Pour Over Will: Templates & More

A pour-over will is a form of will that “pours” all remaining assets into a trust upon the death of the maker of the will (the "testator") instead of designating specified individuals to receive bequests (gifts made as part of a trust or will). Then, the assets are apportioned among the trust’s designated beneficiaries. Because any assets that are unaccounted for in the will are automatically transferred into a living trust, pour-over wills are a useful way to ensure that all your assets are transferred to a beneficiary.

How Do Pour-Over Wills Work?

To create a pour-over will, the following sequence must be followed in your estate plan:

• First, a living trust must be established. The pour-over will accounts for any assets that the testator did not transfer into the living trust before his or her death. 
• Next, the will is probated.
• Once the probate process is completed, the remaining assets will be controlled by the “successor trustee” designated in the pour-over will. 
• Finally, this successor trustee is responsible for distributing these assets according to the terms set forth in the trust.

A pour-over will is a legal document that works in conjunction with a previously-established living trust. The living trust must be created prior to establishing the pour-over will.  The documents will be created separately, because the pour-over will ensures that any remaining assets after probate is complete will automatically transfer into the living trust upon the death of the testator. Therefore, the pour-over will relies upon the terms set for the living trust. For example, the pour-over will designates the trust as the beneficiary of the pour-over assets and from the trust, the successor trustee will distribute the assets in accordance with the terms of the trust. 

What's the Difference Between a Standard Will and a Pour-Over Will?

The primary difference between a standard will and a pour-over will is that a standard will is written to handle distributing the entirety of an estate. It includes specific provisions regarding how the assets are to be distributed. In contrast, a pour-over will simply moves any unaccounted-for and remaining assets into a living trust, and it makes no declaration as to how these assets are to be distributed. Instead, the pour-over will relies on the living trust to distribute the assets to the beneficiaries.

Pros and Cons of a Pour-Over Will

Advantages:

• A pour-over will makes the process of distributing assets simple. One document (the living trust) controls how the distribution proceedings. 
• It’s easier to change how assets will be distributed. Only the trust needs to be amended, not the will itself. 
• A pour-over will also serves as a protective catch-all. It covers all remaining assets, even any assets that were not transferred prior to the testator’s death or that were simply forgotten about or not accounted for individually. 
• A pour-over will provides a level of privacy that standard wills do not. Trusts do not become public upon death, but wills do. With a pour-over trust and a living will, only the beneficiaries of the trust will have access to the details of the asset distribution. 

Disadvantages: 

• Assets included in the pour-over will still need to go through probate. Probate itself isn’t inherently a bad thing; however, it will take some time for assets to be transferred into the trust. 
• The successor trustee will be required to attend to and preserve the assets during the entire probate process. 

A pour-over will is most suitable for individuals that are:

• Likely to acquire assets after establishing a living trust;
• Are concerned about privacy; 
• Want flexibility to easily change the beneficiaries;
• Prefer to simplify the estate administration process. 

What is the Process for Creating a Pour-Over Will?

A living trust must be established before creating a valid pour-over will. There are several considerations necessary when creating a living trust, mainly:

• What assets will be (or potentially may be) transferred into the trust;
• Who are the beneficiaries; 
• Who will be the trustee. The trustee is ultimately responsible for making sure the assets are distributed per the terms of the living trust, so this might be the most important decision of all.

After the living trust has been created, the testator of the will needs to name the trustee of the living trust as the beneficiary of the pour-over will. The language must be drafted carefully. If it’s not done correctly, then the assets could be transferred directly to the trustee as an individual instead of to the actual living trust. An example provision could be written as:

I give, devise, and bequeath all the rest, residue, and remainder of my estate to the Trustee under that Trust Agreement executed [on date] by me as Settlor and Trustee, as it may hereafter be amended or restated, to be held, administered, and disposed of according to the terms of that Trust Agreement.

In addition, the testator will need to name an executor for the pour-over will itself.  This executor will be responsible for administering the terms of the actual will. For example, this executor will be responsible for transferring all of the remaining assets to the living trust. 

