Latest / Family Law Talk / Pour-over wills explained: Connecting your will and trust

Transcript

Pour-over wills explained: Connecting your will and trust · Family Law Talk

• 0:01
  Speaker 1: Welcome to Familylaw Talk. Familylaw Talk presented by Kurt Stangy
• 0:06
  of Stangy Lawfirm PC. Stangy Law Firm is a multi
• 0:10
  state family law firm. Now here's your host, Kirk Stangy.
• 0:17
  Speaker 2: Welcome to Family Law Talk. We have an interesting topic
• 0:20
  today and the topic is in a state planning topic
• 0:23
  title poorover Wills Explained, Connecting your will and Trust in
• 0:27
  this episode today is based on an article on our
• 0:30
  blog FAMI Lawheadquarters dot com dated March thirtieth, twenty twenty six,
• 0:35
  and the title of that article is understanding poor over
• 0:38
  Wills how they work with revocable trust. So as a
• 0:42
  follow up to the episode today, go on over to
• 0:44
  Familawheadquarters dot com and read this article for more information.
• 0:49
  All right, most individuals know what a simple will is.
• 0:52
  A will can be an important document for individuals if
• 0:56
  they have a simple will, that simple will, upon their
• 0:58
  death is to be submitted to the probate court. The
• 1:02
  estate is then administered through the probate court process, which
• 1:07
  can be expensive, tedious, and cumbersome because it's overseen by
• 1:12
  the probate court itself. All right, So most individuals know
• 1:16
  what a last will and testament is a lot of
• 1:19
  individuals come into a law off as wanting a last
• 1:22
  will and testament, but they don't fully understand the probate
• 1:26
  court and how it works and how it's tedious, and
• 1:29
  how an individual's errors then have to deal with the
• 1:31
  probate court in order to get their share of the
• 1:35
  assets is outlined in the will, all right. Another way
• 1:38
  to do this is through a poor overwill, which a
• 1:41
  lot of individuals have no idea what it is, okay
• 1:44
  at poor overwill is used in conjunction with irrevocable trust,
• 1:49
  So an individual creates a revocable trust. It could be
• 1:53
  called a family living trust or something like that. And
• 1:58
  what the poor overwill does is it works alongside that
• 2:02
  revocable trust, and the primary function is a little bit
• 2:06
  different than a last will and testament, like just a
• 2:11
  simple last will and testament without the revocable trust. All right.
• 2:15
  What the poor overwill is supposed to do is pour
• 2:19
  over the assets into the revocable trust. So it acts,
• 2:23
  if you will, as kind of a safety net, So
• 2:26
  all the assets hit the safety net and then they
• 2:30
  pour over into the revocable trust, and then the assets
• 2:34
  are distributed according to the terms of the trust itself
• 2:38
  and without the oversight of the probate court. Okay, so
• 2:42
  that's the point and the purpose of a poor overwill,
• 2:46
  which is to get the assets out of probate and
• 2:50
  into the revocable trust. All right. A lot of individuals
• 2:53
  that are confused about revocable trust. What is that again?
• 2:57
  A revocable trust is sometimes referred to is a living trust,
• 3:03
  and these are kind of the same thing. It's just
• 3:05
  synonymous terms. But assets are held by this legal entity
• 3:11
  created daring an individual's lifetime to hold the assets, and
• 3:15
  then within the trust there's typically a trust D. An
• 3:20
  individual while they're alive is typically the trust D and
• 3:24
  they maintain full control over the property within the trust
• 3:29
  all right. One of the primary advantages of a revocable
• 3:31
  trust is that the assets that are properly transferred into
• 3:35
  it during the lifetime avoid probate upon passing, and so
• 3:40
  this can make the transfer of assets upon death more efficient,
• 3:44
  it can make it more private. It can actually result
• 3:47
  in less attorney fees on the back end because the
• 3:51
  errors don't have to deal with the probate court, or
• 3:55
  at least the extent to which they have to deal
• 3:58
  with the probate court is minimized, all right. Again, the
• 4:02
  goal is to take the assets and pour it over
• 4:07
  into the revocable trust, all right. So again let's break
• 4:12
  this down a little bit more detailed, simple will versus
• 4:15
  trust based planning. Okay, So simple will alone requires that
• 4:20
  the assets passed through probates, so that will has got
• 4:25
  to be filed with the probate court. The probate court
• 4:27
  then supervises the process in terms of distributing the assets
• 4:32
  and paying the the debts of the estate. Okay, So
• 4:36
  this can involve delays, additional cost. Typically, public notice has
• 4:42
  to be published to give creditors time to file any
• 4:45
  claims against the estate that they want to file. So
• 4:49
  if an individual owed money to various debtors and they
• 4:54
  can file claims against the estate, these debts are then
• 4:58
  paid before asset that are distributed, So again it delays
• 5:02
  this whole process. Whereas if there's a revocable trust paired
• 5:06
  with a poor overwill, then this is going to allow
• 5:10
  many of the assets to pass outside of probate just
• 5:14
  through the trust terms, which can help streamline the process
• 5:17
  that maintains privacy, and it can really reduce a lot
• 5:22
  of the complications. All right. Another question lots of individuals
• 5:25
  have is the cost considerations, and what individuals need to
• 5:28
  look at is upfront versus long term. Okay, the truth
• 5:32
  is upfront, a simple will is probably going to cost less, right,
• 5:39
  less expensive, So a lot of individuals can gravitate toward
