CA Estate Planning Blog

Wednesday, November 6, 2013

What Happens If You Forget to Put An Asset into Your Trust? A Pour-Over Will Can Help

What happens if I forget to put an asset into my Trust? This is a question that many of our clients ask during our meetings.

 

Legally, if an asset was not put into the trust by title or named to be in the trust, then it will go where no asset wants to go…to PROBATE. The probate court will take much longer to distribute this asset, and usually at a high expense. Sometimes, attorneys can file what is called a Heggstad Petition in which they claim that it was the Trustor’s INTENT to put this asset inside the Trust. The Court may or may not grant this request, depending on whether the Trust was correctly set up, if any of the assets were left out of the Trust and what documentation is available to prove that this was the Trustor’s intent. This, too, takes a more complicated route to get the asset where it needs to be. Therefore, our office provides a built in legal document that helps prevent this from happening.

 

In our living trust package, we provide not only a Living Trust, but a Pour-Over Will. What is a Pour-Over Will? A Pour-Over Will is basically a “catch-all” protective document that is intended to guarantee any assets which somehow were not included in the trust becomes assets of the trust upon the Trustor’s death.

 

The advantage of the pour over will is that it will take care of the assets that you don’t get around to transferring to the trust before your death. The disadvantages of the pour over wills is that that property will have to go through probate, and this force the living trust to go on longer after the death of the Trustors. However, most properties will not have to pass though the pour over will if you have a good estate plan and have transferred all the most valuable assets to the trust while you are alive and well. The pour over will should only catch all the leftover things that are of minor value and if the estate that is left outside the Trust is small enough, you may qualify for the Special Small Estate Probate Procedures. This procedure is simpler and less expensive than going through regular probate. 

If you have questions regarding this Pour Over will and our Living Trust Package, please don't hesitate to contact our office at 949-288-3598 or brian@mycaliforniaestate.com and we will be happy to assist you. 


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