What is it?
A pourover will is like any other will, except that it has only one primary
beneficiary, which is the testator's living trust. The pourover will
transfers assets to the trust to ensure that these assets will be subject to
the distribution plan in the trust and will also receive the benefit of
trust's tax reduction provisions.
Why is it called a pourover will?
Because it "pours" assets into the trust.
What assets are controlled by the
pourover will? The will controls
only probate assets, i.e., assets that are not in a trust, not in joint
tenancy, not being inherited by a surviving spouse, and not in an IRA or 401K.
Probate assets are usually titled in the name of the decedent only.
However, probate assets can also be found in situations in which a mistake has
been made, such as failing to name beneficiaries for an IRA or 401K. For
more information on probate, click here: Probate
Does a pourover will have to go through
probate? That depends on the value
of the probate assets that are controlled by the will. If the probate assets add
to up to more than $100,000, a probate is required. If the amount does
not exceed $100,000, the assets can be transferred to the trust by using
declarations as authorized by California Probate Code section 13100.
What else does the pourover will do
beside transfer assets to the trust? It
also distributes tangible personal property, such as furniture, jewelry,
clothing, etc., to the testator's beneficiaries. It nominates executors
and guardians for the testator's minor children. The pourover will also
revokes prior wills. The pourover will might include other provisions,
such as tax allocation clauses.
What would happen if someone died with a
living trust, but without a pourover will?
The result might be two distribution
plans, one for the assets in the trust, and another distribution plan for the
probate assets. In some cases the two distribution plans might be alike
because the beneficiaries of the trust are the same people who would inherit
if the decedent did not have an estate plan. (See the
intestate succession page for a discussion of
this subject.) However, if the beneficiaries are not the same as the
heirs of the decedent, the assets would be distributed to two different groups
of people. For example, if the trust left all of its assets to
charitable organizations, and the decedent did not have a pourover will, any
probate assets would not go to the charities, but would be distributed to the
testator's nearest relatives.
Why would the trustors not transfer their
assets to the living trust? There are
several ways that this can happen, such as negligence, mistake, and
procrastination. Sometimes lack of understanding about how a trust works
contributes to this problem. Confusion might also be a factor,
particularly when real property is refinanced. The lender often requires
that the property be taken out of the trust when it is refinanced, but the
lender probably will not encourage the owner of the property to transfer it
back to the trust after the refinancing.
Is there a safety net to avoid these
problems? A 1993 California case,
Estate of Heggstad, 16 CA4th 943, 20 CR2d 433, provides exceptions that can
avoid probate in certain circumstances. For example, if the trust
includes a list of assets and language that constitutes a conveyance, or if
the trustor(s) sign an agreement stating that they are assigning all of their
assets to their trust, a petition can be filed with the court asking that all
of the assets be declared to be trust assets. This procedure, known as a
Heggstad petition, avoids a full probate of the assets that were not
transferred to the trust by changing their titles.
