As a Grand Rapids, MI estate planning attorney, I see a growing number of families who recognize the benefits of a living trust centered estate plan and want a living trust as the foundation of their estate plan. Many times the other documents in a comprehensive living trust plan are overlooked or giving only a small amount of attention.
One such important planning document is the pour-over will. No, it’s not actually called that in most cases. “Pour-over” is the common way to refer to it and helps explain what it is and how it works. Although the hope is that you never need to use your pour-over will, it plays a very important role if you do.
A pour-over will is . . . well, a will. More specifically it is the type of will that is often used in a comprehensive living trust estate plan. In such a plan, the living trust plays the most important role. In your living trust you will control who receives what, how they receive it, when they receive it, what happens if you are incapacitated, who is responsible for managing the trust assets, and much more. Think of it as the “hub” of the estate planning “wheel.”
Well, the catch is this – a living trust controls only what it owns. Said another way, if the living trust doesn’t own it, whatever “it” is will go through the probate court process (unless it is directed by a beneficiary designation or other non-probate transfer mechanism). That is why it is so critically important to make sure your living trust is fully funded (read my blog post on the topic by clicking here). But what happens if something you own is not owned by the living trust and ends up going through the probate court process?
That’s where the pour-over will comes in. The reason this type of will is commonly referred to as “pour over” is because it is designed to make sure anything that is part of your probate estate goes into your living trust after you pass away – it “pours” it into the trust. It does this by directing that it happen – the will says that any property left in the probate estate at the end of the probate process will be distributed to the living trust.
And like all the parts of a comprehensive living trust estate plan, it is important to make sure your pour-over will is reviewed on a regular basis. If not, it could fail to do what you wanted it to do!
Have questions? Call us at 616-827-7596 or contact us via email.
Michael Lichterman is an estate planning and business planning attorney who helps families and business owners create a lasting legacy by planning for their Whole Family Wealth™. This goes beyond merely planning for finances – it’s about who your are and what’s important to you. He focuses on estate and asset protection planning for the “experienced” generation, the “sandwich generation” (caring for parents and children), doctors/physicians, nurses, lawyers, dentists, professionals with minor children, family owned businesses and pet planning. He takes the “counselor” part of attorney and counselor at law very seriously, and enjoys creating life long relationships with his clients – many of which have become great friends.