Do you need pour-over Wills in estate planning, or is a trust enough? Find out how these estate planning documents can help simplify your estate planning and administration, making it easier for your family and the Florida probate court to honor your wishes after your death.
A “pour-over Will” is an estate planning tool that is generally paired with an existing living revocable trust or irrevocable trust. It is a specific form of Last Will and Testament that names your trust as the sole beneficiary of your estate, transferring any assets you owned in your own name at the time of your death into your trust. This allows the trustee to manage all of your assets, even those that aren’t easily transferred to a separate trust entity.
A pour-over Will doesn’t work on its own. Instead, it “pours” all your assets into the separate trust entity, so they can be distributed without the public oversight of the Florida probate court. While you can create a trust without writing a pour-over Will, doing so creates the risk that anything not properly transferred into the trust will need to go through the intestate probate process as though you had no estate plan at all. This could easily cause your assets to go to different beneficiaries than you had intended.
Remember that a trust must be properly funded to be effective. If your estate plan is based around a revocable living trust or irrevocable trust, you must have properly transferred your property into the trust’s name before passing away. Most often this involves:
However, other property, including cryptocurrency accounts, can be harder to transfer during life. That’s why most people who create a trust also need a pour-over Will. It serves as a safety net, catching whatever property should have been included in the trust that either didn’t get there, was improperly transferred, or was not easily transferred during your lifetime. Once transferred, the property can be managed, maintained, and distributed to your beneficiaries by the trustee according to the directives included in the trust documents themselves.
A pour-over Will also puts all of your estate planning directives together in one place: your trust. This makes it easier to update your estate plan, and ensure that your trustee will honor your wishes regarding who will receive which property, and under what conditions. If you use a standard Last Will and Testament, awarding property to beneficiaries outside the trust, you could accidentally create conflict by updating one document but not the other.
Most Florida residents who create a trust do so at least partially to avoid going through probate. Property that has been properly transferred into the trust doesn’t go through probate because it belongs to the separate trust entity. This can also help high-net-worth individuals avoid estate taxes and substantial probate court costs.
However, in Florida, a pour-over Will does go through probate. This means that whatever property has not been transferred prior to death will become part of the public record and count toward your estate administration fees and estate taxes. It also creates a chance that a disinherited heir, surviving spouse, or unhappy family member may contest the pour-over Will and try to take their intestate share from whatever is left outside the trust. That is why it is essential to fully fund your trust after creating it, rather than relying on the pour-over Will to complete the transfer after your death.
Including a pour-over Will in estate planning is key to protecting your assets and making certain that everything is treated consistently and correctly after your death. At Harrison Estate Law, we know how to best use a pour-over Will in estate planning. We can help you create, protect, and fund a trust so that your family will be taken care of after you pass away. Please contact us online or via email or call 352-559-9828 to schedule a free consultation. If you don’t live close to Gainesville or are practicing social distancing, we are happy to set up a phone or Zoom call.