What is a Pour-Over Will?

A pour-over will is a last will and testament that transfers all of the deceased person’s property, upon death, into a revocable living trust. Simplifying; a pour-over will directs that all property that passes through the will be transferred (poured over) into the trust. The pour-over will serves as a safety net for the trust. The property that is transferred through a pour-over will must still be probated, but the process will be shortened and taxes minimized.

Visualize that a trust is a bucket and the grantor’s (the person who creates the trust) assets are held in that trust bucket. Any assets that are outside of the trust bucket when the grantor dies are subjected to probate. The pour-over will scoops up any assets that are outside of the trust bucket at the time of the grantor’s death, then pours them into the trust bucket.

Is a Pour-Over Will Private?

If someone values their privacy, nothing will be revealed throughout the probate procedure. The probate will just state that the assets were moved to a trust and that the trust’s provisions are still private. Additionally, it keeps the estate plan basic because once the assets are transferred into the trust, they will be subject to the same rules as the assets already held in the trust at the time of the grantor’s death. The grantor’s assets will be governed by a single document. Because of this, any estate plan that makes use of a revocable living trust must include the pour-over will.

Additionally, using a trust-based estate plan, parents can designate guardians for their minor children. If the parents do not name guardians for their minor children in the pour-over will, the court will decide who should be responsible for raising the children in the event that the parents pass away. Naturally, parents would prefer to appoint guardians for their children rather than leave this decision up to the court and run the danger of having their kids raised by someone they would disapprove of.

Pour-Over Wills and Probate

A pour-over will provides benefits over a standard probate procedure even though it does not prevent probate. One of the benefits is that the grantor’s payouts are kept confidential. The only thing that will be revealed throughout the probate procedure is that the assets ought to be transferred to the trust. Since the trust is not a matter of public record, none of its provisions will be made available to the public. The only thing the court needs to ensure is that the assets have been transferred into the trust, not that all of the beneficiaries have received notice or distributions. Thus, the probate is kept brief and minimal.

Here’s an example:

Imagine establishing a trust as part of an estate plan, but the grantor forgets to add an investment account or newly purchased property to the trust’s holdings before passing away.

There is now a significant asset that is not covered by the trust agreement and, in the absence of a pour-over will, would be distributed by the court as if the decedent had passed away intestate, which means that he or she had no estate plan in place.

In this situation, the investment account’s money could end up flowing to people who they never intended to benefit. With a pour-over, the probate judge is instructed to pour the asset into the trust, where it will be managed and dispersed in accordance with the trust document. It will preserve the grantor’s wishes.

If you have any questions about pour-over wills, trusts, probate, or estate planning contact attorney Chuck Bendig for a consultation.

A trust for minors is typically established as a strategy to protect assets and distribute property to children without allowing them immediate access to their inheritance. Typically, minor trusts come with instructions that specify when the funds, estate, or other assets may be released to the minor. Trusts for minors are a great approach to guarantee your children’s long-term security and financial future after your passing.

Establishing a trust for a minor serves a number of purposes:

• Proactively plans for the distribution of finances.
• Sets up a timeline as to when the beneficiaries will receive the funds.
• Defines how the funds should be allocated.
• Addresses the plan of action should the minor pass away.

You have flexibility and choices when creating a trust for a minor. You are free to decide between a living trust and a will. Each brings unique capabilities. You can designate a minor as the beneficiary of money or assets you leave behind, but a provision addressing the minor’s age is required.

If the child is a minor at the time of your passing, the property designated to the minor’s trust will be managed by an adult trustee who will administer the funds on the minor’s behalf. You can choose a trustee or the court will assign one.

You can determine the age that the trust funds become available to the minor for use. For instance, you may feel that a young person lacks the maturity to make good financial decisions. Simply specify the age, and the authority remains with a trustee until the young person reaches the appropriate age.

A trust fund for a minor can be set up to disperse the money in installments rather than having a flat payment. This can be done as a safeguard to make sure that all of the money isn’t spent right away and it may have tax benefits.

You can restrict the trust funds to housing, educational, and medical costs. You can choose to include a secondary beneficiary; maybe a grandchild. You can choose to exclude a person’s access to the inheritance.

You can choose to assign a permanent trustee. Maybe the recipient has a mental or health condition that prohibits the ability to administer the funds on their own. Maybe you are caring for a minor that has special needs that will require medical care throughout life.

As you can see, a Minor Trust offers tremendous flexibility and the structure will impact the lives of the people that you leave behind, and your legacy.

The laws are complex. If you need help creating a Minor Trust or want to discuss your options, contact attorney Chuck Bendig for a consultation.

The death of a family member can bring families together, sharing in their grief, but that’s not always the case. For example, the daughter of the deceased may announce that her mom promised her the picture that always hung on the living room wall, but her brother may contest that the picture was promised to him. Both have memories and emotions associated with the picture, so the fight can get acrimonious fast, potentially leading to a split family in which siblings aren’t communicating.

This is a situation where a will would be paramount. The purpose of a well-drafted will is to give clarity to your wishes to make sure this doesn’t happen to your family. Your executor can make sure that splitting up your assets doesn’t split up your family if you follow these best practices:

List the most important or valuable items outside your will.

Your will can get very long if you try to list every possession, family heirloom, and piece of valuable artwork that you want to stay in the family, so create a written statement naming what goes to whom.

• Talk to your children and other family members first to see who values which items most.
• The statement can be created before or after the will. From a legal standpoint, it doesn’t have to be witnessed, but if you expect it to be challenged, have it witnessed and dated when it’s created and whenever it’s amended.
• Obviously, it’s no good if no one knows it’s there: Keep the statement with your will.

You may want to direct in your will that some items be sold. It may make sense to sell items of great value and distribute the proceeds. You can, for example, direct a valuable painting to be auctioned off and the proceeds split equally among your heirs.

Another option is to give everything away during your lifetime. The more you distribute during your life, the less will have to be dealt with after your death.

• When you make gifts, make sure everyone knows about them so that the person receiving the gift is not accused of stealing after your death.
• You can make a deed of gift for tangible personal property retaining the right to keep things in your home as long as you live. To make things extra easy for your executor and heirs, tape a note to an item such as furniture or artwork with the name of its new owner. For tax reasons, it may be better not to gift highly appreciated property during your life because the new owner will lose the step-up basis. Check with your estate planning attorney and tax accountant.

Get appraisals. Be guided in your decisions of who should get what by knowing the monetary value of the items you’re giving away in life or death. This will help your executor and heirs. You can stipulate that the asset be sold and the proceeds divided evenly so that the heir who really wants the asset can buy out the others.

Use a lottery. If you don’t do any of the above, your executor can set up a lottery system for distributing tangible assets. Your will or trust can spell out that your executor or trustee will do this and how then put names or numbers in a hat and have beneficiaries draw for the order to choose items.

Bear in mind that when children are supporting their parents in unequal ways, disagreements may surface, causing serious tensions. If one of your children provides most of your care, either make sure that child is compensated in the will or make sure your will is extremely clear to avoid strife. Remember that after your death, you won’t be around to talk your children through any disagreements.

The bottom line, the more clearly you specify who gets what, the less likely it is that strife will ruin the most important thing in your life: your family. Sometimes, your family will go into the process of affirming their commitment to remain connected as a family. This is the time to reconcile and forgive.

Don’t let the task of dividing your assets prevent you from finalizing and signing your estate planning documents. Call Chuck Bendig, to discuss your concerns. We can help you find the best solution for you and your family.