Sherina So King Li, JD, Certified Public Accountant
IRS AUTHORIZED E-FILE PROVIDER
BILINGUAL ENGLISH/CHINESE (CANTONESE & MANDARIN)
 
 


 
 
 

  Pour Over Will  
     
     
  If you’ve looked into creating a revocable living trust to avoid probate, you may have heard of a “pour-over will.” This kind of will is often used with a living trust. Under the terms of a pour-over will, all property that passes through the will at your death is transferred to (poured into) your trust. Then it’s distributed to the trust beneficiaries you named while you were alive.

Advantages of Pour-Over Wills
Why have a will that does nothing but transfer property to your trust? (For that matter, why do you need a will at all if you’re using a living trust to leave your property?) The answer is that many estate planners think it’s a good idea to have all your assets covered by the terms of just one document, the trust document. This arrangement offers several advantages.

  • Simplicity
    When everything is controlled by just one document, the trust, it makes it clear who gets what. It’s also easier for the executor and trustee who are in charge of wrapping up your estate after your death.

  • Completeness
    You’re not going to transfer everything you own into your living trust. (No one does.) A pour-over will takes care of assets that you don’t get around to transferring to the trust before your death.
  • Privacy
    Trusts, unlike wills, are private; they don’t become public records after your death, available to anyone who wants to look at them. This keeps the details of who inherits your property more private.


Disadvantages of Pour-Over Wills
The main downside to pour-over wills is that (like all wills), the property that passes through them must go through probate. That means that any property headed toward a living trust may get hung up in probate before it can be distributed by the trust. This may force the living trust to go on for months after the death of the will and trust maker. In contrast, property left directly through a living trust can usually be distributed to the beneficiaries within a few weeks after the trust maker’s death.

Fortunately, in most cases, not too much property passes through a pour-over will. If you do good job of estate planning, you’ll transfer all of your valuable assets to the trust while you’re alive. Only the leftovers—things of minor value—should pass under the terms of the will. And if the value of the property that passes under the will (often called the “probate estate”) is small enough, your estate may qualify for special small estate probate procedures. These procedures are quicker, simpler, and less expensive than regular probate. In most states, they can be used for any kind of property except real estate.

Executor’s Duties
In the case of a pour-over will, the executor has just one job: to take all assets that passes under the will and put them into the living trust.

You’re going to all the trouble of setting a revocable living trust to spare your family the expense and delay of probate. So it would defeat the purpose if a formal probate proceeding were necessary just to get assets into your living trust. But it’s a possibility. Unless your estate qualifies for probate shortcut, assets that pass through the pour-over will need to go through probate.

Successor Trustee’s Duties
Once the assets are held in the name of the trust, they become the responsibility of the successor trustee—the person you named in your living trust to take over at your death or incapacity.

 

 

 
 

To set up an appointment, contact Sherina Li, Attorney at Law, at 510-909-1904 or li.sherina@gmail.com