A Last Will and Testament is typically the first estate planning document executed when creating an estate plan. Although some people choose to use a Will to distribute their entire estate, most people prefer to incorporate additional estate planning tools and strategies to create their estate plan. One reason for this is the desire to avoid probate because of the costs involved in probating an estate, both in terms of time and money. While it is frequently a good idea to depend on estate planning tools other than a Will to distribute your estate assets, you may wish to include a pour over Will in your estate plan at the very least. What is a pour over Will though and when should you use one in lieu of a traditional Last Will and Testament?
A “pour over” Will is a term used to describe a specific type of Last Will and Testament that is used to “pour over” assets from your estate into a trust at the time of your death. In a traditional Will the testator makes gifts to beneficiaries within the Will itself. In a pour over Will, however, instead of making gifts to beneficiaries within the Will document itself, the testator uses the provisions of the Will to directs all estate assets to be transferred into an existing trust. The trust terms then determine what happens to the assets held by the estate at the time of the death of the testator.
Why Not Just Use A Trust Alone?
If the goal is to distribute assets through a trust instead of a Will, you may be wondering why you can’t just use a trust alone. The primary reason is that you are unlikely to account for all of your estate assets with just a trust. You will undoubtedly remember to transfer your major assets into the trust; however, you may fail to transfer smaller assets into the trust prior to your death. Personal items, vehicles, less valuable assets, bank accounts used for day to day banking, and even valuable assets purchased just prior to your death are all examples of assets that might be left out of your trust at the time of your death. These assets must be handled in some way after your death because they are part of your estate. A “pour over” Will allows you to direct all assets not already transferred into the trust to be “poured over” into the trust after your death. It effectively acts as a back-up plan to ensure that all assets are taken care of without the need for a lengthy probate of your estate.
What Happens without a Pour Over Will?
If you fail to create a pour over Will, depending entirely on a trust to distribute your estate assets after death, you may set your loved ones up for a long wait while your remaining assets make their way through the probate process. Moreover, because those assets are not addressed in a Will or trust, they will be handled using the North Carolina intestate succession laws, meaning you will have nothing to say about who receives those assets. Important, valuable, and/or sentimental assets could end up in the hands of someone you would never have gifted them to using the intestate succession laws.
To ensure that your estate is handled in the manner you wish it to be, it is important to have a pour over Will in place if you are planning to use a trust as your primary method for determining how your estate should be handled after your death.
If you have additional questions about how a pour over Will might fit into your estate plan, or estate planning in general, in the State of Florida please contact the experienced estate planning attorneys at Kulas & Crawford. by calling 772-398-0720 to schedule an appointment. In addition, please download a free copy of our “Solid Estate Plan Checklist.”