By the Estate Planning Attorneys at Smith & Garg, LLC, serving The Woodlands, Spring, Houston, Conroe, Humble, Kingwood, Tomball, Cypress, Huntsville, Westchase, Southwest, Sugar Land, West Oaks, Alief, Memorial, River Oaks, Stafford, Katy, and Missouri City.

POUR OVER WILLS

A Pour-Over Will is a special type of Will that is often used in conjunction with a Trust. As its name suggests, a Pour-Over Will allocates any property not otherwise disposed of by your estate plan to a Trust already in existence. It is often used as a safeguard if, for example, assets exist at your death that were not transferred during your lifetime into a Living Trust:  the Pour-Over Will serves as a mechanism to “pour” those assets into the Trust so that they will be distributed according to the terms of the Trust instrument.

Thus, as mentioned, Pour-Over Wills are used hand-in-hand with Trusts. A Trust is no more than a legal relationship in which one person or trust company (a “trustee”) holds property for the benefit of himself or another person (a “beneficiary”). The person creating the Trust is called the “trustor,” “grantor,” or “settlor.” The trustee receives legal title to the property transferred into the Trust, and manages it according to the grantor’s wishes. (Many times, particularly in the case of Living Trusts, the grantor, trustee, and at least the initial beneficiary are the same person.)

Generally, a Living Trust is created for the purpose of handling the grantor’s assets both during life, during his or her incapacity, and at his or her death. Some items of property, however, may be intentionally or unintentionally left out of the trust, or be inappropriate as trust property. In this instance, a “Pour-Over Will” may be used as a backstop, to filter all “other,” non-trust property through the provisions of the trust at the grantor’s death, and ensure the grantor’s overall asset transfer goals are met.

For a Living Trust to be effective in “avoiding probate,” all of the decedent’s property must be transferred into the Trust on an ongoing basis throughout his or her lifetime. After moving certain assets into the Trust at the time of its creation (for example, you may transfer your home by special warranty deed during the same ceremony as your Trust execution), it is very easy to forget to transfer other assets, such as bank accounts, after the Trust has been originally funded. Additionally, those creating a trust will very often will acquire new collections, vehicles, or other assets in the months or years after their Trust is executed, and will not keep up with transferring each and every appropriate asset into their Trust. If no Pour-Over Will is used, this “excess,” non-trust property will pass to their heirs under Texas’ default distribution scheme, which will require a proceeding in the probate court to accomplish. Had a Pour-Over Will been utilized, any property outside the trust at the time of the grantor’s death would have been effectively left to the Trust, rather than the heirs—and therefore would be distributed as the grantor had originally intended.

The experienced Wills & Trusts attorneys at Smith & Garg are available to counsel you on the use and appropriateness of Pour Over-Wills, whether or not you currently have a Trust in existence. We will help you determine how such a document will fit into your overall estate plan, and how it will further your ultimate testamentary wishes.

Call Smith and Garg today at 281.210.0010 or complete our Contact Form and let us assist you with your wills and trusts.