If one of your primary goals for your estate plan is to prevent your estate from having to go through a long probate process, you’re likely considering placing your most valuable assets in a revocable living trust. This is a good way to make things easier for your loved ones after you’re gone and to maintain your privacy, since assets that don’t go through probate don’t need court filings that can be accessed by just about anyone.
You can establish a revocable living trust long before your senior years. Because you’re the trustee, you can add and remove assets from it throughout your life. Once the trust is established, you just need to title (or retitle) any asset going into it in the trust’s name. This can be done with homes, cars, boats and financial accounts. It doesn’t limit your access to these assets.
You can even name your trust as the beneficiary for assets like your retirement and investment accounts if you like. People do this when they want their assets to go into their estate when they die and then want the estate assets distributed in designated percentages to beneficiaries.
You’ll also name a successor trustee to take over when you pass away to manage the distribution of the assets in the trust. Often, people name their personal representative (executor) as their successor trustee.
The role of a pour-over will
If you set up a living trust, you still need a will. There are things you handle through a will (such as naming a guardian for your children) that you can’t do with a living trust. Even if you don’t need to do that, you still need a will to deal with the assets that aren’t covered in your living trust.
Jewelry, furniture, art and things you may not have gotten around to putting in your living trust need to be distributed. By including a simple provision in your will that all assets not in your living trust should be transferred to the trust (for distribution with the other assets), you save even more assets from having to go through probate. Because this will “pours over” these assets, you’ll likely hear this called a pour-over will, since that’s it’s main purpose.
This is actually a lot simpler than it may sound – at least it is if you have experienced estate planning guidance. This can help ensure that your wishes and your loved ones are protected.