A good estate plan usually employs several strategies to make sure that your instructions are followed, as well as your family’s protection.
Two of the tools are the pour-over will and the revocable trust and these two work hand in hand in order to give you flexibility and protection for your property. But how do you decide when to use them in combination?
This guide outlines the functions of each and when using them together is most effective.
What Is a Pour-Over Will?
A pour-over will is actually a type of will that is meant to “capture” any assets that were not moved into the trust before your death.
When you die, these assets are transferred or ‘poured into’ the revocable trust so that they are administered as per the provisions of the trust document.
Although it doesn’t thwart probate, a pour-over will offer a contingency plan to ensure that the assets are not disbursed pursuant to the state’s laws of intestate succession.
What Is a Revocable Trust?
A revocable trust is a legal arrangement whereby your assets are managed during your lifetime and how they should be dealt with at your demise.
While a will lets you save money and avoid probate, a revocable trust is private as well as more convenient.
This is because the trust is revocable and therefore you can change the terms of the trust or indeed end it as you feel fit while you still have control over your estate.
How a Pour-Over Will and Revocable Trust Complement Each Other
A pour-over will and a revocable trust are two of the most useful instruments in estate planning. The revocable trust is used as the primary means of managing the assets and the pour-over provision will help to catch anything that has been left out by the revocable trust.
For instance, if you buy a property after reaching your fifties and never transfer it into the trust, the pour-over will transfer it to the trust after your death. This means that all your asset portfolios are well managed to ensure that they are disbursed to their rightful owners as per your wishes.
When is a Pour-Over Will with a Revocable Trust Helpful?
Using a pour-over will alongside a revocable trust is particularly advantageous in the following scenarios:
Incomplete Asset Transfer
In case you have not had the chance to place all your property into the trust, the pour-over will help put them into it.
New Acquisitions
Other assets that the trust acquires after its formation and before the pour-over takes effect can be retrieved.
Simplifying Probate
While the assets in the pour-over have to go through probate, this is made easier because the assets end up in the trust.
Complex Estates
Together, the two ensure a vigorous safety net especially if your estate comprises a wide range of properties.
Benefit of a Pour-Over Will with a Revocable Trust
This combination offers several benefits, including:
Comprehensive Coverage
Make sure that no asset is left out of your estate plan.
Streamlined Distribution
Brings asset allocation under the terms of the trust in a centralized manner.
Privacy Protection
Property within the trust does not go through probate, they also retain privacy.
Flexibility
It is flexible that you may wish to alter from your current form of trust.
Possible Negative Implications and Realization
While effective, this setup is not without its challenges:
Probate for Pour-Over Assets
In this case, the pour-over only allows those assets that have gone through probate to be transferred to the trust.
Maintenance
Frequent changes to your estate plan are important to prevent these gaps.
Initial Complexity
Establishing both a pour-over will and a revocable trust can be done, but this must be done with much consideration and cooperation.
Instructions on Establishing a Pour-Over Will and Revocable Trust
To maximize the benefits of this arrangement:
Consult an Attorney
Consult an estate planning attorney to help prepare and implement the documents.
Fund the Trust
Avoid using the pour-over will as much as possible and instead transfer assets to the trust during your lifetime.
Regular Updates
It is crucial to review your estate plan from time to time in order to make sure it is up to date with your assets and your wishes.
Common Misconceptions
It’s important to clear up common myths about pour-over wills and revocable trusts:
“A Pour-Over Will Eliminates Probate”
As it will be noticed it helps to reduce the process of probate but this is not completely done away with for other assets that are not under the trust.
“Trust Funding Is Unnecessary”
This means that assets can be given to the trust only in your lifetime in order to benefit from the trust.
Ways That Our Attorneys Can Assist You
At Max Hyde Law Firm, we appreciate that people find the legal process anxiety-provoking and arduous.
This is your chance to get the help of our experienced attorneys who will explain your rights and responsibilities and stand up for you.
Expert Legal Guidance
Our team of successful attorneys provides the most professional solutions to your problem.
Whether you are involved in a family law case have a personal injury case, or even require legal advice on business or estate matters, our advice will be straightforward and will focus on what you need to do to move forward.
Private Client Law
No two cases are the same so we have the opportunity to discuss your circumstances and what you would like to achieve.
We consult with you on tailored plans and actions meant to ensure the desired result. Whether it’s the process of reaching a deal or defending you in court, we will be your allies through it all.
Let us guide you through the legal complexities involved in pour-over will in recoverable trust in South Carolina. Contact us at (864) 804-6330 to schedule a free consultation and take the next steps with confidence, knowing your interests are protected.
