Some people who hear about revocable living trusts mistakenly believe that if they use this tool they don’t need to create a last will and testament. While it is true that revocable living trusts will allow you to distribute your estate outside of probate and without a last will and testament, that doesn’t mean you can forget about creating a will.
In fact, revocable living trusts call for a specific kind of will that is absolutely necessary if you want to be sure your estate is properly protected. A pour-over will is absolutely essential if you are thinking of using a revocable living trust. Here’s why.
Wills and Trusts in Florida
Despite their popularity as estate planning tools, revocable living trusts do not allow your estate to minimize estate tax exposure. However, this concern has greatly diminished in the past year because the federal estate tax exemption limit has been established at $5.34 million per person. This effectively means that as long as you don’t leave behind more than $5.34 million in assets, your estate will not have to pay any estate taxes at all.
The reason living trusts have become so popular is because they allow your estate to avoid probate. Florida probate can be complicated, time-consuming, aggravating, and sometimes very costly. It’s therefore an excellent idea to avoid probate whenever possible, and living trusts do this (nearly) perfectly.
As long as your living trust is properly funded, your trust property can pass to your heirs outside of probate. However, even if you transfer all of your individually owned property into a living trust name without a problem, it’s almost inevitable that you’ll forget something or leave something out.
That’s where your pour-over will comes into the picture. A pour-over will’s main purpose is to transfer any property you left out of your living trust into the trust’s name after you are gone. It’s a sort of safety net that catches anything you missed and makes sure that it is transferred to the trust so the trust can distribute it.
A pour-over will is not a specific kind of will as far as Florida law is concerned. That is to say, there is no specific law that addresses pour over wills.
Instead, you have to make sure that your pour-over will meets the same requirements as any other last will and testament in the state of Florida. As long as it meets those requirements it will be legally enforceable. And as long as you use the will to transfer the left-over property, it will work just fine.
If you’d like to learn more about wills and trusts in Florida, and more, attend one of our upcoming free seminars. Visit the seminars page for details.