Pour-Over Will

A pour-over will is a legal document that ensures an individual’s remaining assets will automatically transfer to a previously established trust upon their death.

A pour-over will works in conjunction with a trust. In estate planning, trusts provide a way to avoid the probate process when transferring assets after the grantor’s death. When the time comes to settle an estate, assets funded into the trust get distributed to beneficiaries as directed by the grantor. A pour-over will covers assets that the grantor has not funded into the trust at the time of death. Absent explicit directions provided via a will, remaining assets would instead be subject to laws of intestate succession as established by the jurisdiction in which the individual died.

Pour-over wills act as a backstop against issues that could frustrate the smooth operation of a living trust. They ensure any assets a grantor neglects to add to a trust, whether by accident or on purpose, will end up in the trust after execution of the will. The will can also provide extra protection against legal issues with a trust by stipulating that the assets intended for the trust be distributed to the trust’s beneficiaries should it become invalid or, in the case of an unfunded trust, should it become legally difficult or impossible to fund at the time of the grantor’s death.

Estate plans typically pair pour-over wills with living trusts, which require that grantors transfer assets to them prior to their death. Most smaller estates use revocable living trusts, which allow grantors to control the assets in the trust until they pass away. Larger estates will sometimes use irrevocable trusts to reduce the tax burden for beneficiaries, particularly if they will be subject to an estate tax. Once grantors transfer assets to an irrevocable trust, the assets come fully under the control of the trustees. Pour-over wills work with either type of trust.

Suppose an elderly couple wishes to distribute an estate to their children and grandchildren. To minimize the legal hassle of multiple probate processes that would be triggered by their writing individual wills, they decide to establish a living revocable trust into which they can transfer their assets. Alongside the trust, they both draft pour-over wills directing any remaining assets be added to the trust upon their deaths. When the husband dies, his car, which the couple titled only in his name, ends up flowing smoothly into the trust. The wife continues to act as a trustee, so she may continue to use the car as if it were titled to her, even though its title gets transferred to the trust. Upon the wife’s death, any assets that have remained in her name also get transferred to the trust. A named successor trustee then manages or distributes the assets as directed by the terms of the trust.

This information is not intended to be tax or legal advice, and it may not be relied 
on for the purpose of avoiding any federal tax penalties. You are encouraged to seek 
tax or legal advice from an independent professional advisor.