Should You Include a Pour-Over Will in Your Texas Estate Plan?

Living trusts are popular estate planning tools for individuals with assets and family members to protect, so creating one as part of your estate plan may be a good idea. But this isn’t the only legal tool you’ll need if you want the most protection possible. Your Texas lawyer might, and probably will, also recommend a pour-over will, which automatically transfers any remaining assets into your trust at the time of your death. 

While you aren’t required to make a pour-over will, having one in place can help you rest assured that any assets you didn’t formally transfer to the trust during your lifetime will still end up there. In this way, a pour-over will acts as a safety net for your assets, which is why the skilled legal team at South TX Family Law might recommend one for you. Get to know how this type of will works and why it might benefit you as you prepare to hire a Texas lawyer to help plan your estate. 

How Do Pour-Over Wills Work?

The first thing to know about a pour-over will is that it’s considered a backup for a revocable living trust, which is why it’s often recommended that you pair these two estate planning tools. This means you should first seek a lawyer’s help in setting up a living trust to hold and manage the assets you wish to leave to your beneficiaries. 

Once you have a trust set up, you can write a pour-over will that names your trust as the beneficiary. So, when you sign this legal document, you’ll state that you wish to leave all assets still in your name to your living trust. This can be helpful if you purchased a new car or other item shortly before your death and didn’t get the chance to transfer it to the trust before passing away. Often people do not realize that any property they own that is not specifically titled in the trust name will not be included in the trust. This means that after the trust document is signed, all real estate requires a new deed and financial institution accounts will require new signatures on record. It is fairly common for people who die with a trust to own something at death that is not included in the trust.  Even if you simply forgot to transfer an older asset to the trust, your pour-over will ensures that it will automatically be transferred upon death and distributed according to the terms in your trust. 

While trust assets can avoid probate, any assets that go through the pour-over will must go through the probate process. But once probate is done, they will be transferred to the trust and distributed to the beneficiaries according to the trust documents. Without a will, any assets that are not titled in the trust name before your death will have to go through probate as well and the process is much more expensive and time consuming without a will, plus without a will, the property may not be distributed the way you intended. If you have questions about this process, your Texas estate planning attorney can provide legal guidance. 

What Are the Benefits of Having a Pour-Over Will in Your Estate Plan?

Making an estate plan should give you peace of mind regarding your future, as the tools you choose can assure you that your assets will be distributed to your loved ones when you pass away. A pour-over will is just one of these tools, and it offers some unique benefits to consider.

Among them is the layer of security it offers when it comes to ensuring all your assets make it to your living trust. No matter how careful you are to transfer your assets during your lifetime, it’s possible you’ll overlook a few or pass away before you get the chance to transfer new assets to the trust. Even something like a refund check or final paycheck that comes after your death made payable to you or your estate rather than payable to your trust will require a probate proceeding in order to be cashed. Items that go through probate will not automatically be distributed to your trust if you don’t have a Will specifically directing that to happen. When you have a pour-over will, you can breathe a sigh of relief that your assets will be transferred upon your death. 

Another benefit of a pour-over will is simplifying estate administration by keeping all assets in one trust. Consolidating your estate plan this way can streamline the distribution of assets, speeding up the process while minimizing confusion among your loved ones. 

All the while, the pour-over will maintains the privacy of your estate despite going through probate. This is because the pour over will can simply state the property is to be transferred to the trust without revealing the nature of the property or the ultimate beneficiaries.  The details of the trust will remain private, not a matter of public record which is what happens to last wills during probate. 

In addition, a pour-over will can prevent your assets from being distributed according to Texas intestacy laws, which only take effect if you pass away without a will. After all, your assets will be transferred to your trust, at which point the trust documents will direct asset distribution. A knowledgeable Texas estate planning lawyer can further explain these benefits to you, so call today for answers to your questions. 

What Details Should You Consider Before You Make a Pour-Over Will?

Though pour-over wills have several advantages and are often recommended as a result, it’s essential to know about the potential drawbacks of relying on them. 

The main issue is that they must go through the probate process, during which the assets are vulnerable to creditor claims, lawsuits, and delay. Even though a well-written will in Texas can avoid many of the costs associated with probate, there are still some expenses that will be incurred by the probate process. As such, any will cannot offer the same protections as trusts and should be treated as a backup, not a primary way to fund your trust.

It’s also important to know you can’t include all assets in a pour-over will, as some accounts cannot be controlled by a will or trust document, but must be delivered according to the terms of the policy or retirement account rules. For example, retirement accounts and life insurance policies require designated beneficiaries to avoid probate, so make sure you name your beneficiary to ensure such assets are distributed according to your wishes. Likewise, if you have a pay on death or right of survivorship designation on any financial account, the named beneficiary will receive the funds rather than your trust. If you want any of those proceeds (life insurance, retirement accounts, or pay-on-death financial accounts) to go into your trust, you must designate the trust as the beneficiary with forms provided by the insurance company, financial institution, or retirement manager.

Finally, you must periodically review your pour-over will to ensure it still aligns with your estate planning goals. This should be done every few years and after any major life change, such as divorce, marriage, or the birth or adoption of a child. A Texas lawyer will help you review and modify all aspects of your estate plan for peace of mind. 

How Can a Texas Estate Planning Lawyer Help You?

If you’re looking for estate planning tools that complement your living trust, a pour-over will may be right for you. This legal document is simple to make and can strengthen your estate plan, ensuring your assets are distributed according to your trust documents when you pass away. In Texas, a reputable lawyer who prepares your trust documents should recommend that you sign a pour-over will at the same time that you sign your trust instrument.

Whether you have questions about how pour-over wills work or are ready to make one today, you can count on South TX Family Law to provide the legal counsel you need. Call our firm at 210-775-0353 to talk to a caring Texas estate planning attorney.