How Does a Pour-Over Will Work?

Executive Summary 

• A pour-over will is an estate planning tool that specifies that any assets left behind by the decedent should be passed into a trust.
• A pour-over will works in tandem with a trust, and individuals can choose to use either a revocable trust or irrevocable trust, depending on their needs.
• Like any other will, a pour-over will must pass through probate to guide how assets should be distributed.
• If you notice discrepancies with a pour-over will or have concerns about how it is being managed, then you should contact a skilled probate litigation attorney as soon as possible.

Introduction 

A pour-over will is a type of will that leaves your assets to the trustee of a trust when you pass away. Pour-over wills can be used to transfer property into a trust you created during your lifetime, known as a living trust or inter vivos (Latin for “while alive”) trust. A pour-over will can also leave your assets to a trust that will be created upon your death, which is called a testamentary trust. Regardless of the type of trust you are using, the pour-over will must indicate which assets will be moved into the trust.

While pour-over wills are still required to go through probate, there are several benefits to using a pour-over will and a trust instead of simply distributing assets through a will. First, a trust allows you to have control over not only who receives what, but also how and when they can use it. For example, parents can direct that a specific portion of the inheritance be used for a child’s education or limit the amount of money they can access each year. While a will simply distributes property to its proper recipient, trusts enable you to leave specific instructions that must be followed.

Using a pour-over will and a trust also helps simplify your estate plan by including all of the substantive distributions in a single document; the trust. Additionally, trusts are not a matter of public record, while wills that go through probate are. With a pour-over will and a trust, the only thing that becomes part of the public record is that your property was left to the trust. This keeps the extent of your estate and the details of your beneficiaries’ inheritance private.

What is a pour-over will?

A pour-over will is an estate planning tool that aligns with a living trust in order to transfer any remaining assets into the trust upon one’s death. The pour-over will specifies that any of the deceased person’s assets not already included in the trust should be moved into the trust.

A pour-over will is often referred to as a “catch-all” since it is designed to “catch” any property or assets not already included in a trust and ensure they are transferred over. The will acts as a safety net to prevent assets from being excluded from an individual’s estate plans.

How does a pour-over will work?

A pour-over will specifies that any property not included in a living trust should be transferred to the trust after they die. To create a pour-over will, an individual must set up a living trust and then create a will specifying their intentions for the remaining property to pass to the trust. Upon the trust creator’s passing, the executor of the estate will be responsible for opening the probate process and transferring the remaining assets to the trust.

If an individual has assets that are not placed in a trust or covered under a will, then these assets will be treated as if there is no will and forced to pass through the process of intestate succession. In this event, the assets will be distributed to potential heirs in alignment with state law, instead of aligned with their true wishes. A pour-over will ensures that these assets are accounted for and placed into the trust when the decedent dies so their wishes can be carried out in alignment with the trust.

The following hypothetical case scenario may illustrate the complexities that could arise in a real-world situation, as well as possible legal mechanisms and outcomes. Still, every case is unique, so you should consult an experienced probate litigation attorney regarding your situation.

Dean, a middle-aged father of two, was diligent in his estate planning and established a comprehensive trust to ensure his assets would be transferred smoothly to his heirs upon his death. His trust included his house, two vehicles, previous investments, and other significant assets.

However, life took an unexpected turn when he won a $5 million lottery, which he transferred into a separate bank account so he could consult a professional as to how to best handle the proceeds. Tragically, though, Dean passed away before he could transfer the funds into his trust.

Fortunately, he had established a pour-over will designed to transfer any assets not included in the trust at the time of his death into the trust posthumously. 

Types of trust associated with pour-over wills

There are two main types of trusts that are often discussed in the same conversation as a pour-over will. Which trust you choose to utilize will be contingent on what makes the most sense for your estate. 

