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What does a pour-over will accomplish for a testator’s estate?

On Behalf of | Jun 19, 2023 | Wills

Every adult should attempt to create an estate plan that works for their situation and goals, whatever they may be. Some people have a spouse or a child with special needs who will require ongoing support. Others may want to leave resources for charity. There are a variety of estate planning tools that can help people achieve numerous goals regarding the distribution of their property when they die, their care in the event of incapacity and the support available for their dependent family members.

One popular tool often integrated into more complex estate plans is the pour-over will. What purpose do these unique estate planning documents serve?

Pour-over wills help fund trusts

A trust is a very powerful estate planning tool that can help people avoid taxes, protect their property from collection activity and make qualifying for Medicaid later in life a bit easier. People may start a trust for their own protection as they age or to retain control over the way people use their assets after they die. There are many types of trusts, making them useful for people in many situations.

However, funding a trust often proves challenging, especially for middle-class families. People may not have enough resources on hand to set aside property worth hundreds of thousands of dollars in a trust. A pour-over will allows someone to arrange for the transfer of specific assets to a trust at the time of their death, which is an effective way to continue controlling property while alive while still using it to fund a trust.

Testators will establish the trust ahead of time and execute the will to prepare for the transfer of assets. The actual ownership of that property doesn’t transfer to the trust until after their death. A trust funded by a pour-over will won’t necessarily help people qualify for state benefits or protect assets from creditor claims when someone is still alive, but they can keep certain assets out of probate court after an individual dies.

Integrating the right kinds of documents into an estate plan will help individuals achieve their own goals in the most effective way possible given their circumstances.