Estate planning involves using various legal devices to protect what you have built so that it can be passed on to your loved ones. A main goal of this process is to limit the assets and amount of funds that have to go through probate. One measure that can be used for this purpose is a “pour- over will.” If you have never heard of one, you probably want to know: Do I need a pour-over will?
A will is a legal document wherein you can name your assets and heirs and include information such as who you would prefer become your children’s guardian or pet’s caretaker. The assets that you have in your legal possession at the time of your death will become part of the probate estate, meaning they will have to be processed through probate before being distributed to your heirs. This process can be expensive and take several months to complete. One way to keep your property and funds out of probate is by placing them in a qualifying living trust. The great part about a living trust is that the trust creator, is free to receive disbursements from the trust even though he or she technically no longer own the assets. When a trust owns assets, they are no longer yours and cannot be included in probate when you die.
A “pour-over” will does all of the things an ordinary will can do except it also contains a provision that directs that some or all of your property be placed in a trust rather than passing directly to specific heirs. The “pour-over” part means that anything left over after your estate is distributed will go into a trust. When you create a pour-over will you can direct assets to an existing trust or one that is made along with your will.
Using a pour-over provisions helps ensure that property that did not end up in the trust during the lifetime of the creator ends up there. There can also be other benefits such as protecting assets and making sure they are safeguarded by a trustee. Diverting funds into a trust also can reduce your estate to the point that probate may be unnecessary.
Not every types of asset can be poured over into a trust. For instance, real property that is jointly owned with surviving parties and retirement accounts cannot be pour over.
At the Law Offices of Alice A. Salvo, we are experienced California estate planning with the knowledge and experience you need to help you plan for the future. Schedule a consultation today, so we can help you explore your options and make informed decisions.