What Are Pour-Over Wills?
The pour-over will is generally understood as it relates to relationship revocable living trusts. A living trust holds the assets of the trustor, or person creating the trust. A trustee is a person with the fiduciary responsibility of managing the assets in the trust for the benefit of the beneficiaries. Living trusts must be funded to be effective. In other words, trusts must actually hold assets which means that assets must be titled in the name of the trust.
So, what happens when the trustor passes away and there are assets that have not been transferred into the trust? That is where the pour-over will becomes relevant.
A pour-over will is a type of will stating that any assets or property owned by the trustor at their death will transfer (or pour over) into the trust. The transfer is automatic, as the living trust and pour-over will were created prior to the death of the trustor.
Who Needs a Pour-Over Will in California?
Anyone who wants all their assets to go into a living trust at the time of their death should consider a pour-over will. Even with the best-laid plans, life can be unpredictable, and one or more assets may not be transferred into the trust while the testator is alive or at times assets can be removed from the trust during the life of the trustor (i.e. for purposes of refinancing the property). A pour-over will can be viewed as an “oopsie will.” In this regard, the pour-over will catches all the assets that the testator did not transfer into the trust while they were living, and transferring them after they pass away.
There are other times when a testator simply forgot about an asset or was not aware of the asset. For example, they may have inherited the asset shortly before their death and had not yet been made aware of its existence. A pour-over will is able to move all of these assets into the trust.
Additionally, Motor vehicles are one asset that it is usually best to not include in a trust, for several reasons. First, in case there is an accident that leads to litigation, the details of the trust may be brought up in court. Also, many insurers will deny coverage for vehicles titled in the name of a trust. Finally, vehicles are one of the simplest assets to transfer post death with the Department of Motor Vehicles.
A Pour-Over Will is a Derivation of a Standard Will
A regular Last Will & Testament (“will”) is a way for a testator (the person creating the will) to leave final instructions on how they want their assets distributed. It is a way for them to name who they wish to receive their belongings after they are gone, as well as who they desire to have custody of their minor children. The testator appoints an executor, who once approved by the court will serve as the personal representative of the estate, to distribute the assets as directed by the will and according to the law.
A pour-over will is a much simpler document in that it is still a will, but in its devise of assets its sole devisee is the trust.
Does One Probate Pour-Over Wills in California?
Probate is a court-supervised process wherein the decedent’s estate is administered. It includes paying creditors and distributing assets. It can be a tedious, time-consuming process, which is also a public process. One of the reasons so many people choose to trusts to distribute certain assets within their proposed estate is because of the ability of a trust to avoid probate. However, all wills, including pour-over wills, must go through the probate process.
