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A pour-over will is a will used to distribute a person’s remaining assets after they die. This type of will is often used in conjunction with a trust.
The pour-over will “pours” the deceased person’s assets into the trust. The trustee then shares the assets according to the content of the trust.
Pour-over wills are commonly used in estate planning to help ensure that all person’s assets are distributed according to their wishes. It can also be used to protect assets from creditors or to reduce estate taxes.
If you are considering using a pour-over will in your estate planning, it is essential to understand how they work and their benefits and drawbacks. This article will provide an overview of pour-over wills in Canada.
A pour over will is a kind of legal agreement that assures an individual’s residual assets will be transferred to a preexisting trust following the individual’s death.
A pour over will is also defined as a type of last will that acts as a safety measure to capture any assets that have not been transferred to or included in a living trust.
The “funding” of a living trust is an essential step in the process of establishing one. This step entails transferring your assets into the trust document, which can be done by re-titling the assets in the trust’s name or using the trust document to make the transfer.
A pour-over will is excellent for dealing with minor possessions that you may need to look into or choose not to include in your Trust.
A pour-over will is a kind of will that handles properties that a grantor did not put into their trust at the time of their death.
This might have been done intentionally or accidentally by the testator. Due to this protection measure, a pour over will serve the purpose of a kind of safety net.
The pour-over will specify that these assets be transferred to the trust and dispersed per the grantor’s instructions; moreover, the transfer may take place slower than it would have if the assets had always been part of the trust.
The pour-over will specifies assets to be transferred and dispersed following the grantor’s objectives. Although, the transfer may be slower than if they had been in the trust from the onset.
The pour-over will also offers additional defense against trust-related legal problems by mandating that, if the trust is declared invalid—or, in the case of an unfunded trust the assets set aside for the trust be distributed to its beneficiaries.
Making a will using a pour-over format is a reasonably straightforward process. You will be required to:
A pour-over will requires that you must establish a living trust before you can make the will itself.
If you have a large or complicated estate, consulting with an attorney specializing in estate management can help give you direction while you create your living trust.
On the other hand, if your estate is uncomplicated, you can establish a trust online.
After establishing your trust, you can draft the provisions of your pour-over will. To begin, you must designate a beneficiary in your pour-over will. This is the individual who will be given your residual estate, which refers to the assets of your estate that were not transferred into your trust before you passed away.
You should name your trustee as the residual beneficiary if you want the remainder of your assets to go into your trust. This ensures that your wishes are carried out.
In creating a pour-over will, you must select an executor responsible for carrying out the bequests made in the will. If in your will you declare that you want whatever is left of your estate to be transferred into your trust, then the person in charge of carrying out your wishes after your death will be the executor.
Imagine the process as being similar to the passing of a baton: the executor of your will transfers property into your trust, and then your trustee is in charge of those assets.
There are various pros and cons to deal with when using a pour-over will
You may be familiar with how a “pour-over will” works if you’ve researched the use of revocable living trusts to avoid probate. This kind of will is often used in conjunction with a living trust. Any assets left to beneficiaries under your will will “flow over” into your trust when you pass away.
After that, money goes to whomever you designated as the trust’s beneficiaries while you were still living.
As opposed to wills, which become public documents after death and may be accessed by anyone, trusts remain private. As a result, your heirs’ identities will remain concealed.
A pour over will work with a living trust. Under a trust arrangement, the distribution of assets is spelled out for everyone to see. It also makes things simpler for whoever is left in charge of the distribution of your properties after you die.
The principal disadvantage of pour-over wills is the passing of property via probate. The probate process may delay the distribution of assets destined for a living trust. This means the living trust could have to continue functioning for a while after the trust creator has passed away.
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Offers shown here are from third-party advertisers. We are not an agent, representative, or broker of any advertiser, and we don’t endorse or recommend any particular offer. Information is provided by the advertiser and is shown without any representation or warranty from us as to its accuracy or applicability. Each offer is subject to the advertiser’s review, approval, and terms. We receive compensation from companies whose offers are shown here, and that may impact how and where offers appear (and in what order). We don’t include all products or offers out there, but we hope what you see will give you some great options.
Pour over will is a form of will that works hand in hand with an individual's living trust. A pour-over will notify the court that you want some of your assets transferred to your trust after you pass away and is meant to "capture" any property you did not move into your trust during your lifetime. Your property that has been moved into your trust should be excluded from your pour-over will to avoid confusion.
No. Probate court is not necessary for the distribution of assets that have been transferred to a living trust, but the distribution of any assets that have not been moved to the trust will still need to go through the court system. For this reason, it's crucial to keep your trust active and to add any new assets to it as soon as possible throughout your lifetime.
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