How your will and your trust work together

by | May 14, 2018 | Firm News |

If you are a savvy New Jersey resident who has a living trust that protects your assets, it may surprise you to find out that by itself, your trust is insufficient to ensure that your trustee has the ability to distribute your assets as you wish after you die. If you have not already done so, you also need to make a pour-over will to complete your estate plan.

One of the very few disadvantages of a living trust is that it only contains the assets you put into it when you execute it. Any new assets you subsequently acquire do not automatically become part of your trust. If you make a pour-over will, however, you solve that problem. A pour-over will is a simple legal document instructing your executor to place whatever assets you own at the time of your death in your living trust.

Pour-over will advantages

You receive many benefits from executing a pour-over will to work together with your living trust, including the following:

  • You no longer need to worry that you forgot to put one or more of your assets into your trust.
  • You no longer need to constantly update and revise your living trust so as to make sure that every asset you own is part of it.
  • You have the satisfaction of knowing that your pour-over will is your catchall document that ensures that every asset you own ultimately becomes part of your living trust.
  • You also know that you have done everything possible to protect your financial privacy.

Probating your pour-over will

As you probably know, one of the biggest advantages of your living trust is that neither it nor any of your assets it contains are part of your probate estate. Your will, on the other hand, must be probated once you die. Despite this downside of all wills, however, when it comes time to probate your estate, your executor can do this much more quickly and easily than is the case with most probate estates.

Since your pour-over will instructs your executor to pour over any assets you own at your date of death into your living trust, all (s)he will need to do is pay your bills and any unpaid taxes. Then it is just a matter of getting permission from the probate judge to place your remaining probate estate assets into your trust. Once there, your trustee has the authority you granted him or her to distribute your assets according to your wishes.

Hand-in-hand compatibility

To ensure that your living trust and your pour-over will work together the way you want them to, make sure that each document mentions the other. Also make sure that neither document contains language that conflicts with the other and/or is ambiguous with regard to your wishes. Once your will and trust are completely compatible with each other, you can breathe a sigh of relief knowing that when the time comes, your executor and your trustee can work together to seamlessly carry out your financial wishes.