Living trust (Inter vivos trust)

A living trust is an estate planning tool that allows ownership of your assets to be placed in the hands of a trustee, who will then be responsible for holding the assets and distributing assets to beneficiaries. The trust document should specify the terms for who is in line to receive assets and under what timeline. 

A living trust can be either revocable or irrevocable, depending on the creator’s preferences. A revocable trust allows the trust creator to control the assets of the trust until they pass away—a trust creator can make changes to the trust before they pass away. An irrevocable trust is used to reduce the tax burden on beneficiaries but places control into the hands of the trustee and typically cannot be changed by the trust creator without approval from the trustee and all beneficiaries. 

Testamentary trust

A testamentary trust is a trust that is only established after the death of the trustor, or the trust creator. If an individual chooses to use a testamentary trust, they must outline their desired terms of the trust in their will and which assets should be transferred. Because of the level of detail necessary to specify these terms, this may remove the advantage of privacy that usually comes with using a pour-over will.

Although an individual can choose to create a testamentary trust through their will, they are often considered as two separate approaches. A testamentary trust and a pour-over will both accomplish a similar goal: transferring assets into a trust upon a trust creator’s death. 

The main difference is that a pour-over will allows for some assets to be distributed to a trust while its creator is still alive, while a testamentary trust does not establish the trust until the creator’s death.

Benefits of using a pour-over will and trust

A pour-over will offers the benefit of ensuring all of an individual’s assets are accounted for upon their death and can avoid ambiguity in how to manage property. The following are some of the key benefits.

Control over asset distribution

A pour-over will provides an estate with security and assurance that all assets will be distributed according to the decedent’s wishes. A pour-over used in conjunction with a trust allows an individual to separate which assets they maintain ownership of during their lifetime from those they wish to transfer to a trust.

The establishment of a trust then allows the trustor to create clear terms and conditions for the distribution of their assets—these might include waiting until a beneficiary’s 18th birthday or other criteria that need to be met before an heir can receive their inheritance. This can provide additional protection for minors or other vulnerable beneficiaries. 

Simplifying the estate plan

A pour-over will provides a grantor with the ability to clearly specify which assets they want to be transferred to the trust upon their passing. This simplifies the estate plan by offering flexibility and a safety net in the event of various contingencies. A pour-over will minimizes the amount of work needed to address various circumstances that can arise, such as a change in an asset portfolio. 

In our case scenario from above, Dean’s lottery winnings were to be formally transferred into his trust thanks to his pour-over will, which provided a simple, catch-all solution to ensure all of his assets were accounted for. Because the winnings were set to be transferred to his trust, they were able to be distributed in alignment with his wishes and the terms he outlined in his trust for asset management and distribution. 

Addressing privacy concerns

Because a pour-over will’s provisions are generally very simple, it allows for more privacy for the estate and reduces the amount of information to be shared. Typically, in the probate process, a will is considered public record, and the process requires that all interested parties in a will are notified that the probate process is taking place.

However, a trust is not public record. By using a pour-over will that transfers assets into the trust, the majority of information remains confidential. A pour-over will typically only contains simple provisions, while the confidential trust specifies which beneficiaries should receive assets and under what terms..

Pour-over wills in different states

The laws surrounding pour-over wills can differ in various states. For example, California and Texas have similar laws regarding pour-over wills, but there are some nuances between the two.

Probate process with pour-over wills

Although pour-over wills are unique from a standard will, they must still pass through the probate process. Any property included in the trust before the decedent’s death can be distributed directly to the beneficiaries without probate. 

However, any assets covered by the pour-over will that are not yet in the trust must go through the probate process so they can be transferred accordingly. Other assets may be able to avoid probate if they are under the state threshold for simplified probate.

A Heggstad petition may provide another avenue for avoiding probate with a pour-over will. California Probate Code 850, also known as a Heggstad petition, often goes hand-in-hand with pour-over wills, as it is another legal option for transferring assets into a trust if a decedent failed to title property in the name of a trust despite intending to do so.

