Every individual is unique, just as every estate plan is unique. While wills and trusts are the most common documents people think of, it is not as commonly known about the different types of wills and trusts available. One type of will in particular goes hand-in-hand with a living trust — known as a pour-over will.
Individuals or couples who create a living trust as part of their estate plan should also consider making a pour-over will. This document is designed to catch any assets that have not been retitled or transferred into the living trust and pour them into the trust upon the testator’s death. This ensures that all assets are properly accounted for and passed on to heirs according to the individual or couple’s wishes.
Benefits of a Pour-Over Will
There are many benefits to a pour-over will, most notably the feeling of completeness. While most individuals try to transfer as many assets as possible into a living trust, some assets may be accidentally or purposefully not included. When a pour-over will is in place, assets that are not included in the living trust may be accounted for in the pour-over will. This gives a finality mindset of knowing all assets will go to who they are intended for after someone passes.
Another benefit is for the executor. Just as in a typical will, a pour-over will also identifies an estate executor. An executor of a typical will may have to pay off debts and taxes of the estate before distributing assets. But with a pour-over will, an executor is only required to take assets under the will and move them into the living trust.
New York Estate Tax
While New York does not have an inheritance tax, there are estate taxes that impact some residents. As of 2021, any estate valued at more than $5,930,000 is subject to an estate tax of 5-16% depending on the estate's value.
If a pour-over will is in place, then heirs can receive the full value of their loved one’s estate by pouring any assets that were subject to estate tax into the living trust.
The Long Island Estate Planning Attorneys at Adler Law
No one likes to think about their own death, but a pour-over will is an important part of a comprehensive estate plan. If you have a living trust but not a pour-over will, the Long Island estate planning attorneys at Adler Law can help set one up. No matter where you are in the estate planning process, count on our compassionate, knowledgeable team to create a customized plan to meet your needs. Schedule an appointment with us online or by phone to get started. (516) 740-1184