When planning for the future, many consider creating a will to ensure our assets are distributed according to our wishes. One type of will often comes up in estate planning discussions is the pour over will.
This type of will works in tandem with a trust, directing that any assets not already in the trust at the time of one’s passing should be transferred into it.
While pour over wills can offer certain advantages, like simplicity and the promise of a seamless transfer of assets, they also come with a range of disadvantages.
In this article, we’ll dive into the various drawbacks of pour over wills.
Disadvantages Of A Pour Over Will
First, let’s talk about what a pour-over will do. It’s like a safety net. It catches any of your property that you still need to put in a trust.
Then, it adds that property to the trust after you pass away. While this sounds helpful, there are some downsides to consider.
1. Probate Court Involvement
One big issue with pour-over wills is probate court. Probate is a legal process where the court looks at your will to make sure it’s valid. This process can take a long time and cost a lot of money.
Because a pour-over often requires probate, your family may have to wait longer to get your property. They can also pay more in legal fees.
2. Privacy Concerns
Another disadvantage is privacy. Probate court is a public process. This means that details about your property can become public information.
For many people, keeping their financial matters private is essential. There may be better choices than a pour-over if privacy is a big concern for you.
3. Limited Control Over Certain Assets
A pour-over will not give you total control over all your assets. Some things, like retirement accounts and life insurance, usually go directly to the people you named as beneficiaries.
They don’t pass through the will. So, when you want to change where these things go after you pass away, you need to update the beneficiaries directly with each account or policy.
4. Complexity And Cost
Creating a pour-over will be complex. You not only make a will, but you also need to set up a trust.
This means more legal documents and potentially more legal advice. All of this can add up, making it more expensive than other will options.
5. Not Ideal For Small Estates
A pour-over may not make sense if your estate is small. The cost and effort of setting up and managing a trust may be better for smaller estates.
In these cases, a more straightforward will be a better, more cost-effective choice.
6. Trust Funding
A big part of a pour-over will’s success depends on how well you fund your trust. When you forget to put property into the trust, it will go through probate anyway.
This means you must be very careful and organized about updating your trust. This can be a hassle and requires ongoing attention.
7. Delays In Distributing Assets
Because of probate and the need to transfer property to the trust, there can be delays in giving your property to your beneficiaries. This wait can be hard for families who need access to those assets quickly.
8. Possible Legal Challenges
Finally, pour-over wills can face legal challenges like any other will. Family members would like to change how the estate is handled to challenge the will in court. This can lead to more delays and expenses.
Conclusion
A pour-over will have advantages, but it could be better for some. It can involve more time, more money, and less privacy than other options. It’s also complex and not ideal for smaller estates.
Talking to a legal expert is a good idea if you’re thinking about making a pour-over. They can help you understand if it’s the right choice for your situation.
Remember, planning for the future is essential. But choosing the right tools to ensure your wishes are followed is just as important. A pour-over will is one option, but there are many others. Consider all the choices before you decide.