Key Sections in Pour-Over Will that an Estate Planning Attorney Will Review?

Key Parties and Essential Duties

• Trustee. The Trustee is primarily responsible for distributing any and all assets transferred into the living trust via the pour-over will. The trustee must follow the terms set out in the trust document, and they have no discretion to do otherwise. 
• Executor. The executor of the pour-over will is responsible for ensuring the assets get transferred to the specified trust indicated in the will document.
• Guardian/Conservator. A guardian or conservator can be named in the pour-over will. This designated person or persons will be responsible for continuing the care of minor children or incapacitated adults that the testator was caring for before death. Failure to name a guardian or conservator in the will means that the court will make the decision instead.

Important Provisions of a Pour-Over Will

• Nominate the executor. In order for the terms of the pour-over will to be implemented, the document needs to name an executor of the will.  This executor will fulfill the terms of the will. In the case of the pour-over will, the executor will be responsible for transferring the remaining assets to the designated living trust. 
• Designate a guardian/conservator. If the testator is caring for minor children or incapacitated adults, the testator will want that care to continue after the testator’s death.  This means a pour-over will should name the guardian (of minor children) or conservator (of incapacitated adults) who will take over this important responsibility.  Failure to designate this person by name will result in a court appointment of this person, which may or may not be the person the testator wanted.
• Specifically identify the trust. This is typically done by referring to the title of the trust, the date of the trust's execution, the name of the trust’s creator, and the name of the initial trustee.
• Name the trustee correctly as the beneficiary. This is one of the most important provisions in a pour-over will, as naming the trustee by his or her personal name and not in their capacity as the trustee could mean that the assets are transferred to the trustee as an individual, instead of the trust itself. 

What is Probate, and Does a Pour-Over Will Avoid Probate?

What is Probate?

Probate is a legal process that must be completed when assets are left by someone who has died so that the assets are distributed correctly to heirs. In the context of a pour-over will, probate is the administration of the pour-over will. The probate process is carried out by the person named as the executor of the will. The will executor must file the will in probate court, collect and inventory the remaining assets, and transfer them to the designated trust. 

Avoiding Probate

Pour-Over Wills will not avoid probate because the assets are not yet in the trust. The probate process transfers those assets over to the trust. Meanwhile, the pour-over will does provide privacy as to the trust assets, descriptions and their values once those assets and the property passes into the trust because those are not public record.

Revocable v. Irrevocable Trusts

As with wills, there are many different ways to create trusts, but trusts are either revocable or irrevocable living trusts. The type of trust is a very personal decision and depends highly on the specific circumstances. Pour-over wills can work with either a revocable or irrevocable trust. People with high net-worth estates may wish to utilize irrevocable trusts in order to avoid higher tax burdens, while others may wish to take advantage of revocable trusts to maintain more control over their assets.

Revocable Living Trust

Revocable living trusts allow the creator to amend the trust, change assets or beneficiaries, and revoke it entirely during the creator’s lifetime. Thus, revocable trusts allow the creator to maintain control over his or her valuable assets and valuable property within, and trust beneficiaries to, the trust during the creator’s lifetime.

Assets covered in a revocable trust also do not need to go through probate, which can save the beneficiaries time and money. However, assets in a revocable trust are still subject to income and/or estate taxes and are not protected from creditors. 

Irrevocable Living Trust

As the name might suggest, an irrevocable trust is not as easily modified as a revocable trust. Transferring assets into an irrevocable trust means the creator of the trust no longer has any control over the assets.

An irrevocable trust can be designed to provide taxation protection for assets within the trust, which can be a useful planning tool for assets with high appreciation rates.  And unlike revocable trusts, irrevocable trusts are protected from creditors. 

It’s usually fairly simple to identify if a pour-over will is the correct one to use, but it can get a little trickier to make sure it is drafted correctly in conjunction with the trust. It makes sense to invest in a pour-over will that has been reviewed by an estate planning attorney and to customize it to your needs. 

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