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Pour-over Will

What’s a “pour-over” Will? It’s a question I’m asked every so often when explaining an estate plan. The short answer answer is that when a Will has a “pour-over” provision it is designed to act as a safety net for a trust. I’ll elaborate.

Pour-over wills are a necessary instrument in a trust-centered estate plan. Undoubtedly, the most common type of trust utilized is a revocable living trust — which is a contractual relationship whereby a “Settlor” (sometimes referred to as a “Grantor”) creates a trust where property in the trust is managed by a “Trustee” for the benefit of “Beneficiaries.” What is often confusing to some is that these three roles are often occupied by the same person. A successful trust is a two-step process. First, an attorney must create the Trust; second, assets have to be properly titled in the name of the trust to ensure its efficacy. Accordingly, the precise legal manner in which a successful Trust arrangement works is that when all of a person’s estate is titled in a trust, upon his death, the trusteeship immediately passes to a successor trustee. In effect, the original Settlor passes away without any assets to his or her name, and thus there is no need for a probate proceeding.

However, individuals do not always title property in the name of the trust, or they title it incorrectly. This is where the security blanket of the pour-over will comes into play. To combat titling errors, a “pour-over” will generally accompanies a trust, thereby directing all assets owned by an individual that are not secured in a trust at death to be “poured” into the trust and to be distributed in accordance with its terms. Although the pour-over will acts as a security, it is still in your best interest not to have to rely on it. Implementing a pour-over will would mean that a probate estate needs to be opened in the county of the decedent. This translates into time, aggravation, and sometimes very high expenses.

So, the pour-over will is a necessary component of every trust estate plan, but if everything is handled properly, it should not have to be used.

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