This is not a common kind of will for people to know about, but it is an option in Pennsylvania. This is a great companion to a trust and something that many people should consider for their estate planning process in PA. If you already have a trust in place, this can help to prevent your assets from being taxed at the full inheritance tax rate and it can also make it much easier for your assets to pass into the hands of the right people who have survived you. However, if there are some assets that you forgot to name in your trust, the pour-over will can help to make sure these items or assets are included in the estate as well.
How Does a Pour-Over Will Work?
A pour-over will can only work in conjunction with a trust. Trusts are your best bet for leaving your estate to your heirs in the state of Pennsylvania for many reasons, but there can be issues where items have been left out of the estate along the way. When you have a pour-over will in place, the will makes certain that items that were forgotten are included in the estate as it is passed to the right people. This kind of will also makes sure that assets are covered that the grantor did not fund into the trust at the time of their death.
When there is no will in place in this state, the remaining assets that are not included in the trust or given as gifts would be subject to intestacy laws. This means that they would be taxed for inheritance tax and that they would have to pass through probate. Probate can take as much as two years in PA, so you do not want to subject your family to this inconvenience.
This kind of will also provides legal protection by stipulating that the assets intended for the trust should be distributed to the trust’s beneficiaries if the trust should become invalid for some reason. This also works in the case of unfunded trusts that would otherwise be passed over for normal intestacy laws.
An Example of a Pour-Over Will in Action
If an older person wishes to give their estate to their children and grandchildren, they can create a trust for this purpose. However, they forget about their vehicles and the camping trailer that they bought shortly before their death. These assets would normally be taxed and have to pass through probate, but the pour-over will that they put in place with their trust protects this from taking place. These assets flow into the trust directly so that the family members can dispose of them as they wish or take ownership of them.
In this situation, the process of retitling the vehicles will also be much easier due to the pour-over will. There are so many reasons that a pour-over will is a great idea, but this illustration should have made it clear that there is almost always a practical argument for having a pour-over will in place to back up your trust. It can be very easy to forget about specific items in your trust documentation and then your decedents have to deal with the fallout.
Is A Pour-Over Will a Living Will?
A pour-over will is different from a living will in that it exists just to make sure that assets are moved into the trust when someone passes away. A living will is made to handle who gets which possessions and funds and to express the person’s preferences as to their burial arrangements and so forth. The pour-over will never provide specific information about how to handle any of these needs but instead protects the items that were left out of the trust in error, as well as the rights of the decedents to take possession of these items. You will only need a pour-over will if you have a trust, otherwise, a regular living will can be used to try and attend to all of these concerns.
At Antanavage Farbiarz, offer expert estate planning services for all of your needs. Our team of skilled lawyers can help you with the estate planning process and work with you on different kinds of estate and trust plans. You can also count on us for guidance on making donations through wills, trusts, gifts, and other methods as well. If you are ready to discuss your will and estate planning concerns, call us at (610) 562-2000 or use our contact form to schedule an appointment.