When most people think of an estate plan, their thoughts may immediately go to a last will and testament. Traditionally, wills have been the way that people decide how to distribute their assets upon death.
A trust-based estate plan is a modern approach that uses a revocable living trust to distribute assets. With a trust-based plan, a pour-over will supports your plan by transferring any non-trust assets into the trust. In this way, you can use the trust to manage the majority of your assets while you are alive – and can ensure that any remaining assets inadvertently left out of the trust (or not transferred through beneficiary designations) will also be handled by the trust in accordance with your wishes.
Based in San Francisco, Blacksburg Law is committed to providing thoughtful, innovative estate planning services to our clients throughout the Bay Area and California. We believe that an estate plan should be more about how you want to live, instead of what happens when you die. Our flat fee estate planning services allow us to collaborate with clients so that they have more than just a set of documents. Instead, our clients walk away with an emotional connection to a plan that represents what really matters to them.
What Is a Pour-Over Last Will and Testament?
As the name implies, the central document of a trust-based estate plan is a revocable living trust. However, there are a number of ancillary documents that are required to ensure that the overall plan is effective – including a pour-over last will and testament.
With a pour-over will, any assets not owned or directed to the trust will be transferred to it. This helps to achieve the goals of a trust-based plan, which includes centralizing management and distributions, minimizing probate and increasing privacy. In this way, a pour-over will functions like a safety net, gathering up any remaining assets and ensuring that they go to the correct place (the trust).
In addition to making sure any remaining assets go into the trust, the pour-over will also designates your fiduciaries for after-death issues, such as the personal representative (executor) and guardian for your minor children. The personal representative is almost always your successor trustee (as well as your agent in a durable financial power of attorney, but more on that elsewhere. The pour-over will simply gives them authority to go to court, if necessary. They can also lawfully negotiate and resolve debts where the trust isn’t involved.
At Blacksburg Law, we liken the estate planning process to taking a road trip, and ask our clients to think about where they want their fiduciaries to go and what they want them to do when they get there. In this metaphor, the documents are the vehicle: they are critical to going on that trip, but they aren’t the trip itself. If the trust is the body of the car, then the pour-over will is one of the vehicle parts. Ideally, all of the documents in your trust-based estate plan will work together to help you achieve your goals.
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Why Do I Need a Pour-Over Will?
A pour-over will functions like a backstop to a revocable living trust. Realistically, no one puts all of their assets into a living trust. Some assets – like vehicles and life insurance proceeds – are either not trust assets or are typically not put into a trust. Some assets, like those life insurance proceeds, can be transferred in via beneficiary designation. But if those designations aren’t updated, or fail for some reason, the pour-over will ensures that these assets are transferred into the trust upon the trustmaker’s death to be distributed or managed by the successor trustee.
When you choose a trust-based estate plan, a pour-over will is one of several documents that functions like a multi-tool. The trust can allow you to operate with privacy and efficiency. Other documents – including the pour-over will – allow you to handle responsibilities that are not covered by the trust.
For example, credit cards are not part of a trust, yet most people use them in their day-to-day lives. When you pass away, your estate will be responsible for any outstanding balance on your credit cards. Since credit cards aren’t a trust debt (they’re personal to you), your executor (who will probably also be your trustee) is responsible for this debt and any other non-trust debts that you may have.
The most important function of a pour-over will, however, is to make sure that any assets that are not currently in your trust “bucket,” or automatically moved there through a beneficiary designation, are ultimately moved there. This makes the trust the central distribution machine. It also protects your privacy, as your estate will only have to go through probate if the remaining assets are greater than $184,500.
Without a pour-over will, any assets that have not already been placed into the trust will be subject to the laws of intestate succession (if there was no will in place). The end result may be that your assets aren’t distributed in a way that you would have wanted.
At Blacksburg Law, we are big advocates for trust-based estate plans. We believe that these plans are efficient, provide greater leverage against creditors and errant beneficiaries, and allow you to focus on how you want to live instead of simply on what happens when you die. A pour-over will is an essential component of any trust-based estate plan. It helps to ensure that your wishes are followed – and that the ultimate goals of your trust-based are achieved.
Considering a Trust-Based Estate Plan? We Can Help.
A trust-based estate plan is a flexible, efficient alternative to a traditional will-based plan. Our law office will work with you to develop a plan that reflects who you are and what is important to you. A pour-over will is just one component of this comprehensive estate plan.
Blacksburg Law is committed to helping individuals and families do a deep dive into the estate planning process. Over the course of several consultations, we will help you figure out what success looks like for you – and what matters the most to you and your loved ones. By getting to know you, we can draft documents that reflect who you are as a person and that have the legal structure necessary to accomplish your financial and estate planning goals.
All of our estate planning services are offered on a flat fee basis so that we can devote the necessary time to this process without worrying about running up a large bill. To learn more or to schedule a consultation with a California estate planning lawyer, give us a call at 415-508-5600 or fill out our online contact form.