When you include a living trust in your estate plan, you may transfer property to or from that trust during your lifetime. As noted by SmartAsset.com, a living trust may hold real estate assets while your named beneficiaries receive income from them. A living trust, which you may revise as often as you wish, may also name you and your family members as its beneficiaries.
Your appointed trustee takes over responsibility for managing the trust’s assets if you become ill or incapacitated. When you die, your will may specify which assets transfer to your trust. You may also specify which assets the probate court may distribute to the individuals named in your will.
Traditional will vs. pour-over will
A traditional will specifies who receives your assets after your death. A pour-over will, however, allows you to leave property to the trust you created. Unlike a traditional will, a pour-over will generally acts as a supplement to a living trust.
Assets intended for transfer to your trust upon your death typically bypass probate. With a pour-over will, any leftover assets or belongings you may have forgotten to include in your estate plan also transfer to your trust.
Benefits of a pour-over will
By creating a pour-over will, you may leave specified assets to a family trust. You may leave other assets to individuals or charities by listing them in your will. Because those assets are not destined for your trust, however, they enter the probate process.
When you name your trust in a pour-over will, the assets specified may bypass probate and transfer directly to that trust. They may then become accessible to the trust’s beneficiaries. The other assets may enter probate before they pass on to the parties named in your will. As noted by the AARP, probate may reflect a lengthy and potentially complex process.