Many people create a revocable living trust to ensure their assets avoid the cost and delay of probate. They meticulously transfer their home bank accounts and investments into the trust assuming this new document makes a will obsolete. This is a common and potentially costly misunderstanding.
In Texas, a will remains a critical companion to even the most well-managed trust. It acts as an essential safety net for your entire estate plan.
What is a pour-over will?
The special will that works with a trust is what you call a “pour-over will.” Its goal is to “catch” any assets that you did not title in the name of your trust during your lifetime.
Upon your death, the pour-over will directs these forgotten assets into your trust. From there, the instructions you laid out in your trust agreement control the management and distribution of those assets.
What happens if you skip the will?
Without this will, any assets left outside the trust are “stuck.” They do not automatically go into the trust, and the court must handle them separately. This creates two significant problems:
- Probate becomes necessary: The very process you sought to avoid will be required to transfer these non-trust assets.
- The state decides who inherits: The court will distribute these assets according to Texas intestacy laws, not your trust. They will follow state law to identify your heirs which may not align with your specific wishes.
From an administrator’s perspective, the pour-over will is a vital failsafe. It is easy to acquire new assets, like a car or a new bank account, and forget to formally title them in the trust. This will ensures those items are still handled according to your plan.
A pour-over will also serves a crucial function that a trust cannot. It is a primary document used to name a guardian for your minor children.
Because a will handles such critical tasks that a trust cannot, it’s vital to ensure all your documents work together correctly. An experienced attorney can review your documents to ensure your estate plan is complete and that all your assets are secure.