Monday, February 3, 2014

The Pour-Over will in your Living Trust

By Harry J. Lenaburg, Esq.

A primary reason for individuals or couples to establish a revocable living trust is to avoid the necessity of the filing of a probate to administer their estate when they die.  In such a trust the settlors, they are the ones who establish the trust, instruct the successor trustee on how to distribute the property.

I am often asked what a pour-over will is then include in the trust package.  There is a relatively simple reason for this.  First, you must understand that the pour-over will direct that any assets not within the trust should be transferred into the trust if a probate is necessary.  When the trust is prepared it is funded by the transfer of the settlors’ assets into the trust.  Real property is titled to the trust, as well as other assets such as investment accounts or other financial accounts.

Unfortunately it sometimes occurs that an asset is forgotten, or perhaps there is an asset that a settlor is unaware of, such as property, such as stocks, left to the settlor by another, but not transferred in.  Another example I can cite is a home that was initially titled to the trust.  When the settlor desired to refinance the home, the new mortgage company required that the home be transferred back out of the trust.  Once the refinance was accomplished the settlor should have again transferred the home into the trust.  Unfortunately, that step was neglected.  The result was that a probate action to transfer the home was required.  The pour-over will then result in the property being transferred back into the trust, for distribution according to the settlor’s estate plan.  The pour-over will is not just another piece of paper.

An experienced estate planning attorney can help you to get your estate plan in order.  You should consult with one whenever there is a life changing event, marriage, birth, a windfall, retirement or when you are unsure of what steps to take to protect you assets and your family.

The Law Firm of Jessica M. Cotter, P.L.L.C.
18301 North 79th Avenue, Suite F-168
Glendale, Arizona 85308

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