Is a pour-over will something you need a barista for? Kidding, bad joke–of course not. A pour-over will is something that works in tandem with an existing trust that says (effectively) that any assets you didn’t include should go into your trust. This article helps you understand what a pour-over will is and even demonstrates using simple analogies and real case law. Let’s dive into all things pour-over wills.
Explaining a pour-over will to you like you’re 12
We get it. This is complex stuff. So, we’ve created a very simple analogy to demonstrate the concept of a pour-over will. Imagine you have a box for your valuable stuff (the box is a “trust” for this analogy). A pour-over will is like a note attached to that box. This note says, “If I get any new stuff later, or if I forgot to put something in the box, just toss it in here!”
That way, even if you forget something in your trust or get something new after creating the trust/will, it still ends up in your box (a.k.a., the trust). This makes it super easy to make sure all your stuff is in one place and gets handled the way you want when you die.
Example language of a pour-over will
If you’re wondering what a pour-over will actually look like, it can have many different types of language. One way it could be worded is the following:
“All such property, not otherwise distributed by this Will, and not already included in my Trust, shall be added to my Trust.“
Wills vs. pour-over wills
What is the difference between a regular old will and a pour-over will? A pour-over will “pours” assets into an existing trust. The pour-over wills assets are then distributed according to the trusts instructions. On the other hand, a regular will just distributes assets according to the wills instructions and doesn’t “pour into” the trust.
Benefits of pour-over wills
Why would someone want a pour-over will? Well, it’s simple. It’s mostly used as a “catch-all” if they want everything to be distributed according to their trust. It helps them ensure any future acquired or forgotten assets don’t get missed. Here are some more benefits:
- They can promote privacy: Once the assets have been transferred to the trust, they are private and do not go on public record.
- They consolidate assets: A pour-over will ensures all remaining assets are managed under the unified terms of the trust, even if some assets are acquired later or forgotten.
- They offer flexibility: Trusts provide more flexibility than wills in how assets are managed and distributed. Putting all assets in a trust allows more flexibility.
How pour-over wills work in real life
How do pour-over wills work “in the wild,” you ask? Great question. Let’s review a real court opinion regarding pour-over wills in Iowa. The facts of the case were as follows:
Florence M. McDowell died in 2006, leaving behind an 80-acre farm in Iowa. She had created a trust in 1990, intending for the farm to be included, but it was never formally transferred. Her will, also created in 1990, directed that her remaining assets be poured into the trust.
Florence’s daughters Martha and Mary wanted to sell the farm. They lived far away and thought it would be too difficult to manage. Evelyn, their sister, disagreed. She was in charge of the trust that was supposed to get the farm and didn’t want it sold. They asked a court to make the decision for them.
The court held that the farm should be transferred to the trust and dispersed according to the trust terms, so they sided with Evelyn. The reason behind this was that the will was clear: any other part of her estate, including the farm, should go to the trust. And Iowa law supports pour-over provisions, which can simplify this process and avoid probate court.
In re Est. of McDowell, 781 N.W.2d 568, 568 (Iowa Ct. App. 2010)
The downsides of pour-over wills
So, what are the downsides or drawbacks of pour-over wills? The assets that are “poured over” into the trust still have to go through probate. It can take longer to process these assets than it would have had they simply been included in the trust in the first place. A pour-over will is truly just a safety net, but it shouldn’t really be “Plan A.” There may also be a heightened possibility of disputes between beneficiaries/trustees over what should be included in the trust (or not).
The bottom line on pour-over wills
Pour-over provisions in wills are effectively a safety net to ensure any assets you may have overlooked or forgotten or haven’t acquired yet are added into your trust without having to create a whole new trust or amend your existing trust. They can help you stay flexible, give you peace of mind, and are easy to execute. But keep in mind, the assets that fall into the pour-over will have to go through probate.
Nicole Sheehey is the Head of Legal Content at HelloPrenup, and an Illinois licensed attorney. She has a wealth of knowledge and experience when it comes to prenuptial agreements. Nicole has Juris Doctor from John Marshall Law School. She has a deep understanding of the legal and financial implications of prenuptial agreements, and enjoys writing and collaborating with other attorneys on the nuances of the law. Nicole is passionate about helping couples locate the information they need when it comes to prenuptial agreements. You can reach Nicole here: Nicole@Helloprenup.com
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