Will Basics
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A will, sometimes called a “Last Will and Testament,” is a document that states your final wishes. A will is used to leave instructions about what should happen to your property after death. An executor is named to carry out the terms of your will and has the legal responsibility to take care of any remaining financial obligations; including gathering information, safeguarding your estate, paying any claims or expenses, and ultimately distributing the balance of your assets. You are also able to name a guardian for minor children and their property.
How a Pour-Over Will Works
A "pour-over" will is used in conjunction with a trust and places property into the trust. A pour-over will works together with a revocable trust by including a provision that states all assets are placed in the trust. The trust document then states how and when those assets will be distributed. In estate planning, trusts provide a way to avoid the probate process when transferring assets after the grantor’s death (a grantor is the person who created the trust).
When the time comes to settle an estate, assets funded into the trust get distributed to beneficiaries as directed in the trust document. A pour-over will covers assets that the grantor has not funded into the trust at the time of death. Absent explicit directions provided in a will, remaining assets would instead be subject to laws of intestate succession as established by the jurisdiction in which the individual died.
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Pour-over wills act as a backstop against issues that could frustrate the smooth operation of a living trust. They ensure any assets a grantor neglects to add to a trust, whether by accident or on purpose, will end up in the trust after execution of the will. The 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’s beneficiaries should 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.
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