A California Living Trust is created during a person’s lifetime. Any assets in a living trust does not need to be probated.
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A pourover will is a testamentary device wherein the testator of a will creates a trust, and decrees in their will that the property in his or her estate at the time of his or her death shall be distributed to the Trustee of the trust.
Valid Pourover Will
A pourover will is a valid California Will that includes a trust provision. These pourover wills allows the assets in the decedent’s estate to “pour over” into a trust. This type of trust is most useful, should the decedent not have transferred assets prior to their death. The primary distribution of assets through a pour-over will is to the living trust, not to the beneficiaries of the estate. The result is that the assets that should have been transferred to the trust before the decedent’s death will be transferred to the trust after the death and then distributed in accordance with the provisions of the living trust. The main drawback is that if those assets total more than $150,000, the will must be probated for any transfers to the trust.
How a Pourover Will Works
Instead of governing the distribution of all your property, a pourover will simply states that any assets that have not been funded into your revocable living trust should go there when you die. It effectively names your trust as beneficiary of any property it does not already hold, and that does not pass directly to a living beneficiary through some other means, such as a beneficiary designation on a life insurance policy or a retirement account.
Pour-Over Wills Require Probate
One of the beauties of living trusts is that they avoid probate of the property with which they’ve been funded. Unfortunately, any of your property that isn’t funded into your trust before you die will require probate, even if it’s directed to your trust via a pourover will.
If You Don’t Have a Pourover Will
Your property will pass to your heirs according to state law if you neglect to fund it into your trust, don’t create a pourover will and don’t have any other will in place directing where those assets should go. These is called “intestate succession.”
This means that if you forget to fund your new vacation home into your trust, and you don’t have a pour-over will or any other type of will that directs the property to someone specific, that home might go to the son you’ve been estranged from for years if you’re not married, simply because of your blood tie to him.
Your PourOver Will Should Be a Safety Net
Ideally, you won’t need your pourover will. You’ll know it’s there in a worst case scenario, but it won’t have to go into effect because all your property has been transferred into your living trust at the time of your death.
Make it a point to sit down with your trust documents at least once a year. Make sure you haven’t acquired any new property over the last 12 months that should be funded into the trust. If you want a particular beneficiary to receive that new asset in the event of your death, you can add this provision to your trust agreement. Revocable living trusts can be changed at any point during your lifetime as long as you’re mentally competent.
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