It is not uncommon to have a living trust to protect assets from being held up in probate, but that trust should be paired with a pour-over will. Even if you don’t have a lot of assets, a pour-over will can ensure that all of your assets end up in your revocable trust as you intended.
What is a Pour-Over Will?
When you set up a living trust, either revocable or irrevocable, that trust only includes the assets moved to it before your death. However, when the same trust is paired with a pour-over will, you can have your remaining assets moved to the trust upon your death. The assets are transferred (“poured over”) into the trust so that they will be distributed as you intended.
How Does a Pour-Over Will Work?
If you have property that was not transferred to your trust before your death, that property most likely will have to go through probate in New Mexico. Without a pour-over will, the property will be distributed to your heirs under New Mexico intestacy law rather than as you directed in your trust agreement.
A pour-over will provides that any property not already a part of your trust will be added to your trust after you pass away. This avoids intestacy issues and also makes sure that your trust handles all of your assets, not just those that were added to the trust initially.
Types of Trusts Paired With a Pour-Over Will
A pour-over will works alongside any living trust, either revocable or irrevocable. A revocable living trust holds assets for your beneficiaries to protect them from the probate process, but you are still able to control those assets. You are able to move them into or out of the trust, as well as change beneficiaries. When you pass on, the remainder of your assets are automatically rolled into the trust with a pour over will.
By contrast, an irrevocable life insurance trusts cannot be changed once established. You cannot change the terms, the beneficiaries, or access the funds in the trust. However, you can still use a pour-over will to have the remainder of your assets transferred to the trust to be distributed as noted in the trust.
Don’t Fall for DIY Pour-Over Wills Online – Work With One of Our Experienced Attorneys
You should seek legal advice before drafting any legal document, especially when it comes to estate planning. There are a lot of DIY sites offering free templates for drafting your own will, but because the will is paired with a trust, you really need an experienced estate planning attorney to assist you.
Contact us today to learn more about how our attorneys determine the right estate planning tools for you.