The executor of an estate can file a Heggstad petition with the court to add property, like real property and financial accounts, to a trust. When a pour-over will exists, it can be used to demonstrate the decedent’s intentions to include the assets in question in the trust. The court may then use the pour-over will as evidence to approve a Heggstad petition and add these assets to the trust without probate. 

If a petition is denied or probate is still necessary, an executor is responsible for reviewing a pour-over will and determining which assets to distribute to the trust in accordance with the decedent’s wishes.

This involves the following steps:

• The named executor must petition the probate court to review the legitimacy of the will and receive an official appointment as the executor 
• The executor must notify all interested parties of the estate of the beginning of probate and their appointment. 
• The estate executor must review the terms of the will and verify which assets are to be transferred into the trust. 

If there are any assets not covered under the pour-over will, then these assets will have to pass through intestate succession to be distributed to legal heirs in accordance with state intestacy law. 

In Dean’s case, the pour-over will allowed his lottery winnings to be easily transferred into his trust, but they still could not bypass the probate process. During this process, Dean’s executor, who he identified in his will, filed the pour-over will with the probate court, which validated the will. 

Then, the executor identified and valued the remaining lottery winnings in the initial bank account. The executor used available funds to pay off any outstanding debts and calculated estate taxes. Finally, after all debts and taxes were settled, the court approved the transfer of the lottery winnings into Dean’s trust.

If Dean had not created a pour-over will, the distribution of his lottery winnings would have been more complicated. Without a will, the assets would be subject to intestate succession laws, which vary by state but generally prioritize close family members.

In Dean’s case, his surviving spouse and children would have been the primary beneficiaries under intestate succession laws. The court would have appointed an administrator to oversee the distribution according to state laws, potentially leading to outcomes that might not align with Dean’s wishes.

Can I contest a pour-over will?

Yes, a pour-over will can be contested like any other will. 

Under California or Texas law, anyone who is regarded as an interested person can contest the validity of a will. The definition of an “interested person” is construed broadly, but can often include:

• The personal representative of the estate
• The trustee of the inter vivos or testamentary trust
• Beneficiaries of the trust
• The estate’s creditors
• The deceased’s legal heirs 

In order to challenge the validity of the will, you will need a legal basis to do so. California law recognizes various types of will contests, which are detailed below.

The Person Making the Will Did Not Have Testamentary Capacity

For a will to be legally binding, the person making it must have what is called “testamentary capacity.” This means they must be “of sound mind,” which is defined as having the mental capacity to appreciate the nature and extent of their property, the people who will inherit their estate, and the fact that they are creating a will. If the deceased did not have the requisite testamentary capacity at the time the will was executed, an interested party could contest the will on these grounds.

The Will Was Improperly Executed

A will can also be challenged as legally invalid if it does not comply with the specifications and formalities required by California or Texas law. These criteria include the following:

• The will must be in writing.
• The will must be signed by the person creating the will in the presence of two witnesses.
• Two witnesses must sign the will in the presence of each other and the person creating the will.

The Will Was Created as a Result of Fraud or Undue Influence

Interested parties may also contest a will that was created as a result of fraud or undue influence. For a fraud claim to succeed, the person contesting the will must be able to show that the deceased made or changed their will because of fraudulent misrepresentations made by a beneficiary. Fraud can also occur at the time the will is executed if a third party represents the will as another document or claims it would not be legally binding.

Similarly, an undue influence claim asserts that the person making the will did not do so of their own free will because another person exercised improper influence over them and manipulated them into changing or making a will. Undue influence generally involves someone the deceased trusted or relied on, such as a relative, close friend, caretaker, or mentor.

To successfully invalidate a will for undue influence, the person contesting the will must be able to show the following:

• The deceased and the influencer had a confidential relationship.
• The influencer is a substantial beneficiary of the estate.
• The influencer played an active role in obtaining the will.

