What Is a Pour-Over Will and How Does It Work?

Being human these days means occasionally dropping balls – missing a bill payment, forgetting a deadline or just failing to follow through on a commitment you made with the best of intentions.

Usually, it’s no big deal. But sometimes, it creates a problem you can’t easily undo. One example is setting up a revocable trust and then leaving property and assets outside of it. It won’t matter until you die ... and then it can threaten to undo your entire estate plan. But of course, you won’t be here to fix it.

That’s where a pour-over will comes in. It’s an essential companion to a revocable trust that helps you avoid dropping any balls.

WHAT IS A POUR-OVER WILL?

A pour-over will is a type of will that directs any assets that aren’t in a trust you’ve set up during your lifetime to be transferred into that trust upon your death.

While your trust governs how your assets are distributed, it only applies to property that has been properly titled in the trust. If you forget to move an account or acquire new property later, those assets could fall outside your trust’s control.

A pour-over will catches those stray assets and “pours” them into your trust after your passing, ensuring they are distributed according to your trust’s instructions.

POUR-OVER WILL VS. TRADITIONAL WILL

Most people are familiar with a traditional will. It is a basic estate planning document used to identify how you want your assets distributed when you’re gone (as well as name your executor and guardian, if needed).

If you have a revocable trust, you may not need a traditional will (revocable trusts are often called a “will substitute”), but you should still have a pour-over will. Unlike a traditional will, its purpose isn’t to provide instructions on distribution of assets – the instructions are in the trust. Instead, it ensures all appropriate assets end up in the trust, too.

HOW DOES A POUR-OVER WILL WORK?

When someone with a pour-over will dies, the executor named in the will identifies assets that are not already titled in the trust. They could include real estate and financial accounts that were initially overlooked.

Next, the nominated executor files a probate petition to be formally appointed as the executor. Once this process is complete, the executor can collect these assets and move them – or “pour over” – to the trust. 

This sequence highlights an important point: While a pour-over will ensures assets end up in the trust, it doesn’t necessarily eliminate probate for assets not titled in the name of the trust during the grantor’s lifetime. But it’s still important; let's see why.

POUR-OVER WILL EXAMPLE

Consider this example: You create a revocable trust and transfer your home, investment accounts and bank accounts into it.

Later, you open a new bank account but forget to have the account titled in the name of the trust. When you pass away, if you don’t have a pour-over will, in most cases the assets of the bank account will be passed down according to state intestacy laws – the rules governing what happens when someone dies without a will. The court won’t make assumptions about what you “probably” wanted based on the trust; they have to follow state law, which could conflict with your wishes.

With a pour-over will, the bank account will be moved into your trust after probate, ensuring it follows the distribution plan you set up.

DOES A POUR-OVER WILL AVOID PROBATE?

It depends. If all your non-retirement assets are titled in the name of your living trust during your lifetime, probate may not be needed. 

If not, a probate proceeding will be necessary before your executor may collect those assets and transfer them into the trust. 

However, by ensuring those assets ultimately end up in your trust, you ensure your distribution instructions will ultimately apply to them.

BENEFITS OF A POUR-OVER WILL

A pour-over will offers several advantages that make it a valuable part of a trust-based estate plan:

• Completeness: It captures assets unintentionally left out of the trust, reducing the risk of gaps in your plan
• Consistency: By funneling assets into the trust, it ensures all property is governed by the same set of rules, minimizing confusion for heirs
• Simplification: It centralizes asset distribution under the trust, making administration easier for your executor and trustee

WHEN A POUR-OVER WILL IS COMMONLY USED

Pour-over wills are used in trust-based estate plans. They serve as a backstop for unintentionally omitted assets. A pour-over will is a safeguard that helps ensure the disposition of all assets ultimately follow the trust’s instructions.

POUR-OVER WILL REQUIREMENTS

Like any will, a pour-over will must meet certain legal requirements to be valid. Each state has its own rules for executing a will. And of course, a pour-over will only works if there is a trust to receive the assets.

POUR-OVER WILL VS. LIVING TRUST

A living trust is a trust that is opened while you’re still alive and its purpose is to control how your assets are distributed. However, it can only control the assets that are held inside it, a separate process that isn’t automatically part of the trust’s creation.

A pour-over will doesn’t replace a trust; it complements it. The trust is the primary tool for managing and distributing your assets, while the pour-over will acts as a safety net to catch anything left out. Without a trust, a pour-over will serves no purpose.

WHERE A POUR-OVER WILL FITS IN ESTATE PLANNING

A pour-over will is best viewed as a supporting document within a comprehensive trust-based estate plan. It’s not a substitute for thorough planning, but it helps ensure nothing slips through the cracks. Combined with a fully-funded trust and updated beneficiary designations, it can help you manage your legacy.

Whether you need one is simple: If you have a revocable trust, you need one. If you don’t, then you don’t (but, of course, you still need a traditional will).