Using pour-over wills

A North Carolina resident can use a pour-over will as a backup mechanism to ensure that assets are passed to a trust after death. With a pour-over will, an estate owner is essentially designating their trust as the main beneficiary of any assets that are not already under the ownership of the trust or being passed directly to living beneficiaries in other ways.

Living trusts are ideal for individuals who want to avoid having their assets undergo the probate process. However, any assets that are funded into the trust before the grantor dies will have to go through probate, even if there is a pour-over will stating that the trust is to receive the assets.

Individuals with trust-based estate plans who die without completing a pour-over will leave the handling of their assets to state laws. The laws of intestate succession could then dictate how assets will be passed on to heirs.

The exact laws vary from state to state. For example, states differ on who they recognize as kin close enough to inherit from a decedent if there is no estate plan in place. The list of kin tends to include parents, surviving spouses, children, grandchildren and great-grandchildren.

An estate planning attorney may consider the types of assets a client has when suggesting certain types of trusts to include in an estate plan. In addition, legal counsel could help determine what other estate planning tools may be necessary to protect a client’s assets for future generations. A solid estate plan will limit the tax burden on beneficiaries.