If these three factors are present, the court will presume that undue influence occurred, and the estate will have to prove that there was no undue influence for the will to be found valid.

Pour-over wills vs. other estate planning tools

A pour-over will can be a highly beneficial estate planning option under the right circumstances. Still, it’s important to consider all your options before committing to this option for your estate.

Regular will vs. Pour-over will

A regular will and a pour-over will are both similar in that they allow an individual to specify their wishes for how they would like their assets distributed upon their death. However, a regular will is a standalone document that distributes assets directly to identified beneficiaries, while a pour-over will works in tandem with a trust.

A regular will must detail how assets should be distributed to beneficiaries and under what terms. A pour-over will is a much simpler document, typically only specifying which assets should be transferred to the trust. 

The option of using a pour-over will allows for greater control over assets, placing ownership of some assets in the hands of the trustee and retaining control of the others. A pour-over will also allows for remaining assets to be accounted for, ensuring there is a place for these assets to be included in estate planning.

If assets are not included in a standard will, they must pass through intestate succession during probate, which is the process where assets are distributed to legal heirs based on state intestacy laws. Intestate succession can be a time-consuming process and may result in an instance where state law does not align with a testator’s true wishes. 

Testamentary trust vs. Pour-over will

A testamentary trust is a trust established upon an individual’s death created by their will. This means that all of the assets owned by the decedent are transferred into the trust at the same time. Like a pour-over will, though, the assets outlined in a testamentary trust must go through probate before being transferred into the testamentary trust.

On the other hand, a pour-over will allows you to differentiate between your assets, giving you the ability to separate some of your assets into a trust while maintaining ownership of the others for the remainder of your life. For many people, this added flexibility is beneficial for organizing their asset management.

Each option provides its own benefits. A testamentary trust may allow you to be more specific in your estate planning and set clear terms for how to distribute your assets. A pour-over will may allow you to reduce the amount of time needed to transfer your remaining assets into the trust since the trust is already established and any assets previously in the trust can avoid probate.

Potential drawbacks and limitations of pour-over wills

Although pour-over wills can offer several advantages compared to other estate planning tools, they are not for everyone. It’s important to weigh the potential downsides of using a pour-over will to understand if it’s the right option for you. 

Some of these drawbacks and limitations are:

• Contrary to some people’s beliefs, a pour-over will does not allow you to bypass probate, still requiring time and money in the probate court.
• A pour-over will may offer drawbacks compared to establishing a trust alone since it requires going through probate, which may be more costly or time-consuming. 
• The concept of a will and trust working together may be complex for some people to grasp and can lead to confusion or disputes regarding asset distribution terms or timelines.
• Although a pour-over will is more private than a standard will, a pour-over will still requires going through probate, which is a matter of public record and can release sensitive information. 

If you are considering developing a pour-over will, it’s important to consult an estate planning attorney and a financial advisor so that you can weigh the pros and cons for your estate. If you are the family member of a deceased loved one who established a pour-over will and you believe you are not receiving your rightful inheritance, you should consult a probate litigation attorney regarding your options as soon as possible.

Take control of your estate: Understand the power of a pour-over will

A pour-over will can be a valuable estate planning tool for some, but it can create some conflict and confusion surrounding estate assets. If you would like to contest a pour-over will that you think is legally invalid or affecting your right to an inheritance, you should contact a probate attorney immediately. Overturning a will is a challenging process, even for a simple pour-over will. For this reason, you will have much greater odds of succeeding if you work with an experienced probate litigation lawyer to handle the will contest.

At RMO Lawyers, our team of probate litigation attorneys can help you navigate any disputes related to a pour-over will. With decades of experience in probate litigation, we understand the ins and outs of the law and the nuances that can arise in each case. We’ll approach your case with compassion and empathy to navigate unique family dynamics, uphold the best interests of the estate, and secure a beneficiary’s rightful inheritance. 

Schedule a consultation with our team to learn more about your legal options and how we can help you navigate them.