A Brief Introduction About the Pour Over Will Agreement
A pour over will definition is that it is an official document which states that all assets which have not been included in a revocable living trust should go to it when the grantor or creator of the trust dies. This will is used along with a trust-based estate plan. There is a possibility that the grantor of the revocable living trust has not included all assets in it.
The trust becomes the beneficiary of any property which has erroneously not been included in it, such as the beneficiary of a life insurance policy or a retirement account. It could be a lifesaver for someone who has neglected to transfer any property or other assets throughout his or her life and has no other will by which the beneficiaries can receive that excluded property. In order to avoid probate, all property must be included in the pour over will before the death of the grantor. If the value of the probate assets exceeds $150,000, then pour over will in California will needs to be probated.
Who Takes the Pour Over Will Agreement? – People Involved
A pour over will is taken by individuals who want to ensure that any property inadvertently excluded from their revocable living trust by making the trust the beneficiary for such properties. The grantor or creator of the will and the beneficiaries are the people involved in the will. This will ensure that the beneficiaries are not deprived of any asset or property due to them.
Purpose of the Pour Over Will Agreement – Why Do You Need It?
A pour over will is an official document that is created by the grantor to ensure that properties or assets which are not included in the revocable living trust pass to the beneficiaries smoothly.
The property or assets owned by the testator of the will might have been excluded from the revocable living trust due to oversight. This will protect the beneficiaries from losing out on a property which the testator wanted to bequeath to them.
The will clearly state that assets not funded into the revocable living trust should go the trust in the event of your death. So all assets that are not transferred to your beneficiary directly or assets not part of your trust will be included in the trust. It does not determine the distribution of the grantor’s entire property.
Properties that are included in your trust through a pour over will have to be probated if the property has not been included before your death.
The reason why having a pour over will as opposed to the distribution of assets without a will or dying intestate is that the laws of intestate succession will take over, which varies from state to state. The disadvantage of this is that in the event of not having a pour over will, your assets will devolve to a child you have been estranged from in the event you have not remarried as he or she is related to you in blood.
Contents of the Pour Over Will Agreement – Inclusions
A pour over will is a legal document between the grantor or testator and the beneficiary, which states that all assets not included in the revocable living trust will pass on to the trust. The trust becomes the beneficiary. The will include the name of the testator or grantor as well as the beneficiary, which is the trust.
The will should include:
- The date of the will: The date the will is being made should be included
- Parties to the will: The testator and the revocable living trust should be named in the agreement and the relationship between the two
- Specific location: The state where the will is being drafted should be stated as the laws of the state will apply in case of any dispute
- Funeral expenses: The will would include the payment of the funeral expenses of the testator or grantor along with the applicable taxes.
- Asset distribution: The details of all the assets being bequeathed to the beneficiaries should be mentioned and the shares that will accrue to each
- Residual property: The remainder of all assets will devolve to the trustee of the revocable living trust
- Minor: In case the beneficiary is a minor, the asset or property could be distributed to the minor or could be used education and maintenance of the minor or the same could be held as a separate fund
- Co-executors of the will: In the event that the executors appointed initially fail to qualify or qualifies and dies, then the other named executor shall ensure fair distribution of the assets in the will
- Power to executors: The executors are granted the power to sell the assets as required for cash or credit and to exercise all powers as absolute owners of the property.
How to Draft the Pour Over Will Agreement?
Points to Consider While Preparing the Agreement
While drafting a pour over will the following points need to be considered:
- Parties to the agreement: The names of the parties to the agreement and the relationship shared between them
- Executors to the agreement: The name or names of the executors if there are co-executors to the agreement. It should be mentioned that the executors are not required to provide any bond or surety. In the event, the executor originally appointed dies or is unable to discharge the duties, and the other executor will perform the duties
- Rights and duties of the executors: The rights and duties of the executors with regard to the distribution of the property needs to be mentioned. The executors are given absolute right to dispose of the property as original owners of the property would do so
- Nature of assets: The nature of assets to be included in the will need to be mentioned, whether they are real or personal
- Funeral expenses of the testator: The will should have the funds which are to be allocated for performing the last rites of the testator
- Method of asset distribution: The method of distribution of assets to be mentioned in the will and the share to each beneficiary
- Minor beneficiary: Where the beneficiary is a minor, the executors will decide whether the minor will receive the assets or the funds will be used for the minor’s education and maintenance
Negotiation Strategy
The testator of a pour over will can negotiate with the beneficiaries and ensure that the distribution of the assets is done to avoid any future disputes between them. Equal distribution among beneficiaries does not work at all times, and it is necessary to discuss with them what the best distribution method would be. Though the ultimate decision rests with the testator, a negotiation would minimize disputes.
Benefits & Drawbacks of the Pour Over Will Agreement
The benefits of having a pour over will are as follows:
- The specific distribution of assets: In the absence of a pour over will, the laws of intestate succession would come into force. The distribution of assets would not be according to your wishes, and a beneficiary you might want to exclude would be entitled to a share of the assets. This will ensures only those beneficiaries you want to bequeath your assets to get it.
- Disposal through executors: The executors appointed by you would have the full authority to dispose of the assets having the same rights as owners of the property. They would ensure that your wishes are fulfilled.
- Simplicity: This will ensure the transfer of property to the trust. After everything transfers to the trust, the job of the executor and trustee becomes easier as the trust is a single document
- Completeness: Usually this kind of a will ensures that while your primary assets are transferred directly to the trust, the small percentage that has not been included in the trust gets transferred
The drawbacks of having a pour over will are mentioned hereunder:
- Probate of will: While the revocable living trust will not be probated, they will have to be probated. So before the assets can be transferred to the trust, they will need to be probated, which could take months. A pour over will in Florida be probated, unlike a trust.
What Happens in Case of Violation?
A pour over will is meant to include the assets that the testator is unable to include in the revocable living trust.
In the absence of this will, the assets which are not part of the trust will devolve to the beneficiary according to the succession act.
The will is made in accordance with the laws of the state relating to the devolution of assets. If it is found that any clause in the will is a direct violation of the laws of the state, then the will be null and void. The laws of succession will come into effect, and the distribution of assets will be against the wishes of the testator, which would defeat the purpose of having this will.
The beneficiaries mentioned in the will would not get the shares they are entitled to as the assets would be distributed(1) to the direct blood relatives of the testator.
Being a will, it is subject to probate, and if the violation is detected during the probate, then the process of probate will be further prolonged, leading to delay in asset distribution.
Therefore the testator should ensure that the will does not violate any state law to ensure that his or her last wishes are carried out without any hassles. This would benefit both the testator and the beneficiary.
A pour over will is a legal document that is used along with a revocable living trust. The purpose of this will is to ensure that any asset which has inadvertently been excluded from the revocable living trust can be included in the trust.
As per the will, the trust is the beneficiary for all assets that are not funded in the trust. Properties that are part of the trust will not be probated, but this needs to be done either directly or through the pour over will before the death of the testator.
Having this will ensures that your property devolves to the intended beneficiaries who would otherwise be deprived in case of intestate succession. A pour over will in pdf makes it more secure.
Though they will facilitate the transfer of assets seamlessly into the trust, being a will needs to be probated. The probate process could take several months, thereby delaying the process of distribution.