One of the more popular misconceptions about estate planning is that if you create the right tool, such as a revocable living trust, you don’t need to create other tools. While having any kind of estate planning tool in place is good, relying on any one element is never something you should do.
The reality is that an estate plan is like a well-crafted jigsaw puzzle. In order for you to get a complete picture, each of your pieces have to fit together with the others.
This is especially true if you’re talking about a revocable living trust. Even though the trust will give you excellent estate planning benefits, it doesn’t protect you against everything that might happen. In order for your trust to work ideally, you have to create other elements, such as a pour-over will.
Wills and Trusts in California
Revocable Living Trust Benefits
The key benefit provided by a revocable living trust is that it will allow your estate to almost completely avoid probate. Whenever someone dies and leaves behind individually owned property, the probate court will have to get involved to supervise the process through which that property is transferred to new owners. Whether those new owners are creditors, inheritors, or other people identified in your estate plan, the property will have to go through probate before those new owners take possession.
The great thing about a revocable living trust is that it allows your estate to largely avoid this legal process. When you create a living trust you create a legal entity separate from you. Because this trust can live on after you are dead, the property it owns won’t have to pass through probate. So, you can use your trust to transfer your property to your inheritors after you die, while at the same time avoiding the probate requirements that are normally involved.
Pour-Over Wills and Living Trusts
But even though revocable living trusts are excellent tools, they aren’t perfect. In many situations, problems can arise when people improperly transfer their property to the living trust. Not only that, but people often forget to transfer individually owned property into the trust.
The pour-over will is there to correct those omissions or mistakes. A will has to go through probate. It allows you to direct how you want to transfer your individually owned property.
So, with the pour-over will, you get to direct that your individually owned property will be transferred to your living trust. This way you still get to use the trust to distribute inheritances, but you also have the safety provisions of the pour-over will to catch any property you might’ve missed.
Confused? Don’t worry. Help is available by consulting with an experienced and qualified estate planning attorney.