A pour-over will is a testamentary device most commonly used in combination with a trust that has been established during a person’s lifetime. The will usually specifies that, when the person dies, any assets that were accidentally or intentionally not placed in the trust during the person's lifetime will be “poured over” into the trust. The assets are then allocated according to the trust's instructions. Essentially, a pour-over will helps ensure that all of a person's assets are put into a trust before they are distributed to trust beneficiaries.
A pour-over will is particularly useful in circumstances where a person does not wish to have all of her assets placed in a trust during her lifetime. This may be preferable for a number of different reasons. Convenience is one purpose for establishing a pour-over will. For example, buying, selling, and insuring a car can be complicated in some jurisdictions if the car is held as a trust asset. Even if the car is not captured by the trust during the owner’s lifetime, the will makes certain that it is considered a trust asset when the owner dies.
In other cases, tax reasons make it desirable to avoid transferring assets to a trust during a person’s lifetime. Transferring real estate into a trust may, for instance, generate a property tax re-assessment. A pour-over will is also useful for capturing situations where a person fails to place recently obtained assets into his or her trust. Even if ownership of the assets have not been formally transferred to the trust, they will still become part of the trust when the owner dies.
A pour-over will can also be used to make certain that any prior wills a person has created are revoked. This step ensures that there are no conflicts between distribution of assets outlined in a previous will and the terms of the deceased’s trust. Additionally, many people use pour-over wills to establish who will become a guardian for their minor children. The trust typically contains more specifics on how the deceased’s assets will be allocated for the care of his or her minor children.
Pour-over wills are subject to probate, a process in which a will is legally declared valid by a probate court. During the probate process, the pour-over clause in the will is authenticated and applied. The deceased’s assets are then carried over to the previously established trust where they are distributed according to the deceased’s instructions in the trust.
