After you’ve completed your estate planning, you may feel like you’ve taken care of everything, dotted all the I’s, and crossed all the T’s. You’ve written a will and created trusts to keep as much as you can out of the probate process.
But it’s also possible that you’ve overlooked something, which could cause a problem later for your spouse, your beneficiaries, and potentially derail your well-made plans. In that case, a pour-over will take care of anything you may have omitted.
What Is It?
During estate planning, you may hear a term you’ve never heard before: the “pour-over” will. This is actually a will that includes what you may have forgotten to include during your estate planning.
This legal document ensures that any remaining property in your estate not already transferred or mentioned in your will is automatically transferred to a trust you create prior to the time of your death. However, the will still go through probate and could delay the distribution of assets to the beneficiaries.
Without it, remaining property not covered by the will or held in a trust will end up in probate and treated as if the deceased died “intestate,” or without a will. This means that the asset could end up in the possession of someone other than the beneficiary you intended.
How It Works With A Living Trust
After setting up your revocable living trust, you’ll fund it, or transfer any assets to it that you want to keep out of the probate process. The trust is a separate legal entity with its own assets and is separate from your own personal assets. Anything that you don’t transfer into the trust is still a personal asset.
Some assets may be overlooked, or not re-titled into the trust right away, such as a vehicle, and will be seen as a personal asset.
The pour-over will is designed to take any and all personal assets that were either acquired later, or omitted from the trust transfer, and transition these assets into trust assets. The assets will not be treated as personal, and won’t go through probate. Note that the pour-over will go into probate to transfer the assets into the trust, not the assets themselves.
One advantage of a trust is that the details are kept private, unlike a will, which is made public and available to anyone who wants to read it. Another advantage is that the estate is much simpler to administrate and distribute assets to the beneficiaries without the need for probate.
Most of what the pour-over will cover are minor assets since larger assets would already have been transferred into the trust. When the will actually do go through probate, all assets are to transfer directly into the trust, where they will be privately administered by an executor.
Small Estate Probate
Since this form of a will does go through probate for the sole purpose of transferring remaining small assets, it may be eligible for a simplified form of probate. If the remaining estate and assets are worth less than $100,000 and there are no unpaid taxes or debts, the executor can use this simpler, faster form of probate.
This is different than a small estate affidavit, where an inheritor file to claim assets under $100,000.
Small estate probate takes less time and is less expensive than a full probate process, which can take up to a year to complete.
Call Provenza Law To Review And Update Your Estate Planning
If you haven’t reviewed your estate plan in a year or more, the time is now to take care of it.
Adding a pour-over will means that additional or omitted assets can be included and kept out of probate. Your spouse, children, and beneficiaries will receive everything you intended for them, and you’ll have peace of mind that your family won’t have to struggle to take care of your final affairs.
James C. Provenza is a leading Illinois estate planning attorney with years of experience helping clients with estate planning to make sure their wishes are carried out. Call our firm today at (847) 729-3939, or use our online contact form to make an appointment. We’ll help you decide which will fit best into your overall estate plan.