If you ask some clients, their primary goal in estate planning is trying to avoid probate at all costs. If that is your goal as well, then you might want to consider a pour over will. Essentially, a pour over will can be used, along with a living trust, to select property that will “pass through” your will after your death and be “poured” into an established trust. The property can then be distributed to the beneficiaries identified in the trust.
Some of the advantages of a pour over will
Although in some cases, having only one estate planning document that handles all of your property, there are some advantages to using a pour over will instead. The first benefit is that a pour over will can handle property that you may not have transferred to a trust before your death, but intended to be handled in that manner. Another advantage is the amount of privacy that a pour over will can provide, as opposed to the very public nature of a simple will. Because a pour over will has a trust component, the identity of your beneficiaries and the nature of your property will not become public record, as it would with regular wills.
Pour over wills would still require the probate process
One possible disadvantage of pour over wills is that the property transferred through them must still go through probate. Even though your privacy can be preserved, the distribution of the trust property will be delayed in probate before ultimately being distributed to the trust. In order to avoid that step, the property can be passed on through a living trust directly, as opposed to pour over wills. That could potentially allow your heirs to receive their inheritances much sooner.
Choosing the property to include in pour over wills
It is not uncommon for pour over wills to only address a portion of a client’s assets. Some clients prefer to transfer most of their property to a living trust. In those cases, only minor assets are transferred through pour over wills, along with any items that were unintentionally left out of the living trust. This method still makes the probate process simpler and often less expensive, depending on the size and nature of the estate.
The responsibilities of the executor of a pour over will
As with other types of wills, a pour over will should identify an executor to handle and close the estate after your death. The duties of the executor usually include gathering the assets, satisfying debts, paying taxes, and ultimately distributing the assets to the named beneficiaries. These duties are made easier by incorporating pour over wills. The sole duty of the executor of a pour over will becomes taking all of the assets identified in the will and transferring them to the trust.
Choosing a trustee for the trust component of pour over wills
Choosing a trustee is always an important decision. The trustee will be the one to ensure that the terms of your trust are followed. The most common choices for trustee are adult relatives or a trusted friends. You are more likely to receive personal attention from someone you know. With these choices, your trustee may be less inclined to charge a fee for their service. A financial institution, on the other hand, is responsible for managing several trusts, which often results in less personal service.
The advantages of using a professional trustee
You can always choose to employ a professional trustee. A financial institution or trust company would certainly be qualified and highly capable of serving as trustee. In fact, these professionals have the knowledge and expertise in managing funds that can be most useful. However, financial institutions and trust companies are often more expensive than private trustees. But, the choice is yours.
You need to also select a successor trustee
The successor trustee is the person identified in your living trust to take over at your death or upon your incapacity. The duties of a successor trustee are similar to that of an executor, except that the trustee solely has control over the trust property. The successor trustee has no authority over property that is included in your probate estate.
If you have questions regarding a pour over will, or any other estate planning needs, please contact the Schomer Law Group for a consultation, either online or by calling us at (310) 337-7696.