What Is a Pour-Over Will?
A pour-over will is a legal document that ensures an individual's remaining assets will automatically transfer to a previously established trust upon their death.
Key Takeaways
- With a pour-over will, an individual's remaining assets will automatically transfer to a previously established trust upon their death.
- Pour-over wills can be used with both revocable and irrevocable trusts.
- While pour-over wills must still go through the probate process, they can ensure that the individual's assets go to the beneficiaries they intended.
How a Pour-Over Will Works
A pour-over will works in conjunction with a living trust. In estate planning, trusts provide a way to avoid the sometimes lengthy and costly probate process when transferring assets after the grantor's death. When the time comes to settle an estate, the assets in the trust are distributed to beneficiaries as directed by the grantor.
A pour-over will covers assets that the grantor had not put into their trust—whether by accident or on purpose—by the time of their death. In that way it acts as a sort of safety net.
Pour-over wills must still go through probate, but absent explicit directions provided in a will, the remaining assets would otherwise be subject to laws of intestate succession that apply in the jurisdiction in which the individual died. As a result, the assets might be distributed in a way the individual wouldn't have wanted.
Instead, the pour-over will direct that these assets go to the trust and be distributed according to the grantor's intentions—though not necessarily as quickly as if they had been in the trust to begin with.
The pour-over will can also provide extra protection against legal issues with a trust by stipulating that the assets intended for the trust be distributed to the trust'sbeneficiariesshould it become invalid—or, in the case of an unfunded trust, should it become legally difficult or impossible to fund at the time of the grantor's death.
Does a Pour-Over Will Have to Be Probated?
Pour-over wills need to go through probate. But they will likely contain fewer assets than a regular will, or assets of significatively less value. This allows for summary probate procedures, which are much cheaper and faster than formal probate procedures.
Revocable and Irrevocable Trusts
Estate plans typically pair pour-over wills with living trusts, which require that grantors transfer assets to them prior to their death. Most smaller estates use revocable living trusts, which allow grantors to control the assets in the trust until they pass away.
Larger estates will sometimes use irrevocable trusts to reduce the tax burden for beneficiaries, particularly if they are likely to be subject to estate tax. Once grantors transfer assets to an irrevocable trust, the assets come fully under the control of a trustee.
Pour-over wills can work with either type of trust.
Pour-Over Will Example
Suppose an older couple wishes to distribute an estate to their children and grandchildren. To minimize the legal hassle of the multiple probate processes that would be triggered by their writing individual wills, they decide to establish a living revocable trust into which they can transfer their assets.
Alongside the trust, they both draft pour-over wills directing any remaining assets be added to the trust upon their deaths. When one spouse dies, their car, which the couple titled only in that person's name, ends up flowing smoothly into the trust. The other spouse continues to act as a trustee, so they may continue to use the car as if it were titled to them, even though its title gets transferred to the trust.
Upon the second spouse's death, any assets that have remained in that spouse's name also are transferred to the trust. A named successor trustee then manages or distributes the assets as directed by the terms of the trust.
What Is Intestate Succession?
Intestate succession refers to how an individual's estate will be distributed by the courts if they die intestate, or without a will. Intestate succession laws vary from state to state but typically distribute the assets to any surviving relatives based on their relationship to the deceased.
How Much Does Probate Cost?
The costs involved in probating a will, which can include both lawyer and court fees, vary widely according to the size and complexity of the estate, as well as by location. For example, in Santa Clara, California, they often add up to 4% to 7% or more of the value of the estate.
How Long Does Probate Take?
The American Bar Association says that "The average estate completes the probate process in six to nine months."
The Bottom Line
A pour-over will is intended to ensure that an individual's remaining assets—those that are not already included in a trust they had previously established—will automatically transfer to the trust when they die. It avoids the possibility that the distribution of those assets will be determined by a court, as can happen if a person dies without a will.
