I Want a Revocable Living Trust… Do I Need a Will?
“Well, if you have a Revocable Living Trust, don’t you also need a Will?” the other attorney asked.
“Yeah, you need a Will,” I responded.
“Ah ha!” the other attorney exclaimed as if he has just made some profound and overriding point to justify his position that using a revocable living trust was somehow no more beneficial than having a Last Will and Testament and that attorneys were somehow just trying to get paid to draft an additional document.
The short explanation is that the Will that goes along with a Revocable Living Trust is called a “Pour-Over Will” which has some important but bare-bones work to do as a backup mechanism to the trust.
- A Revocable Living Trust avoids probate for all assets that are in the trust or end up in the trust automatically after death. But just having a Revocable Living Trust doesn’t mean your assets magically end up retitled in the name of the trust. They have to have the ownership transferred to the trust or the trust named as a pay-on-death beneficiary. What about assets that are not changed? The Pour-Over Will names the trust as the beneficiary of the probate estate, so once the assets go through the probate process, they “pour over” into the trust to be distributed with everything else.
- The Pour-Over Will names the official executor in charge of wrapping up your final affairs, handling debts, and other matters.
- Depending on state law, there are some specific “boilerplate” provisions regarding issues such as how taxes are allocated, how underage beneficiaries are treated with regard to inheritances, and whether or not the executor has to post a bond. Some Pour-Over Wills also nominate guardians for minor or disabled adult children, although my firm uses a separate document for that.
While the Revocable Living Trust handles a lot when it comes to estate planning, it doesn’t cover absolutely everything. The Pour-Over Will is an important backup document to help round out your estate planning system.
For more information, check out my free audiobook Estate Planning Basics available here: https://youtu.be/-D_zLcS3n_Q