A pour-over will would be necessary if you use a revocable living trust to facilitate future asset transfers. Before we look at pour-over wills, we should explain the value of revocable living trusts.
Efficient Asset Transfers
If you use a standard last will to arrange for the future distribution of your resources to your heirs, you name an executor when you create the document. The executor is the estate administrator. This individual is empowered to handle the business of the estate after your passing.
You may envision the executor distributing resources to the heirs shortly after the funeral. Unfortunately, the executor cannot distribute assets right away. The will must be admitted to probate before the heirs can receive their inheritances.
Probate is in place to provide protections. The validity of the will is determined by the Surrogate’s Court, and will challenges could be presented during probate. Final debts must be paid during probate, and the executor will prepare the assets for distribution to the heirs if the court finds that the will is valid.
Though the protections are positive, there are some drawbacks that go along with the probate process. It can be time-consuming, and there are significant expenses that can accumulate during probate.
If you use a revocable living trust to transfer assets, the trustee that you choose can distribute assets to the beneficiaries after your passing outside of the process of probate. This allows for more efficient asset transfers.
Even if you have a revocable living trust in place, you should also have a pour-over will to facilitate complete probate avoidance.
When you fund the trust with assets, you may not place everything that you own into the trust at first. You may also accumulate property after you create the trust and decide not to convey this property into the trust for one reason or another.
If you pass away with certain property still in your direct personal possession, that property would become probate property after you die, even though you have a revocable living trust.
With a pour-over will you allow the trust to capture assets that you have in your personal possession at the time of your death. As a result, everything that you want to pass along to your heirs can be distributed outside of probate.
Free Report on Revocable Living Trusts
In this post we have provided some basic information about revocable living trusts and the value of pour-over wills. If you would like to learn more, download our special report on the benefits of living trusts.
This informative report is being offered free of charge at the present time, and you can obtain access through this link: Free Living Trust Report.