September 4, 2013   Trusts

Why Do I Still Need a Will if I Have a Living Trust?

By Vickie Schumacher
Living Trust When your attorney prepares your living trust, he or she will also prepare a short “pour over” will to go along with it. There are primarily two reasons for having this document: 1) it acts as a safety net and sends a “forgotten asset” back into your trust and 2) it names a guardian for any minor children.
 
The Pour Over Will as a Safety Net
A revocable living trust can only control the assets that have been transferred into it. This process of changing titles and beneficiary designations to your trust is called “funding your trust.” It is a simple concept, yet it is what keeps you and your family out of the courts in the event of your incapacity and/or death; it also allows you to keep more control over the distribution of your assets to your beneficiaries.
 
While you may intend to put everything into your trust, you may inadvertently leave something out of it. For example, something may happen to prevent you from changing all appropriate titles and beneficiary designations. Or you could receive an inheritance or acquire new assets and simply not get around to titling the assets in the name of your trust. Or you could just forget an asset.
 
Your pour over will states that if a “forgotten” asset is discovered after you die, the asset is to go into your trust. It will probably have to go through probate first, but at least your pour over will catches the asset and sends it back (pours it over) into your living trust so it can be distributed as part of your overall estate plan.
 
Remember, a pour over will is simply a safety net. It is not a substitute for changing titles and beneficiary designations while you are alive. If your intention is to avoid probate (which is probably a big reason why you set up a living trust in the first place), you must fund your trust.
 
The Pour Over Will To Name a Guardian
In some states, the guardian for minor children must be named in a will. Even if you have established a trust for your children in your living trust plan, your attorney will also name the guardian in your pour over will to satisfy this requirement. This also keeps your living trust private, because only the pour over will is admitted to court when the guardian is appointed.
 
If your state does not require this, your attorney may go ahead and name the guardian in the pour over will anyway—just so your living trust will not have to be admitted to the court and made public.
 
Vickie Schumacher is the author of the best-selling book, “Understanding Living Trusts.®” The sixth edition is currently in production.
 
Rating
  1. Rate Article:
Form Controls

Register or Login to Rate.



0 Comments


To Comment, reply, or recommend, please Register or Login




Free Estate Planning Checklist

Free Estate Planning Webinar



Stay Updated

Stay updated by receiving updates to estateplanning.com's free resources, latest topics, premium content, upcoming events and more!

Subscribe to Our E-Newsletter