Pourover WillsA 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 a 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 $150,000, a probate is required. If the amount does not exceed $150,000, 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 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.