In this article, we answer the questions, “what is a pour-over will?” and “is a will necessary if I have a trust?” Along the way, we will also answer: “what is a will?”, “what is probate?”, “is probate required if I have a will?”, “should I have a will if I have a revocable living trust?”, and “what is the difference between a pour-over will and a standard will?”
A will is a legal document whereby the will’s creator (the “testator”) can accomplish the following:
For more on this, check out our article: Illinois Wills Explained.
Probate is a legal case that is sometimes required when an individual passes away in order to distribute the assets of the deceased individual (the “decedent”) to the beneficiaries of his or her will and his or her heirs.
Many people believe that if you have a valid will, your estate is not required to go through probate. However, this is a misconception. Probate is required in Illinois if the decedent owned (1) at least $100,000.00 in assets outside of a trust or payable on death accounts or (2) any real estate (regardless of value) outside of a trust and that is not owned jointly with right of survivorship.
A will does not allow your estate to avoid probate. However, a properly funded revocable living trust does allow your estate to avoid probate. For this reason, a trust rather than a will is the most common primary estate planning document for most people who own real estate or more than $100,000.00 in other assets.
Like a will, a revocable living trust allows its creator (the “grantor”) to direct how he or she would like his or her assets distributed upon death and to name a person who will be responsible for managing this process (the “trustee”). However, a trust has the added benefit of making probate unnecessary, allowing the trustee to distribute trust assets to beneficiaries or begin managing those assets for the beneficiaries’ benefit immediately upon the grantor’s death, without the need for a costly and time-consuming probate case.
We’ve established that trusts are often preferable than wills as a primary estate planning vehicle. However, even if you have a revocable living trust, there may still be a role for a will in your estate plan.
The one thing that a will can accomplish that a trust cannot is to allow its creator to name guardians for minor children. This is often the most important part of an estate plan.
Another consideration is that trusts only work to avoid probate if they are properly funded. This means that the grantor must ensure that when he or she passes, he or she owns less than $100,000.00 outside of the trust and no real estate outside of the trust. If the grantor makes a mistake in funding the trust, probate may be triggered.
In this case, all of the assets that have actually been transferred to the trust can still be distributed and managed immediately outside of the probate estate. However, any assets outside of the trust or payable on death accounts will have to go through the probate process.
In the absence of a will, the decedent’s trust cannot control how assets that go through probate will be distributed. Instead, Illinois’ intestate statute will determine how the decedent’s assets will be distributed. In addition, the decedent will not have control over who manages those assets until they are distributed to beneficiaries.
This is often not a concern for nuclear families who simply want their assets to pass to their children. In these cases, the intestate statute will coincide with the decedent’s wishes. For people in these situations without minor children, a will is not necessary in addition to a trust.
However, we usually recommend having a will in addition to a trust if:
If you have a will in addition to your trust and probate becomes necessary, the will will allow your wishes to be effectuated with respect to any assets that go through probate. When your primary estate planning vehicle is a trust, your attorney will generally use a “pour-over will” rather than a “standard will” to accomplish these purposes.
A “pour-over will” is the type of will that we generally create for someone who is using a revocable living trust as his or her primary estate planning vehicle.
Pour-over wills are very similar to standard wills. Like a standard will, a pour-over will allows you to name a guardian for minor children as well as an executor to manage your probate estate if one is required.
However, unlike a standard will, a pour-over will does not direct how you would like your assets to be distributed. Instead, the pour-over will references your trust and states that you would like your wishes as stated in your trust to control the distribution of assets in your probate estate. This is beneficial, because if your wishes change, you will only have to update your trust, rather than both your trust and your will.
The pour-over will is for assets that are left out of, or in other words “pour-over” your trust.
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