What are pour-over wills?

On Behalf of | Oct 20, 2023 | Estate Planning

However careful you are when estate planning, there is always the possibility that you may forget something.

Most people review their estate plan every couple of years, and a lot can change in that length of time. Remember, your estate plan should ideally account for every last item you own on the day you die and not include anything you have ceased to possess or have accounted for elsewhere (such as something with a beneficiary designation). A pour-over will provides a relatively simple way of handling this otherwise overwhelming accounting task.

First, you must set up a revocable living trust

This trust will act as the catch-all for assets you have not dealt with elsewhere. When you create it, you can define what you would like to happen to the assets it holds as well as who will manage it. For example, you could name your brother as the trustee to manage it and stipulate that they will ensure all the assets contained are shared equally between your children after your death. Or, if your children are younger, you could have your brother manage it until the last of your children turns 18, and only then share the contents out. There are plenty of options worth considering.

Then you’ll create a pour-over will saying that any unaccounted-for assets will pass to the trust. A pour-over will is no substitute for regularly updating your estate plan or updating it when major changes occur, such as buying a new property, marrying or divorcing or gaining or losing an heir. Yet, it can provide a helpful backup for the small changes you might overlook before you’ve made your latest update.