If you have decided to include a family wealth trust in your overall estate plan you likely made that decision, in part, because using a trust allows your estate to avoid a lengthy and costly probate process. In addition, your family wealth trust can be used to distribute the majority, if not all, of your estate assets. Despite this, you may have been advised to also execute a “pour over” Last Will and Testament. Understandably, you may then wonder “ Why do I need a pour over Will if I have a family wealth trust? ” To answer that question it is necessary to understand a little more about both family wealth trusts and pour over Wills.
A family wealth trust, or FWT, is a trust that is used to protect your assets for future generations. Despite the name, you need not be “wealthy” to benefit from a FWT. One significant benefit to a FWT is that, when drafted properly, a FWT can protect assets from creditors both now and after your death. Assets held in a FWT may also safe from claims made by a beneficiary’s spouse in a divorce. Because the assets are held in a trust they are not required to go through probate, yet another advantage to using a FWT. This does not, however, completely eliminate the need for a Last Will and Testament.
In theory, a FWT can replace the need for a Will; however, practically speaking your estate may have some loose ends when you die that can only be taken care of through a Will. For this reason, a “pour over” Will is usually executed along with a FWT. Although you may manage to transfer all of your most valuable assets into your FWT prior to your death, you will almost inevitably leave behind some assets that never made it into the trust. Personal items, vehicles, less valuable assets, bank accounts used for day to day banking, and even valuable assets purchased just prior to your death are all examples of assets that might be left out of your trust at the time of your death. These assets must be handled in some way after your death. A “pour over” Will allows you to direct all assets not already transferred into the trust to be “poured over” into the trust after your death. It effectively acts as a back-up plan to ensure that all assets are taken care of without the need for a lengthy probate of your estate.
If you have additional questions or concerns about pour over Wills, trusts, or estate planning in general, contact the experienced Missouri estate planning attorneys at Amen, Gantner & Capriano, Your Estate Matters, LLC by calling (314) 966-8077 to schedule an appointment.