Reason for a pour-over trust

Answer 1

Actually, there really is such a thing as a pour-over trust. It's not as commonly used as a pour-over will, but it does have its uses! The primary use of such an instrument is to aid in planning for incapacity. Such an instrument allows the donor to place assets in a trust during his or her lifetime and to act as the Trustee until his or her death. Often times, the Donor will name him or herself as a Co-Trustee along with a corporate entity such as a trust company or bank. Most, if not all, trusts include language regarding how the trustee should distribute property in the event the Donor-Trustee becomes incapacitated. This allows the remaining Corporate Trustee to continue distributing the funds on the behalf of and for the benefit of the Donor-Trustee. Unlike other Revocable Trusts however, the pour-over Rev. Trust terminates at the death of the Donor and all assets held by the Trust go back to the estate and go through probate. So long explanation short, a pour-over Trust is a great tool for planning for incapacity. I think you actually mean to ask the reason for a pour-over WILL, not a pour-over TRUST. A pour-over will is a will that specifically states that the decedent's assets should be moved into that person's living trust - or "poured over" into the trust. Typically, all of the person's assets are intended to be part of the trust, but sometimes trustors forget to title an account or property in the trust's name. In this situation, the pour-over will ensures that the asset ends up in the trust. One downside is that the trust was probably intended to avoid probate, whereas assets that are moved into the trust via the pour-over will usually must go through probate. Thus, it's far better to be sure to title everything in the name of the trust to avoid this undesired effect.