testator has children under the age of 18 because it allows the testator to name one guardian for their minor children. Knowing the advantages and disadvantages of pour-over will be beneficial to one planning the distribution of their estate.

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