• 5:43
  having the simple will because it's not going to cost
• 5:46
  them a lot of money. In contrast to revocable trust,
• 5:49
  with a poor overwill is typically going to involve higher
• 5:53
  upfront legal fees because there's more document drafting that has
• 5:58
  to take place. Well, you know, some individuals can shy
• 6:03
  away from it when they hear this, but the reality
• 6:05
  is on the back end there's a savings because on
• 6:09
  the back end there's less interaction with the probate court,
• 6:13
  which is going to keep fees down. So individuals when
• 6:15
  they're weighing this have to think of the long term,
• 6:18
  and the long term is that the poor over will
• 6:22
  with irrevocable trust is often going to save money and hassle. Okay.
• 6:27
  One of the other things individuals need to think about
• 6:30
  is do they want to make things easier on their errors?
• 6:34
  So if they want to make it easier on their
• 6:37
  errors or poor overwill, and irrevocable trust is going to
• 6:41
  help that ease. Right, loved ones aren't going to have
• 6:45
  to deal with the probate court, or at least not
• 6:48
  deal with it nearly as much, and so that can
• 6:53
  be a good thing for them. Whereas if it's a
• 6:55
  simple will and that has to be filed with the
• 6:58
  probate court, again, it's going to be more time, more hassle,
• 7:02
  more fees, and it's going to take them a longer
• 7:04
  period of time typically to get their share of the estate. Okay,
• 7:09
  so just some final thoughts. A poor overwill is not
• 7:12
  a standalone solution. Okay, you would just have a poor
• 7:15
  overwill by itself. You have to have the poor overwill
• 7:18
  with the revocable trust. These two things work in tandem,
• 7:23
  all right. And these are tools that can really help
• 7:27
  keep assets out of probate and make things a lot
• 7:30
  easier on the errors. And yes they can cost more
• 7:33
  money on the front end, but on the back end
• 7:36
  it can save a lot of money. It is typically
• 7:39
  worth having. So look, every situation is different, Every situation
• 7:42
  is unique. Some individuals might just want a simple will,
• 7:45
  even in hearing this podcast today, but individuals ought at
• 7:49
  least think about having that poor overwill with the revocable trust,
• 7:53
  that make things a lot easier on the back end
• 7:57
  for airs, and it keeps the assets out of probate. Obviously,
• 7:59
  there's a lot of other intricacies with revocable trust as well,
• 8:05
  like certain assets need to be titled in the name
• 8:07
  of the revocable trust during the individual's lifetime. So again,
• 8:15
  bank accounts could be titled the name of irrevocable living trust.
• 8:18
  A lot of assets could be transfer on death payable
• 8:22
  on death to the revocable trust, for example, so these
• 8:27
  assets then go into the trust. If that's not the
• 8:29
  case and the assets don't enter into the trust, and
• 8:33
  then the idea of avoiding probate doesn't occur. So it's
• 8:37
  really important to speak with a lawyer about how you
• 8:39
  title all your assets if you've created a poor overwill
• 8:43
  and a revocable trust, because you want to make sure
• 8:45
  you've done all the tiling you need to do. Another
• 8:48
  big tip is look after a divorce. So if you
• 8:51
  create this during marriage and you get divorced, then you're
• 8:54
  going to probably want to update your poor overwill and
• 8:57
  revocable trust because individuals are married, where when couples are
• 9:02
  married they typically leave you know, good chunk of their
• 9:06
  assets to their spouse, but after they get divorced, they
• 9:09
  probably don't want that anymore. So good time to have
• 9:11
  a lawyer relook at your estate plan is right after
• 9:14
  the divorce as well, to make sure it's updated accordingly
• 9:18
  to count for the fact that you are now divorced.
• 9:21
  All right, So that's the episode today again. As a
• 9:23
  follow up to the episode, going over to my blog
• 9:26
  Familoheadquarters dot com dated March thirtieth, twenty twenty six. The
• 9:30
  title of the article is understanding poor over wills, how
• 9:33
  they work with revocable trust and this will give you
• 9:36
  more information on this topic. But thanks for tuning in today,
• 9:39
  stay tuned to our next episode of Family Law Talk
• 9:42
  coming up. Thank you very much.
• 9:44
  Speaker 1: Thank you for listening to Family Law Talk with Kirk Stangy.
• 9:48
  Visit Stangy Lawfirm dot com for more about today's topic
• 9:52
  or to put Stangy Lawfirm to work for your family today.
• 9:56
  The choice of a lawyer is an important decision. It
• 9:58
  should not be based solely on average. Either the Supreme
• 10:01
  Court of Missouri or Illinois reviews or improves certifying organizations
• 10:05
  or specialist designations. The information you obtained in this podcast
• 10:08
  is not, nor is it intended to be, legal advice.
• 10:11
  You should consult an attorney for advice regarding your individual situation.
• 10:15
  We invite you to contact us and welcome your calls, letters,
• 10:18
  and electronic mail. Contacting us does not create an attorney
• 10:21
  client relationship. Please do not send any confidential information to
• 10:25
  us until such time as an attorney client relationship has
• 10:28
  been established. As the results afford no guarantee of future results.
• 10:31
  In every case is different and must be judged on
• 10:33
  its own merits. Kirk Stangy is responsible for the content
• 10:37
  Headquarters Office one twenty South Central Avenue, Sweet four fifty, Clayton, Missouri,
• 10:41
  sixty three one oh five. Kirk Stangy is licensed in Missouri, Illinois,
• 10:44
  and Kansas