People work hard for the wealth they have obtained, and so for many, it is hard to give up control over it while they are alive. Even more so, they still want to have a say in what happens to their property upon their death. In the meantime, a living trust is established and funded with some assets. Suppose you want to retain the same trustee to administer your estate and benefit the same beneficiaries upon your death. In that case, a pour-over will in California may be a possible solution.

At Law Offices of Maria N. Jonsson, PC, our estate planning attorney in Los Angeles will review your estate and develop a plan aligned with your wishes, and address any concerns you might have. A pour-over will is valuable, and we will discuss what it can (and cannot) do. Contact us today at (424) 383-8445 to schedule a in-depth consultation and to learn more about estate planning and pour-over wills.

What Are Pour-Over Wills?

To understand what constitutes a pour-over will, it is important to understand revocable living trusts. A living trust holds the assets of the trustor, or person creating the trust. A trustee is a person with the fiduciary responsibility of managing the assets in the trust for the benefit of the beneficiaries. Living trusts are revocable, and to be valid, they must be funded. In other words, they must actually hold property. When the trustor passes away, there may be assets that have not yet been transferred into the living trust. That is where the pour-over will is invaluable. 

A pour-over will is a type of will stating that any assets or property owned by the trustor at their death that was not titled in their Trust, and had no beneficiary designation, will transfer (or pour over) into the trust, and will pass as per the terms of the trust.

Who Needs a Pour-Over Will in California?

Anyone who wants all their assets to go into a living trust at the time of their death should consider a pour-over will. Even with the best-laid plans, life can be unpredictable, and one or more assets may not be transferred into the trust while the testator is alive. A pour-over will can be viewed as a safety net, catching all the assets that the testator did not transfer into the trust while they were living, and transferring them after they pass away. 

Vehicles are one asset that it is usually best to not include in a trust, for several reasons. First, in case there is an accident that leads to litigation, the details of the trust may be brought up in court. Also, many insurers will deny coverage for vehicles titled in the name of a trust.

There are other times when a testator simply forgot about an asset or was not aware of the asset. For example, they may have inherited the asset shortly before their death and had not yet been made aware of its existence. A pour-over will is able to move all of these assets into the trust. 

What is the Difference Between a Will and a Pour-Over Will?

A regular Last Will & Testament (also known as a testamentary will) is a way for a testator (the person creating the will) to leave final instructions on how they want their assets distributed. It is a way for them to name who they wish to receive their belongings after they are gone, as well as who they desire to have custody of their minor children. The testator also NOMINATES a personal representative (also known as an executor in some jurisdictions) to distribute the assets as directed by the will and according to the law. It is the Probate Court however that APPOINTS the nominated Executor to represent the Estate.

A pour-over will is a much simpler document whose purpose is to transfer any assets owned by the testator at the time of their death into the living trust - by naming the Trust as the sole beneficiary of the pour-over will.

Probate and Pour-Over Wills in California

Probate is a court-supervised process wherein the decedent's estate is administered. It includes paying creditors and distributing assets. It can be a tedious, time-consuming process, which is also a public process. One of the reasons so many people choose to use living trusts in their estate planning is because of their ability to avoid probate. However, all wills, including pour-over wills, must go through Probate. 

Depending on your circumstances, it may be a good idea to have a pour-over will in place if you want all your assets handled through a trust when you die. However, in most cases, it is best to still transfer most if not all assets into the trust while you are alive and have the pour-over will in place just in case it is needed. The reason is twofold: 

1. Assets placed in a trust avoid probate while those that go through a pour-over will might not be able to avoid probate; and 
2. A pour-over will can be challenged, creating costly and time-consuming litigation. 

Keep in mind though that some jurisdictions allow some assets (especially those that do not satisfy a certain threshold amount in terms of value) to avoid probate. In this situation, some people may transfer their larger assets into the trust, leaving out smaller assets that do not meet the threshold, thus, avoiding probate.

For example, in California, personal property (which includes bank accounts, life insurance, retirement accounts, etc.) that IN SUM do not exceed $184,500, do not go through formal probate, but if real property is not held in trust at the owner's death, or if personal property exceeds $184,500, then these assets will need to be administered in Probate Court.

At Law Offices of Maria N. Jonsson, PC, we will help you determine if a pour-over will is necessary and, if so, what assets are best transferred into the living trust, what assets can be collected with a Small Estate Affidavit, and what assets need to be administered in Probate Court.

Do You Need an Estate Planning Lawyer for Pour-Over Wills in California?

A pour-over will is typically executed at the same time other estate planning documents are, such as a living trust. Because these legal documents must adhere to certain rules and legal standards to be valid, it is in your best interest to consult with an estate planning lawyer. An attorney experienced in this area can review your particular circumstances, and if a pour-over will is needed, can prepare it for you. Wills are very technical, and can easily be deemed invalidly executed by a Court if they don't comply with very specific requirements for proper execution. If the Probate Court does not admit a Will due to it being incorrectly executed, the estate will be administered as an intestate estate and the inheritance rules of intestacy of the California Probate Code will apply.

Contact an Estate Planning Attorney in Los Angeles Today

At Law Offices of Maria N. Jonsson, PC, our estate planning lawyer based in Los Angeles is committed to drafting solid, comprehensive estate plans that work for you and your families. We aim to save your loved ones time and money upon your death. We also want to make sure that while you live and grow your estate, you benefit from the estate plan as well. Contact us today by filling out the online form or calling us at (424) 383-8445 to schedule a in-depth consultation.