Creating a will allows the expression of your final wishes and ensures your heirs receive your assets. However, legal doctrines surrounding wills often get lost in legal jargon. While you may not have heard of a pour-over will, this legal doctrine can be crucial to estate planning. It can help your estate avoid a lengthy probate court process. Let’s explore how a pour-over will works to send assets to your trust, thus bypassing the costly court system. We’ll also examine how other North Carolina will doctrines can streamline your estate plan.

What Are Pour-Over Wills?

Your family can avoid expensive and often lengthy probate court processes. The pour-over of probate assets into an inter vivos trust can help. You can create a pour-over will that directs your assets to go into an inter vivos trust.

Assets passed on in a will usually go through the probate process. However, with a pour-over will, most of your assets are already in a trust, and those assets skip probate. Your pour-over will deals with the loose ends not already in the trust. For those assets in trust, your successor trustee can then immediately distribute your assets as you direct in trust documents. 

However, you must create the trust your assets pour into before the execution of the will. In other words, you can establish a trust during your lifetime and then include provisions in your will to pour over assets into that trust upon your death.

It is important to note that the trust may be amendable or revocable. This means that you may allow changes to the trust while you’re still living.

The pour-over will enables you to pour assets into your trust after death as part of a comprehensive estate plan. Work with your attorney to ensure a smooth transition of assets and honor your intentions.

The Benefits of Avoiding Probate

Probate court can be an overwhelming process for families dealing with the estate of a deceased loved one. In North Carolina, it’s often beneficial to avoid probate altogether.

Most estates legally must go through the court-mandated probate process to settle an estate. The probate process takes time, money, and energy. Often, an executor must hire appraisers, attorneys, and other experts.

A family member frequently acts as executor of the will. This means they must work

  • Inventorying the estate
  • Creating reports for the court
  • Paying income and estate taxes
  • Determine which creditors to pay and understand the order to pay them
  • Other time-consuming work

When the estate plan is complex, heirs may not receive their inheritance until a year after their beloved family member passes away.

The estate may also deplete in value with lengthy court proceedings, delays, legal fees, court fees, etc. In addition, the public nature of probate proceedings leaves the estate open to family disagreements and legal battles.

How to Avoid Probate in North Carolina

You may use several strategies to avoid probate court, including:

  • Transferring assets through designated beneficiaries on life insurance policies and retirement accounts
  • Establishing joint ownership: Property ownership arrangements that bypass probate
  • Revocable living trusts (inter vivos trusts) created while you are living. You can add your assets to the trust before death or create a pour-over will to move all remaining probate assets into your trust after death.

While probate court is a necessary legal process in North Carolina, understanding its implications and exploring ways to avoid it can save families time, money, and potential conflicts.

By being proactive in estate planning and utilizing effective strategies, individuals can ensure a smoother transfer of assets, maintain privacy, and provide their loved ones with a less burdensome experience during a difficult time.

How Does a Pour-Over Will Work with a Living Trust to Create a Comprehensive Estate Plan?

A living trust (revocable trust) is a legal entity that holds and manages your assets during your lifetime and distributes them to beneficiaries upon death.

It offers several advantages over a traditional will, including

  • Privacy
  • Probate avoidance
  • Greater control over asset distribution.

As the trustor (trust creator), you can act as the trustee and manage the trust’s assets. The beneficiaries are the individuals or entities who will ultimately receive the trust assets.

The pour-over will works in tandem with a living trust. Its primary purpose is to transfer any assets that were not included in the trust during your lifetime into the trust upon your death. It also designates an executor who oversees the transfer process and a successor trustee who will manage the trust after your passing.

  • The living trust serves as the centerpiece, providing probate avoidance and allowing for efficient asset distribution.
  • The pour-over will acts as a safety net, capturing any remaining assets that may have been inadvertently excluded from the trust during your lifetime.

When implementing a living trust, it is crucial to fund it adequately by transferring assets into its ownership. This may involve retitling real estate, bank accounts, investments, and other valuable assets. Regular reviews and updates to the trust and pour-over will are also necessary to reflect changes in your circumstances, such as acquiring new assets or changes in beneficiaries.

When establishing a living trust and creating a pour-over will, consulting with an experienced estate planning attorney is highly recommended. They can provide personalized guidance, ensure the proper execution of these documents, and help you tailor your estate plan to meet your needs and goals.

With a well-crafted living trust and pour-over will, you can have peace of mind knowing that your assets will be managed and distributed according to your wishes while minimizing potential complexities and ensuring the smooth transfer of your estate.

Other Interesting Will Doctrines

Incorporation By Reference in a Last Will and Testament

Incorporation by reference allows other writings to become part your will. The included writings don’t need to follow the formalities for a will. In simpler terms, a document or writing that is not a formal will can still be considered part of the will if the testator clearly intended to include it.

For example, a testator has a separate document that lists specific gifts they want to bequeath to certain individuals. Even if that document was not signed in the presence of witnesses, it could still be part of the will. However, you must have explicitly referenced it and expressed your intent for it to be part of the will.

Acts of Independent Significance

The second doctrine is acts of independent significance. This doctrine allows a testator to refer to facts or circumstances that exist outside of the will but have relevance to the distribution of assets. Essentially, it enables the testator to make provisions in their will that depend on external factors or events.

For example, a testator may leave assets to the trustees of a school without specifically naming the trustees in the will. External circumstances, such as the board of directors or a designated authority, determine the trustees’ identity. Similarly, a testator may leave a bequest to the individuals who cared for their spouse in old age or the contents of their safe deposit box. However, to give effect to such provisions, extrinsic evidence must be presented to identify the beneficiaries or the property being bequeathed.

The principle of acts of independent significance is recognized in North Carolina law to ensure the testator’s intent is honored.

A Comprehensive Estate Plan May Include Will Doctrines

Understanding will doctrines provides valuable insight into creating valid North Carolina wills.

  • Incorporation by reference allows additional documents to become part of a will.
  • Acts of independent significance recognize external factors that influence asset distribution.
  • Pour-over will provisions facilitate the seamless transfer of assets into an existing trust.

A basic understanding of these doctrines can help you engage in meaningful discussions with legal professionals, ensuring your final wishes are appropriately addressed and protected.

Our Experienced Estate Planning Attorneys Can Help

Our experienced estate planning attorneys are here to assist you in navigating the complexities of creating a living trust and pour-over will. With our in-depth knowledge of North Carolina law, Hopler, Wilms, and Hanna can guide you through the process, ensuring that your estate plan is comprehensive, legally sound, and aligned with your specific objectives.

Whether you need assistance drafting the documents, understanding the funding process, or updating your existing estate plan, our estate planning attorneys provide personalized advice and solutions tailored to your unique circumstances.

By consulting with our team, you can gain peace of mind, knowing that your estate plan is in capable hands and that your loved ones will be well taken care of according to your wishes. Contact us today to schedule a consultation and take a proactive step toward securing your legacy.

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