Here’s what you need to know about fixed annuities, their drawbacks and who should consider buying them.
You need to understand what a pour-over will is. Here’s what to know.
What is a pour-over will?
A pour-over will is designed for people who already have set up trusts that will transfer their assets to the trusts upon their death. It ensures that all the assets, including the assets that were not specified in the trust, are automatically transferred to the trust. The pour-over will offers an additional level of protection, ensuring that items obtained after the trust and will are created are automatically included in the estate plan.
The advantage of a pour-over will is its simplicity. The will makes the intentions of the person planning his or her estate clear, and it makes administering the trust easier for the executor and trustee.
Additionally, establishing a trust offers additional privacy, as the details of trusts are private, whereas the details of wills are a matter of public record.
The disadvantage of pour-over wills is that they must go through probate, which means the property could be held up in probate court for months before it can be distributed by the trust.
Therefore, many estate planning attorneys recommend that people name the beneficiaries of major assets in their trusts and limit the pour-over will to items of minor value.
Pour-over will example
Shirley has established a trust. The trust specifies that her home, savings, artwork and car will be transferred immediately to the trust at the time of her death. Shirley also has named the beneficiaries for each of these items.
However, since establishing the trust, Shirley has purchased a second property, and she doesn’t want the second home to be held up in probate when she dies. She updates her trust to name her daughter as the beneficiary of the second home.
She also creates a pour-over will that specifies all minor belongings be transferred to her trust. Based on how she has created her estate, only Shirley’s minor belongings will have to go through probate before being distributed to her family.
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