When making a will, one issue to be aware of is that it could be out of date the day after you make it. How is that you ask?
When you create a standard will, you list all the assets you own and set out how you want the executor to distribute them after you die. Yet, you do not stop buying or acquiring things the moment you sign your will.
A standard will can only account for what you include in it. That is why it is crucial to review and update it at regular intervals. Yet, what if you die before you update it?
Anything that did not make it into the will must be distributed according to the state’s intestate succession laws. That means to your close family in the order and ratio the state specifies, which may not be the order and ratio you would choose.
A pour-over will can mop up anything you forget
If you instead create a pour-over will, this pulls anything you forgot or did not get around to adding into your will. Where does it pull it into? A revocable living trust – so first you need to set one of those up.
“Revocable” means you, the person that makes the trust (the grantor), can change it. Living means you make it and move assets into it while you are alive. When you create the trust, you put most of your assets in and set rules for what the trustee (the person who will manage it) should do with the property it contains when you die. There may be some things that do not go in, such as anything with a beneficiary designation.
You should still review and update your estate plan regularly, adding any new assets to that trust. Yet, thanks to the pour-over will, any assets not included will automatically be included in the living trust once you die.
Not everyone needs a pour-over will and revocable living trust. Finding out more can help you determine if they will benefit you.