What is a Pourover Will?
In general, everything that has a title (such as real estate or a car) or a name attached to it (such as a bank account or brokerage account) must be titled in the name of a trust to be included in a trust. For this reason, it is the customary practice for an attorney who drafts a trust to also write a Pourover Will. Basically, the Pourover Will says that anything I have which is not in my trust should be given over to my trust for distribution under the terms of my trust when I die.
Drawbacks of a Pourover Will
The downside of a Pourover Will is that in general property which has a title or name associated with it and which is not in the name of the trust will have to be probated (go through the Probate Court) under the Pourover Will. For example, Granddad has a trust that leaves everything to his children and grandchildren. His house and his stock brokerage accounts are titled in the name of his trust. When he dies those assets pass under his trust without Probate. However, suppose Granddad also owns a big plot of land in the country that he never put in the trust. That real estate would have to be probated under the Pourover Will and then turned over to his Trust. Then his successor trustee would sell the land and distribute the assets according to the Trust.
In a sense the Pourover Will is a less than 100% satisfactory plan to take care of the failure to title all things with a title in the name of the Trust. The Pourover Will ensures that items left out of a Trust will be distributed according to its terms, but at the expense of hiring a lawyer for a Nevada Probate proceeding.
BUT Nevada amended the law in 2011 to make a Pourover Will more advantageous. If you have a Trust and a Pourover Will and you have any amount of assets that have to go through probate because they have a title and were not put into the trust, the assets passing under the Pourover Will can be probated in the simplest cheapest probate proceeding called Set-Aside Without Administration.
When A Pourover Will May Be Necessary
A pourover will can also be necessary even when everything was done right. For example, suppose a person with a trust is killed in a car wreck and there is a legitimate wrongful death claim (we handle these, see our wrongful death page on our personal injury website). Part of the wrongful death claim would be owned by the dead person's estate. In this case the pourover will would transfer that claim to the trust thru the probate process.
Another example of a pourover will having to be probated when all of the estate planning was done right would be if the person who dies receives some money after death. For example, the person's uncle predeceased him, and left him $40,000, but before the payment was made from the uncle's estate, the payee person died. Now that $40,000 would belong to his estate and it would take a probate to get that money distributed into the trust and according to the trust terms. Or there is a class action lawsuit and $15,000 is awarded to person who has already died.
When our firm writes a trust we include a Pourover Will without additional charge. Contact us to start your estate planning today.