What role does a pour-over will serve in a New York estate plan?

On Behalf of | Oct 6, 2023 | Wills |

Adults putting together estate plans typically prioritize creating testamentary documents. A will can name a guardian for minor children and can clarify who should receive which assets from their estate. A trust can create a very structured system for the distribution of assets previously owned by the testator.

Some people choose to use solely a will or a trust, but many others may benefit from using both documents in their estate plans. If someone intends to have a trust manage the vast majority of their resources after they die, they may also want to create a special kind of will to reduce the likelihood of mistakes and oversights that might complicate the New York probate process.

A pour-over will can transfer assets after someone’s death

There are numerous ways for someone who creates a trust in New York to fund a trust. Many times, people will arrange while they are still alive to have their most significant resources transferred to the trust. Doing so protects those resources from creditors and can reduce the likelihood of estate taxes later. Such planning might also help people qualify for Medicaid if they need it as they age.

People might use their largest financial accounts, business interests or real property to fund a trust in New York. However, they may want the trust to oversee the investment and distribution of all of their resources. A pour-over will can help accomplish this goal. A pour-over will does not transfer assets to specific beneficiaries but instead arranges for them to become the property of a pre-existing trust. Pour-over wills are excellent for handling personal property and other resources that someone may have overlooked during their initial estate planning efforts.

However, there are limitations to what a pour-over will can achieve. It will not automatically protect resources from creditor claims nor eliminate the risk of estate taxes. The assets will transfer as part of the probate process, which is important for testators to understand as they decide what documents would work for them.

Making use of the right estate planning tools could make it significantly easier for someone to achieve specific goals for their own protection and their final legacy.