What is a Pour-Over Will and Does My Florida Estate Need One?
Pour-over wills are not the same thing as a standard last will and testament. They are used to transfer assets into a trust upon your death. A pour-over will must be adequately prepared for it to work as intended. If you want to know more about setting up a trust and a pour-over will, and whether it’s right for your situation, you need to speak with a West Palm Beach estate planning attorney.
How Pour-Over Wills Work
When someone sets up a trust, the common purpose is to utilize the benefits of not having your estate go through probate. A pour-over will helps facilitate that by making sure the process runs smoothly if a portion of the estate does need to go through probate. Think of it as a backup that catches anything you forgot to add into your trust. As the name suggests, the assets in the will that are earmarked for the trust will “pour over” into it during administration. This can be a much easier process than a standard probate administration.
However, if there are no instructions on what to do with these assets in a will, then they would otherwise be subject to Florida’s laws of intestate succession. Anything that is not funded into the trust or not included in the will would need to go through probate. The difference is where the assets go when probate is over. With a pour-over will, they go to the trust while those not included in a will are divided between heirs under Florida’s intestate succession laws.
This means for a pour-over will, the trust would be the beneficiary for any property it doesn’t already hold. This process will apply to assets that don’t already directly pass to another beneficiary, like a life insurance policy.
Importance of Properly Funding the Trust
One of the biggest mistakes people make when trying to set up pour-over wills is not properly funding the trust. Sometimes they don’t fund it at all before they passed away, or they funded it incorrectly. Either way, it can cause the entire state to undergo probate then.
In many cases, estate plans pair a pour-over will with a revocable living trust. The grantor would transfer their assets into the trust before death. The revocable living trust is better suited for smaller estates. Revocable means that grantors can control their assets while still alive. With large estates, irrevocable trusts might be preferable because they can reduce the potential tax burden for the beneficiaries. This is especially true for trusts that might be subject to an estate tax. Irrevocable trusts are managed by trustees and cannot be changed or revoked.
Contact a Florida Estate Planning Attorney
Pour-over wills are just one tool that can be used in Florida estate planning. To find out what’s best for your individual estate, it’s best to speak with an experienced West Palm Beach estate planning attorney. Contact the Law Offices of Larry E. Bray, P.A. today to schedule an initial consultation.