Many individuals include a trust as part of their estate plan. The advantages of establishing a trust include avoiding probate, maintaining financial privacy, and protecting assets. But even if you have a trust, your estate plan should also include a pour-over will to ensure that your trust provides the protection and privacy you intend. Pour-over wills and trusts work together to accomplish your estate planning goals.
Executing the document to set up a trust is only one step in the process of establishing a trust. The trust document does not transfer assets into the trust. The second important step in setting up a trust is funding the trust by transferring assets into it.
Funding a trust involves taking the actions necessary to transfer property into the trust. For a testamentary trust, which takes effect on the death of the person establishing the trust, property is generally transferred into the trust under the provisions of a last will and testament. However, for an irrevocable or revocable inter vivos (living) trust created during your lifetime, you transfer assets into the trust after it is set up by the trust document.
The process of funding a trust is complicated, because it requires evaluating all your property and properly transferring assets into your trust. You should never attempt to set up or fund a trust without help from an experienced estate planning attorney.
The need to fund your trust does not end after the first time you transfer assets to the trust. You likely will continue to acquire assets throughout your life. Those assets also need to be transferred into the trust. If they are not, they will not be protected from probate and disclosure after your death. That’s why you need a pour-over will, in addition to a trust.
A pour-over will is a special type of will that is part of an estate plan that includes an irrevocable or revocable living trust. This type of will is different from a last will and testament.
Even if you are conscientious about transferring property into your trust, there is a chance that assets or property could be left outside the trust when you pass away. This type of will makes certain that property remaining in the estate after death is transferred into the trust for distribution according to the terms of the trust. In the absence of a will, those assets would be transferred under Georgia’s laws of intestate succession, instead of according to your wishes.
In other words, a pour-over will acts as a safety net to ensure that no property or assets are inadvertently left outside your trust when you pass away. This type of will enables you to fully control distribution of all the property in your estate and ensure everything goes into your trust.
Like a last will and testament, a pour-over will must be filed with the probate court following the death of the testator. Any property or assets remaining in the estate go through the probate process and transfer to the trust after completion of probate. Your trust documents are not filed with the court, so your privacy is protected in terms of what assets are already in the trust and who receives them.
By making certain that any property remaining in your estate is ultimately transferred to your trust, a pour-over will protects your assets and the beneficiaries of your trust. If you do not have a will, property remaining in your estate could be distributed to your relatives under the state law of intestate succession. That may mean your trust beneficiaries would not receive it. In this way, your will and trust work together to ensure that your intentions are fulfilled after your death.
Even if you have a will in conjunction with your irrevocable or revocable living trust, the best way to maximize the benefits of your trust is to make certain that your property is transferred into your trust when you acquire new assets. To that end, the ideal approach is to review your assets annually at a pre-designated time, then meet with your estate planning attorney to make sure that any newly acquired assets are transferred into your trust.
In our Cartersville estate planning practice at Asset Protection & Elder Law of Georgia, we focus on protecting our clients and their assets, whatever their unique circumstances are. We help clients who wish to create a trust to ensure that their estate is distributed according to their own wishes. We also provide advice about all other aspects of estate planning that relate to a client’s individual circumstances.
We provide services to clients throughout the communities northwest of Atlanta, including in Bartow County, Cobb County, Cherokee County, Gordon County, Floyd County and Paulding County.