Last Will and Testament / Pour-Over Will
Do you need a last will and testament?
The short answer is yes, you do need a will. The more important consideration is whether your will meets your needs. For most people, a pour-over will is the best solution.
The biggest myth and misunderstanding surrounding estate planning involves wills. We regularly hear this statement or some variation of it: “I have a will so my family won’t have to go through probate.” Unfortunately, a will is not sufficient for avoiding probate. In fact, a will FORCES probate if it is being relied upon to transfer assets after your death (if those assets are worth $75,000 or more in personal property, or $100,000 or more in real estate. If assets are worth less than those thresholds, assets may be transferred via a simpler process found in the probate code, commonly called a small estate affidavit). A will is merely instructions to the court of what you want after you pass away. If you don’t have a will, the probate court relies on the laws of intestacy when determine who will inherit, rather than following your instructions. If the only planning you’ve done is creating a will, you are almost guaranteeing your loved ones will have to go through probate court or at least some kind of informal probate process.
A pour-over will is part of a trust-based estate plan. If you have a trust, all of your assets, generally, should be funded into the trust, thus avoiding probate entirely. However, if at the time of your death, some asset is not held in the trust, the will (via the probate court) will require the asset to be gathered by the Personal Representative and poured-over into the trust so that the trust handles management and distributions. Preferably, all your assets are funded into your trust so that the pour-over will is never needed and probate is avoided.