Estate Planning Knowledge – Pour-Over Wills
Today we are going to look at pour-over wills. If you have heard about a pour-over will, you probably know that it has something to do with inheritances, but maybe aren’t exactly sure what that is. You might also know that a pour-over will is designed to work with a living trust, but might not know exactly how it does this. To help better explain what pour-over wills do and why you might want to include one in your Colorado estate plan, let’s take a look at some essential ideas.
A last will and testament, or will, is one of the most basic and essential estate planning tools available today. Regardless of what you want to accomplish with your estate plan, how much you own, or what your individual circumstances are, your Colorado estate plan will almost certainly rely upon the last will and testament to protect some specific interests of yours. More specifically, most people use a will to make inheritance choices, name a guardian for any young children, and name an executor of their estate.
Living trusts are also incredibly popular estate planning tool because they provide specific benefits that wills do not. Like wills, living trusts are designed to allow you to make inheritance choices. Unlike wills, however, a revocable living trust gives you the ability to make inheritance choices that take place outside of the probate process. Probate can be lengthy, costly, and rule intensive, and avoiding probate is often one of the main goals of people creating an estate plan.
So, if your living trust will allow you to make inheritance choices, it is natural to wonder if you still need a last will and testament. Putting aside the additional abilities that wills allow you, it is nevertheless important to include a last will and testament with your living trust. You do this because there is a high likelihood that you might not of transfer all of your property into the trust’s name before you die. If you forget to transfer property to the trust, or transfer property incorrectly, it falls to your will to distribute that property after your death.
Pour-over wills, therefore, are designed to catch any of this property you left out of the trust’s name and transfer it into the trust after you die. Pour-over wills serve as a kind of safety net that take any forgotten property and “pour it over” into your living trust so the living trust can distribute it as inheritances.
So, pour-over wills are designed to work hand-in-hand with your living trust, while at the same time protecting your trust’s ability to transfer property more easily than you would through a will alone.