A pour-over will is a type of will that works in conjunction with a living trust to ensure that any assets not transferred into the trust during a person’s lifetime are automatically directed into the trust upon their death. It acts as a safety net that captures assets that were inadvertently left outside the trust and pours them into it so they can be distributed according to the trust’s terms.
Pour-over wills are an essential component of a comprehensive estate plan that includes a living trust and are used by millions of Americans as part of their overall estate planning strategy.
How a pour-over will works
When a person creates a living trust as part of their estate plan they transfer ownership of their assets into the trust — a process called funding the trust. However it is common for people to acquire new assets after the trust is created or to forget to transfer certain assets into the trust during their lifetime.
A pour-over will addresses this problem by directing that any assets owned by the person at the time of their death that are not already in the trust should be transferred — or poured over — into the trust. The trust then distributes those assets according to its terms to the named beneficiaries.
Why a pour-over will is necessary
Even the most carefully planned and funded living trust may have gaps. A pour-over will provides important protection by ensuring that:
- Assets acquired after the trust was created are captured and directed into the trust
- Assets that were accidentally left out of the trust during the person’s lifetime are not lost or distributed according to state intestacy laws
- The distribution of all assets is ultimately governed by the terms of the trust providing a consistent and unified estate plan
Without a pour-over will assets left outside the trust at death would be distributed according to a separate will if one exists or according to state intestacy laws if there is no will — potentially resulting in a distribution that does not reflect the person’s wishes.
Does a pour-over will avoid probate
No — a pour-over will does not avoid probate for the assets it covers. Assets that pass through a pour-over will must go through the probate process before they can be transferred into the trust. This is one reason why it is important to fund the living trust as completely as possible during the grantor’s lifetime — the goal is to minimize the assets that need to pass through the pour-over will and the probate process.
For assets that are properly funded into the trust during the grantor’s lifetime probate is avoided entirely. The pour-over will is only needed for assets that were not transferred into the trust before death.
What a pour-over will can also do
In addition to directing assets into the trust a pour-over will can also:
- Name a guardian for minor children — this is something a trust cannot do and is one of the most important reasons to have a will even if you have a living trust
- Name an executor to manage the probate process for any assets that must pass through the will
- Express any final wishes or instructions that the grantor wants to document
Pour-over will vs regular will
A pour-over will and a regular will both direct the distribution of assets after death but they work differently:
- A regular will distributes assets directly to named beneficiaries after going through probate
- A pour-over will directs assets into a living trust after going through probate and the trust then distributes them to beneficiaries according to the trust’s terms
A pour-over will is simpler than a regular will because it does not need to contain detailed instructions about who receives what — all of that is addressed in the trust document. The pour-over will simply says that everything should go into the trust.
Funding the trust to minimize probate
Because assets that pass through a pour-over will must go through probate it is important to fund the living trust as thoroughly as possible during the grantor’s lifetime. Steps to fund a living trust include:
- Transferring real estate into the trust by recording a new deed in the name of the trust
- Updating bank and investment account ownership to the trust
- Updating beneficiary designations on life insurance and retirement accounts to name the trust where appropriate
- Transferring ownership of vehicles and other titled assets into the trust where practical
- Consulting with an estate planning attorney to identify any assets that should be transferred into the trust
The more completely the trust is funded during the grantor’s lifetime the less there will be to pass through the pour-over will and probate at death.
Creating a pour-over will
A pour-over will is typically created at the same time as a living trust as part of a comprehensive estate plan. It must meet the same legal requirements as any other will including:
- The person creating the will must be at least 18 years old and of sound mind
- The will must be written and signed by the person creating it
- The signature must be witnessed by at least two adults in most states
- Many states require or recommend notarization
A pour-over will should be drafted by an estate planning attorney who can ensure that it is properly coordinated with the living trust and complies with your state’s legal requirements.
Key terms to know
- Pour-over will — a will that directs assets outside of a living trust into the trust upon the grantor’s death
- Living trust — a trust created during the grantor’s lifetime that can be used to manage and distribute assets
- Funding the trust — the process of transferring assets into a living trust during the grantor’s lifetime
- Probate — the court-supervised process of validating a will and distributing an estate
- Grantor — the person who creates and funds a trust
- Executor — the person named in a will to manage the estate through the probate process
- Intestacy laws — state laws that determine how assets are distributed when someone dies without a will
- Guardian — a person named in a will to care for minor children
Sources
- American Bar Association — Public Resources
- USA.gov — Estate Planning
- National Institute on Aging — Getting Your Affairs in Order
This article is for general informational purposes only and does not constitute legal advice. Laws vary by state. Consult a licensed attorney for guidance specific to your situation.