Trusts are a common estate planning tool to avoid a lengthy probate process. Assets must be specifically placed into a trust. What happens when there are remaining assets not included in a trust when someone passes away? Here’s why you should include pour-over wills in trust-based estate plans.
What Is a Pour-Over Will?
Think of pour-over wills as an all encompassing default. It basically states that any assets not already included in your trust should be placed into the trust when you die. Your trust is essentially the beneficiary of your assets per this will. This prevents assets from going directly to any beneficiaries simply because you forgot to include them.
Estate planning attorneys recommend that you update your estate plan every year or after significant changes in your life. Even if you are diligent about doing this, changes can occur in between those updates. A pour-over is a nice safeguard to have in place.
Probate and Pour-over Wills
It’s important to note that although your trust may bypass the probate process, any assets addressed by a pour-over will do not. Since new assets are not already in the trust at the time of your death, they must still go through probate. The probate process can take up to several months, during which time potential debtors may submit their claims. Ultimately, your remaining assets will be placed into your trust once everything is settled.
What Happens When No Pour-Over Will Exists
If you do not have a pour-over will, any assets not included in your trust will follow the normal probate process. In the state of Massachusetts, assets pass by intestate succession. Possible heirs depend on whether you are married, have children, have living parents, etc. For example, if you have children but no spouse, your children inherit all assets. If you have a spouse but no children and no living parents, your spouse will be the sole beneficiary. Again, this applies only to assets not included in a trust, not specifically covered by a will, and in absence of a pour-over will.
Help with Pour-Over Wills in Trust-Based Estate Plans
We can’t stress enough the importance of pour-over wills in trust-based estate plans. If you do not already have this in place, contact our team today. Don’t risk your assets going into the wrong hands. We can also review your overall estate plan to make sure you have the proper measures in place to protect your assets for the benefit of your heirs.