Understanding Pour-Over Wills
A last will and testament, commonly referred to as just a “will,” is probably the primary document that most people associate with the act of designating who gets which of their assets once they are gone from this life. Wills, however, are required by California law to go through a legal process known as probate, during which a court oversees the distribution of the estate to creditors and ultimately to beneficiaries.
Probate presents a few problems that can be solved through the creation of a living trust. First, if you create a living trust in which to place your assets in advance of your death, the distribution of these assets to your named beneficiaries will take place outside of probate court. Second, without probate court proceedings, the settling of the estate can take place in a matter of days or weeks rather than months or over a year.
Finally, because there is no court overseeing and supervising everything, there is also no public record, and no one can ever learn of what you did with your estate when you died by simply parsing through court records or even by attending the probate proceedings in the courtroom. The settling of a living trust is thus a private affair unlike the execution of a last will and testament.
One potential pitfall with a living trust, however, is that you may have created it in your 30s, but in the decades before your death, you accumulated additional assets that you forgot to place in the trust. Those assets will have to go through probate proceedings, and if there is no will to account for them, the court will likely decide who gets which of these assets using California’s intestate succession laws. (Intestate refers to dying without a will.)
This problem can be averted through the creation of what is called a pour-over will. A pour-over will is similar to a regular last will and testament except that it has just one beneficiary, so to speak – the living trust you established. Once the pour-over will is probated, your non-trust assets will pass into the living trust to be distributed according to the directions you established in that document.
If you need to create a pour-over will, or review a living trust or other estate planning documents you have already created, and you’re in or around Los Alamitos, California, contact me at the Law Offices of Lawrence H. Nemirow, PC. I am an estate planning and probate attorney with 25-plus years of experience helping individuals and families prepare for the future with comprehensive estate planning.
I proudly advise and serve clients throughout Los Angeles County, Orange County, Huntington Beach, Newport Beach, Cerritos, Santa Ana, Anaheim, and Long Beach.
Wills vs. Trusts
I’ve already addressed the primary differences between a will and a living trust, but some people mistakenly believe that a living trust means handing over your assets to someone else to manage and control. Wrong.
When you place your assets in a living trust – also known as a revocable trust – you retain control over them unless one of two events happens: you become incapacitated or you pass away. In either circumstance, the successor trustee named in your legal document then takes charge of everything.
A living trust is just that, in other words. It is “living” from the moment you create it, and it provides protections for you and your heirs both while you’re alive and after you’re gone.
A will, on the other hand, does not even become enforceable until it is presented to a probate court and accepted as valid. If you have just a will and not a trust, no one will have the designated legal authority to take charge of your financial and other affairs should you become incapacitated (absent a power of attorney that you create).
What a Pour-Over Will Accomplishes
Even if you establish a trust, it is important to have a will in place as well. This is especially important if you need to name a guardian for your minor children. This cannot be done through a trust. A pour-over will is also important to tie up any “loose ends” that may exist in your estate plan when you’re gone.
As mentioned earlier, in the time between you creating your trust and ultimately passing away, you may have accumulated assets that you simply forgot to transfer into the living trust. If you create a pour-over will, those assets will end up in the trust after undergoing the probate process. The court will not be able to use its powers of intestate succession to name beneficiaries.
The forgotten assets will end up in the trust via the pour-over will and then be distributed to beneficiaries.
Creation of a Trust and a Pour-Over Will
Previous California law limited the creation of a living trust to be accomplished prior to, or simultaneous with, the creation of a pour-over will. An amendment to Probate Code Section 6300 in 2018, however, now allows the creation of the living trust to take place within 60 days after the creation of the pour-over will. This amendment corrects some technical difficulties that people sometimes experienced in getting both documents notarized in the correct order of execution.
Duties of the Successor Trustee and the Executor of a Will
Both a living trust and a will designate a person or entity to oversee the distribution of assets after one’s death. A trust names a successor trustee, and a will designates a personal representative.
As already noted, the successor trustee can assume management of the trust’s assets once the original trustee becomes incapacitated or passes away. A personal representative named in a will, however, has no power if the testator of the will becomes incapacitated. The personal representative’s only function is to serve as the executor of the estate when the will is probated.
An executor carries out his or her duties under the supervision of a probate court and must make detailed reports to the court regarding the administration of the will. The successor trustee carries out his or her responsibilities outside of probate supervision. This not only speeds up the entire process, but also affords the trustee more latitude in fulfilling the wishes of the decedent as expressed in the trust.
Estate Planning Guidance You Can Trust
A living trust, backed by a pour-over will, is a vital instrument in comprehensive estate planning. It not only ensures that your loved ones receive what you’ve decided to leave them, but it also does so expeditiously and with as little court – and public – intrusion as possible.
For all of your estate planning needs in and around Los Alamitos, California, contact me at the Law Offices of Lawrence H. Nemirow, PC. I will provide you with compassionate, personalized service so you and your loved ones can enjoy peace of mind going forward in life, knowing that everyone will be cared for and every detail has been properly addressed