What is a Pour-Over Will and How is It Used?
A pour-over will is a type of last will and testament typically used in trust-based estate planning. Unlike a traditional will, which directs how your property will be distributed to beneficiaries, a pour-over will states that assets not funded into your revocable living trust should go into the trust when you pass away.
Why is this distinction important? Let's say the grantor, the person for whom the revocable living trust was created, failed to fund all of his or her property into the trust. If there was neither a pour-over will nor a traditional will, the “omitted” property could go to people the grantor never intended to receive it, even though there was a revocable living trust.
Let's look at a hypothetical example. A grantor creates a revocable living trust and funds it. A few years after creating and funding the trust, however, the grantor buys additional property, such as a second home. Unfortunately, the grantor forgets to fund this new home into the trust. If the grantor then passed away without a traditional will specifying who should receive the home, or a pour-over will directing that all assets should go into the trust, the second home could be distributed according to the laws of intestacy. In such a situation, the second home might go to an individual the grantor never wanted to have it.
In essence, a pour-over will functions like a safety net. You may never need your pour-over will, but it can help ensure that even if you neglect to fund certain assets into your trust, they will still go into the trust after you pass away.
Determining the best Will to support your needs and wishes is what we do each and every day for our clients. We listen and strive to provide top-notch client service and legal consultation. You can get started with a complimentary consultation by calling our team at 260-969-1177.
