A couple that I worked with this year was surprised to learn that they need a Will to go along with their Trust based Estate Plan.
This couple came to me with a Will based Estate Plan that they had for years. These was nothing wrong with their plan when it was setup. However, as time passes, circumstances change as to your Estate Planning needs.
After learning about their current circumstances, we all agreed that a Trust based Estate Plan was right for them.
When they came in for their signing cermony, we reviewed their Trust and other documents. The couple was surprised that switching form a Will based to Trust based Estate Plan would require them to still have Will.
REASON #1 - You pass away before your Trust is fully funded.
This can happed if you pass away before you have time to fund your Trust, or if there is a mistake/oversight and an asset is properly funded into your Trust.
In this case, your Pour-Over Will directs that you are leaving your probate assets (those not funded into your Trust) to your Trust. Once the Probate is complete, all of your assets are then handled pursuant to the terms of your Trust.
REASON #2 - Your Trust is invalid for some reason.
It doesn't happen often, but there is always a change that your Trust can be found to be invalid.
It could be an error in executing your Trust, or due to an heir challenging your Trust in Court.
No matter the reason, if your Trust is invalid that you assets will need to go through Probate. In this case, your Pour-Over Will directs your Personal Representative to setup a new Trust with the same goals, heirs and wishes as your invalid Trust. Then all of your assets are left to the new Trust and your assets will go where you wanted them to go in the first place.
As you've heard me say in the past, a goal of having a Trust is to avoid Probate. That means that our goal is to never use your Pour-Over Will.
Despite our goal, we never want to put all of our eggs in one basket and having the Pour-Over Will is an insurance policy for your Estate Plan.
If you have any questions, or want to learn more about Estate Planning, please schedule a complimentary Estate Planning Strategy Session.
Father, husband, entrepreneur, and owner of a trivia filled brain. I help families and individuals plan for the unexpected and end of life. Schedule a Complimentary Strategy Session to chat with me, get answers to your questions, and find out about your Estate Plan options.
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