Adults establishing estate plans often choose between wills or trusts as their primary testamentary instruments. For some people, both documents can be beneficial. Trusts are helpful for people concerned about costly estate taxes, disputes among beneficiaries or creditor claims. They can help people preserve assets during their golden years and qualify for Medicaid when their health declines.
When people intend to use trusts to control and distribute their assets after they pass, the creation of a pour-over will is often a smart estate planning move.
What does a pour-over will do?
A standard will provides instructions regarding the distribution of property to beneficiaries when the testator who drafts the document dies. A pour-over will is different. It provides instructions to transfer resources to a trust after their passing. Unlike transfers made while the testator is still alive, assets transferred to a trust using a pour-over will pass through the probate courts.
Pour-over wills can address assets that were not large enough to justify transferring to a trust while the testator is alive. It can be a means of addressing the residuary estate not included in detail elsewhere in the estate plan. Pour-over wills can also help in scenarios where testators prefer to retain personal control over certain assets until they pass.
Adding the right documents to an estate plan can give people peace of mind as they age and control over their legacy after they die. Pour-over wills can help fund trusts, which makes them valuable for testators who want control over their legacy or protection from probate complications.