I was told that a trust isn’t enough. I was told that I also needed a “pour-over will.” What is this? Why do I need it?
Sal. G.
Whoever you were speaking with is correct. A trust is not enough by itself. You also need a pour-over will to support your trust. This is where focusing on estate planning as a complete package is best because it avoids cracks where property can fall through. A pour-over will is designed to deal with one such crack.
Even the best trust can only reflect your assets as they are on the day the trust was created. If you’re like most people, you will take your trust, put it in your file cabinet, and not think about it. You will continue to live your life. This will mean buying and selling assets, such as a new home or car. It may mean moving your money around to achieve different financial goals.
After a few years or decades, it is common for your estate to look very different. But your trust will only be able to control assets that were properly placed into the trust.
If a major asset, such as your new home or a bank account, is not in the trust, it will be probated. If there is no will, then those assets will be distributed through a process known as intestacy. Basically, the courts and laws will determine who gets the property instead of you.
A pour-over will acts like a safety net against such a problem. It takes any property not in the trust at the time of death and places it into the trust. So that new home you purchased but never got around to putting into the trust will end up in the trust and being distributed accordingly.
A pour-over will still needs to go through the probate process. So it is always best to periodically review your assets and make sure everything you want in the trust is properly placed in the trust. Ideally, a pour-over will would never be needed or used. But in the real world, pour-over wills provide security that your trust and larger estate plan will be able to protect your family and assets when you really need it the most.
If you have a question of your own that you’d like to ask Mike, please use the contact page with the subject line “Ask Mike.”
Disclaimer: As with anything on the internet, this question and answer is general information and not directed at anyone in particular, not even the original questioner. Every answer presumes there are no other issues or facts that would make a difference. It is advised that you use this information as part of an enhanced discussion with an attorney capable of providing personalized advice in your jurisdiction. Again, I remind the reader that this website, including this post, is subject to a disclaimer that can be found at the bottom of the page.