The Importance of the Pourover Will
The Importance of the Pourover Will
By: Debbie B. Jones, Esq.
November 23, 2021
In California if you prepare a Revocable Trust to transfer your assets outside of the Probate Court, it is essential that you include a Pourover Will as part of your complete Estate Plan.
When a Revocable Trust has been created, the creator of the Trust must “fund” the trust with their assets. This includes recording a grant deed of your residence into the Trust and in some cases naming the trust as a beneficiary on financial accounts. If for some reason a property is removed from the trust for refinancing or a new property is purchased, and then not transferred back into the Trust, it could cause a problem when the Trustor dies.
“Pourover” describes a testamentary transfer of the decedent’s nontrust assets to the trustee of a revocable trust that becomes irrevocable on the Trustor’s death.
The State of California enacted a statute to address transferring nontrust assets by Pourover Will to the Trustee of a Revocable Trust, that has become irrevocable by death of the Trustor.
The Uniform Testamentary Additions to Trusts Act (Prob. Code, §§ 6300-6303) expressly permits testamentary gifts to revocable trusts. The Pourover Will has one function: to distribute the Trustor’s property according to the Trustor’s wishes even though that property wasn’t transferred to the trust during the Trustor’s lifetime. This could happen either because the assets were acquired after the revocable trust’s initial funding or because the revocable trust was only nominally funded during the Trustor’s lifetime.
The assets transferred are added to and administered as part of the now irrevocable trust along with its existing assets. In this way, the Will “pours over” into the Trust. The pourover doesn’t happen automatically, the trustee must still take action:
- If the value of the assets not yet transferred to the trust doesn’t exceed $166,250, the trustee may be able to collect the assets without probate under the affidavit procedure in Probate Code section 13100; or
- If the value of the assets not yet transferred to the trust exceed $166,250, the Trustee will have to petition the court for permission to transfer the items into the Trust for distribution according to the terms of the Trust, also known as a Heggstad Petition.
In order for the Heggstad Petition to be successful, the Trust must be identified in the Will of the decedent, and the Will must indicate that the decedent transferred the residue of the estate into their Trust.
If avoiding Probate is your primary objective with your Estate Plan, please make sure that your Estate Plan includes a Pourover Will. If you have questions regarding your current Estate Plan or if you are considering creating your Estate Plan be sure to contact BPE Law Group and discuss with our Estate Planning professionals.
The information presented in this Article is not to be taken as legal advice. Every person’s situation is different. If you are facing a legal issue of any kind, get competent legal advice in your State immediately so that you can determine your best options.
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The Importance of the Pourover Will
By: Debbie B. Jones, Esq.
November 23, 2021
In California if you prepare a Revocable Trust to transfer your assets outside of the Probate Court, it is essential that you include a Pourover Will as part of your complete Estate Plan.
When a Revocable Trust has been created, the creator of the Trust must “fund” the trust with their assets. This includes recording a grant deed of your residence into the Trust and in some cases naming the trust as a beneficiary on financial accounts. If for some reason a property is removed from the trust for refinancing or a new property is purchased, and then not transferred back into the Trust, it could cause a problem when the Trustor dies.
“Pourover” describes a testamentary transfer of the decedent’s nontrust assets to the trustee of a revocable trust that becomes irrevocable on the Trustor’s death.
The State of California enacted a statute to address transferring nontrust assets by Pourover Will to the Trustee of a Revocable Trust, that has become irrevocable by death of the Trustor.
The Uniform Testamentary Additions to Trusts Act (Prob. Code, §§ 6300-6303) expressly permits testamentary gifts to revocable trusts. The Pourover Will has one function: to distribute the Trustor’s property according to the Trustor’s wishes even though that property wasn’t transferred to the trust during the Trustor’s lifetime. This could happen either because the assets were acquired after the revocable trust’s initial funding or because the revocable trust was only nominally funded during the Trustor’s lifetime.
The assets transferred are added to and administered as part of the now irrevocable trust along with its existing assets. In this way, the Will “pours over” into the Trust. The pourover doesn’t happen automatically, the trustee must still take action:
- If the value of the assets not yet transferred to the trust doesn’t exceed $166,250, the trustee may be able to collect the assets without probate under the affidavit procedure in Probate Code section 13100; or
- If the value of the assets not yet transferred to the trust exceed $166,250, the Trustee will have to petition the court for permission to transfer the items into the Trust for distribution according to the terms of the Trust, also known as a Heggstad Petition.
In order for the Heggstad Petition to be successful, the Trust must be identified in the Will of the decedent, and the Will must indicate that the decedent transferred the residue of the estate into their Trust.
If avoiding Probate is your primary objective with your Estate Plan, please make sure that your Estate Plan includes a Pourover Will. If you have questions regarding your current Estate Plan or if you are considering creating your Estate Plan be sure to contact BPE Law Group and discuss with our Estate Planning professionals.
The information presented in this Article is not to be taken as legal advice. Every person’s situation is different. If you are facing a legal issue of any kind, get competent legal advice in your State immediately so that you can determine your best options.
Recent and Popular Articles From Our Blog:
2020 Blogs:
- April 28 – A New Reality – Temporary or Permanent – Virtual Showings and Disclosures
- May 22 – Servant Leadership
- June 8 – Paycheck Protection Program Flexibility Act is Enacted
- June 10 – Impact to Credit Score After Filing Chapter 7 Bankruptcy
- June 26 – SBA Rolls Out Updated PPP Loan Forgiveness Application
- July 2 – Understanding the Home Equity Sales Contract Act 2020
- July 14 – Governor Rolls Back Re-Opening
- August 4 – August 2020 COVID-19 Update
- August 18 – Status Of Selected California State Operations re: COVID-19
- September 1 – COVID Update on Foreclosures and Evictions
- September 3 – State Passes AB 3088
- September 15 – Update on PPP Forgiveness and Impacts
- November 10 – Changes to the Fair Housing and Discrimination Advisory CAR Form
- November 24 – In a Season of Difficulty – We Choose Gratitude
- December 15 – Cal/OSHA Issues New COVID Prevention Rule
2021 Blogs:
- January 5 – Introduction to New Laws 2021
- January 26- Rain and the Prevalence of Failure to Disclose Claims
- February 2 – California Enacts COVID Tenant Relief Act (SB 91)
- March 9 – Understanding the Trust Exception to Real Estate Disclosures
- April 20 – Cash for Keys and SB 91
- May 4 – Help! Tenant Won’t Cooperate with Sale of Home
- May 11 – California Passes AB 80
- June 15 – Pinhole Leaks in Copper Pipes in Folsom