In today's video, we discuss Pour Over Wills and why you might need one in your estate plan.
- Today, we're going to discuss pour-over wills. Welcome to 2 Minute Tuesday, where I attempt to discuss an estate planning topic in two minutes or less. Now, before we get started, if you're enjoying these videos every Tuesday, can you please do me a huge favor and hit the Subscribe button in the right hand corner below. I would really appreciate it.
The other day, I got a call from somebody asking why their relatives had a pour-over will and not a last will and testament. Well, without knowing anything about their relatives, I attempted to answer their question. And at the same time, I thought this would be a great topic for 2 Minute Tuesday.
So why do some people have a last will and testament, and some people have a pour-over will? Somebody usually has a pour-over will when they have a revocable living trust. The pour-over will acts as a kind of a catch-all, so if you have a revocable living trust, one of the main reasons is probably to avoid probate. No one wants to put their families through the long and sometimes emotional process of probate and having to go down to the courthouse.
However, in order for a revocable living trust to work properly, and avoid probate, all of your assets must be titled in the name of the trust. So, a pour-over will acts as kind of a catch-all in the event you forget to place an asset in the name of the trust.
An example that I always give is let's say you go out and you buy a brand new car. The dealer tells you he'll tag it for you. And you think, well, that's a great idea. And you make sure to tell the dealer to tag it in the name of your trust. Well, the dealer sends somebody out there to title the car, and it gets titled in your name and not in the name of the revocable living trust. Then you pass away before you discover the car is titled incorrectly. Well, in that scenario, we would use the pour-over will to pour the asset, or the car in this case, back into the trust, for distribution according to the terms of the trust. The car will still need to be probated but at least you have the peace of mind knowing it'll be distributed according to the terms of your trust.
And it does not have to be just a car, we've had some people sell the home that we put into trust for them and then they go out and buy a brand new house, and they forget to title the new house in the name of their revocable living trust. In that case, we have to probate the house.
So our goal is for all of our trust clients never to need probate. But just in case, we have the pour-over will as a safety net.
Well, that's all for today. Not sure if I made it under the two minutes. But if you enjoyed this video, then please, like it below, and please, hit the subscribe button below so you'll get our new videos every Tuesday. We appreciate you watching, and I'll see you next time, thanks again.