In estate planning circles, a pour-over will is a specific kind of will used primarily in conjunction with a revocable living trust. Pour-over wills are not necessarily different than other types of wills as far as the legal requirements involved. Instead, their difference comes in the terms you choose to include.
Revocable living trusts and pour-over wills go hand-in-hand, and have to be created together in order to get the most use out of both of these documents. Here is a brief review of what pour-over wills in Greensboro, NC are, what they do, and how they work together with your living trust.
Creating a Living Trust in Greensboro
A revocable living trust, or RLT, is one of the more widely used estate planning tools today. Because federal estate tax exemptions are so high, very few people have to create estate plans that anticipate their estates paying estate taxes. Instead, the most pressing problem that most people will face is the possibility of a lengthy and costly probate process.
To avoid these potential probate costs, people can create a revocable living trust that will effectively allow their estates to avoid probate.
A trust is a type of legal entity that can own property. This entity survives you after you are dead, and because you get to determine the rules under which living trust operates, you can use it to distribute the property it owns after you’re gone. As long as you effectively transfer all of your individually owned property to the living trust, this means that your entire estate can avoid probate.
Pour-Over Wills in Greensboro NC
If the living trust allows you to avoid probate, you might be wondering why you need for any kind of will. First, a will covers a lot more than property concerns. There are other choices you can make in your will that you cannot make with other estate planning devices.
Second, it’s often very difficult to completely transfer all of your individually owned property to your living trust. When you die, any of this forgotten or overlooked property not owned by the living trust will have to go through probate.
This is why you need a pour-over will. The will acts as a safety net, transferring all remaining individual property you have at the time of your death into your living trust. Once under the trust’s name, your successor trustee can distribute the trust property to your inheritors as you like.
Wills and Probate
Like all wills, your pour-over will have to meet North Carolina legal requirements. Though these are relatively straightforward, you must ensure that the will, as well as the trust, is properly drafted. If you don’t, there could be significant probate problems when it comes time to distribute your state.