Some people prefer to use trusts as their main method of estate planning for various reasons, including the ability to avoid the long delay that probate may cause in distributing assets to beneficiaries. Those who use trusts often transfer titles to the property and assets they wish to distribute through the trust during their lifetimes. This ensures a smooth transition of ownership from the trust creator to the trust.
However, sometimes not all the assets a person wants to leave to the beneficiaries of a trust are transferred while that person is alive. The remaining assets may be left out of the trust and therefore fail to be distributed to the intended beneficiaries, unless there is a will in place that has a provision to transfer the assets automatically upon the trust creator’s death. This is the purpose of a pour over will.
A pour over will is a legal document that satisfies all the legal requirements of a will in Michigan, but that also includes a provision within it that transfers property to a trust that has previously been established. A person does not need both a pour over will and a traditional will. The pour over will is just a traditional will that also includes the pour over provisions.
A person who wishes to have assets transferred through a trust typically forms the trust during his or her lifetime, but the trust does not have to be funded immediately. The trust can be funded at the person’s death through the provisions of a pour over will.
It is important for the trust to be in existence at the time the pour over will goes into effect or the provision will fail. If the property cannot be transferred to the trust as required under the will, and there is no other provision in the will for the distribution of the property, the property can be divided to other heirs. This may not be in accordance with the wishes of the deceased.
Unfortunately, funding a trust using a pour over will can complicate what would otherwise be a simple distribution of trust property to beneficiaries. This is because the pour over will still has to go through probate, and this could take a long time for the process to be completed. The trust has to remain in existence while the will is probated. So, if a person wants to pass on his or her property to beneficiaries using a trust, he or she should transfer the title to as much of that property as possible before death. A pour over will is best viewed as a safety net to take care of any property that inadvertently gets left out of the trust.
Contact an Experienced Estate Planning Attorney
Figuring out the best way to distribute your assets to your future beneficiaries does not have to be a complicated issue. To put together an estate plan that addresses your individual needs and wishes, contact Resnick Law, P.C., to consult experienced estate planning attorneys in Bloomfield Hills and Detroit, Michigan.
(image courtesy of Ilya Yakover)