As you prepare for a new chapter, perhaps downsizing your home or moving to assisted living, you may wonder how best to manage your estate. Planning ahead can bring peace of mind to you and your loved ones. One tool that might help is a pour-over will.
What is a pour-over will?
A pour-over will is a specific type of will that works with a living trust, which is a separate legal document that holds your assets. Any assets not already placed into your living trust at the time of your passing will “pour over” or transfer into that trust. This ensures that all your remaining assets are distributed according to the terms of your trust.
How does it work with a living trust?
Think of your living trust as a carefully designed container for your assets. You transfer assets such as real estate, bank accounts and investments into this trust during your lifetime.
People, however, sometimes forget to transfer every single asset or acquire new ones shortly before they pass. A pour-over will catches these overlooked assets and directs them into your existing trust. This way, everything ends up in one place, following your instructions.
California law and pour-over wills
California follows the Uniform Probate Code, which recognizes pour-over wills. Still, the state requires probate for assets not funded into your trust before your death. This means that your family may still face court procedures for assets outside the trust, even with a pour-over will.
To avoid this, it is best to move (or “fund”) as many assets as possible into your trust while you are alive. You may need to update deeds, titles and account information.
Is a pour-over will right for you?
A pour-over will is often most beneficial for individuals who have established or plan to establish a living trust. If you do not have a living trust, a pour-over will generally serves no purpose. An experienced attorney can help evaluate your specific situation and determine whether such an estate planning tool fits your needs.