Just because you have a Revocable Living Trust does not mean that you don’t have to have a Will. Although a Pour-over Will is not used to transfer your property in the way that a will usually does after death, the Pour-over Will has several important functions. Primarily, it acts in the manner of a power of attorney, giving your personal representative the right to act on your behalf to carry out your wishes upon your demise. A Pour-over Will is usually created along with a living trust and designed to transfer property not deeded to the trust during the trustee’s (the person who created the trust) lifetime to the trust at the time of the trustee’s death.
Additionally a Pour-over Will can do the following:
- Name whether you wish to be buried or cremated.
- Name who you wish to become Guardians of your children and/or pets.
- Repeat your intent regarding the beneficiary(ies) of the proceeds of your life insurance.
- Give your executor or executrix powers to carry out specific actions after your death.
- Name the executor responsible for “pouring” the assets left out of the living trust into it.
The testator’s property (left out of the living trust) is subject to probate until such time as the pour-over clause is applied, and the estate assets “poured” into the Trust. For that to happen, though, the trust instrument must be either in existence at the time the will with the pour-over clause is executed, or executed concurrently with the will to be a valid pour-over gift.
Because the pour-over clause protects property not previously placed in a Trust by pouring it into the previously established Trust through the vehicle of the Pour-over Will, the trust need not be funded inter vivos (while you are alive).
It is important to have your major assets already in your living trust while you are alive. Ideally, you should not have to use your pour-over clause. It should be treated as an emergency provision to make sure all your property ends up in the Trust even if you haven’t had time to move into the trust during your lifetime.
The only beneficiary of the Pour-over Will should be your Trust. The living trust itself should list the true beneficiaries of your estate.
A simple will, meaning a will created on its own and not as a pour-over will, can be hazardous to your wealth. Your heirs will be forced to endure the probate process if you leave your significant assets in a simple last will and testament. Probate attorneys charge at least $250 per hour and, or, 4% of the value of the estate undergoing probate. Although the courts have sped up the probate process in recent years for smaller estates and limiting attorney fees for them, probate is an easily avoidable hassle.
The combination of a revocable living trust and pour-over will should be a part of every estate plan as well as a living will, health care, and financial powers of attorney should be.