Do you have an assortment of assets? Are you worried you will leave something out during estate planning? Are you trying to avoid the inevitable family feuds due to the results of a will? A pour-over will may be the answer to some of your problems.
If you are curious about what a pour-over will is, how it might help solve some of your estate planning problems, or how it can complement your last will and testament, Montagna Law can help. Contact our experienced Norfolk estate planning attorneys today for legal advice and guided help.
This type of will is used alongside a revocable living trust or an irrevocable trust like a special needs trust. It is an estate planning tactic to have this pour-over will have a single beneficiary: the revocable trust. That way, any assets you did not include in the trust will eventually be placed there through this type of will, becoming trust assets.
A pour-over will is a separate document from your last will and testament. It is a type of will used to cover any assets you did not initially incorporate into a trust. The last will and testament divides your remaining assets among your surviving beneficiaries. While the last will may decree that particular beneficiaries get certain assets, the pour-over will instead places assets into an existing trust.
Every trust needs a trustee whose responsibility is to manage the trust and distribute its assets when necessary. They are vital when dealing with pour-over wills because they are in charge of the trust, which is the beneficiary of the will.
A trust, in legal terms, is an entity that can own property, and the trust becomes the owner of the property the pour-over will places into it. Obviously, the trust cannot manage its own affairs, so the trust’s creator (the grantor) designates a person to manage the trust (the trustee). Your estate planning lawyer can help you understand more about how a pour-over will functions and the role of both the grantor and trustee.
There are several benefits to using a pour-over will as part of your estate planning. The first is that it is simple to create and adjudicate. The second is that it maintains privacy regarding your estate. The third is that it is complete in terms of covering everything you may have forgotten.
A pour-over will ensures that everything is controlled through a single entity: the trust. You, the grantor, place everything into the trust, and the trust makes it clear who is entitled to what. It is far easier, in this case, for the executor and trustee to wrap up the estate after your death and ensure that all of the property is appropriately distributed as you wish.
If you use a traditional will to distribute your property to your beneficiaries, it becomes a matter of public record. It is not uncommon for people to have some aspects of their estate that they wish to remain protected and private. This is where trusts come into play.
Trusts do not become public records after you die. They remain private, so the details of which loved ones inherit your property are unknown to everyone who wants to look. This is a vital form of asset protection. Some celebrities pour all their personal property and even real estate into trusts, leaving fortune hunters and reporters out of luck when they try to dig into the estate. This level of privacy can also, for example, protect your minor children from undue scrutiny.
Particularly if you use an irrevocable trust, you are not likely to transfer everything you own into it, which would complicate accessing your personal property while you are alive. For this reason, nobody puts all their property into a trust. A pour-over will covers all assets that you do not transfer before your death.
The biggest reason for using a pour-over will is that you avoid probate. Pour-over wills also offer privacy because trusts are private while standard wills are not. They also serve as a safety net to capture assets not transferred to or included in a person’s revocable trust document. It is common for clients to forget or overlook various items or parts of their estate when it comes to creating their trust. Pour-over wills also help capture items clients may acquire after creating their revocable trust.
There are essentially four steps to creating a pour-over will: You must create a trust, name a trustee, create the will, and name an executor to handle the distribution process.
Before you can create a pour-over will, you must have a trust. Setting up the will first can be problematic if an unexpected occurrence somehow blocks your ability to set up a trust. If, for example, you have an accident and an advanced medical directive, or living will, stops you from getting the trust set up, a pour-over will becomes useless. The pour-over will cannot create a trust itself.
After the trust is complete, you must name a residual beneficiary. This person gets your residual estate, consisting of any assets not transferred into the trust before your death.
If you want the estate to go into the trust, you name the trustee as this residual beneficiary, but be sure to list them as the trustee of your trust, not simply as the beneficiary. The wording of this must be very precise, so it is a good idea to work closely with a Norfolk estate planning attorney so you avoid accidentally leaving your estate to a person rather than naming a trustee for the trust.
Next, you will create the will and name an executor of the will. The executor is someone whose job it is to carry out your wishes as specified in your will. When it comes to a pour-over will, the executor is the one who moves your property into the trust before the trustee takes control over the assets. The trustee is often chosen to serve as executor, which can streamline the entire process. Ultimately, the choice is yours, and your Norfolk attorney can help you make the right choice.
You can use your pour-over will to address many other estate planning issues. It can, for example, ensure that your minor children have health care and guardianship. You can choose someone to care for your pets. You can pass items not usually part of the trust, like vehicles, to specific individuals. Again, your Norfolk attorney can help you iron out the details.
A pour-over will‘s cost depends significantly upon your assets, like any aspect of estate planning. The costs also consider the size of your estate, how complex your plan is, where the estate is located, and how many documents must be created.
The probate process after passing can be very complex. Getting it right can save your beneficiaries a great deal of heartache. The experienced Norfolk attorneys at Montagna Law have years of experience dealing with all aspects of Hampton Roads estate planning, from power of attorney to advance medical directives, wills and testaments, trusts, and, of course, pour-over wills. Contact us by calling 757-622-8100 or using our online contact form to schedule an in-person appointment to discuss your needs today.
Jon Montagna received a Bachelor of Arts in Literature from American University in Washington D.C. and graduated Cum Laude from the University of Miami School of Law in 1999. Jon practices law in the Hampton Roads Virginia area.