Why You Still Need a Pour-Over Will—Even If You Have a Trust?

At Bethel Law, we talk estate planning, finances, real estate, and taxes. One of the most common questions clients ask is: “Do I need a Will or a Trust?” The answer isn’t as straightforward as you might think. In fact, in many cases, the real answer is: both.

Do You need a Will or a Trust?

When a client asks whether they need a Will or a Trust, we begin with two follow-up questions:

1.       Do you own any real estate?

2.       Is the total value of your assets above the probate threshold?

 As of the date of this post, the probate threshold in California is $184,500. If you answered “yes” to either, you need a Revocable Living Trust (RLT) to avoid probate.

But that’s only part of the picture. Even if you have a Trust, you still need a Pour-Over Will.

What Is a Pour-Over Will?

A Pour-Over Will works hand-in-hand with your Revocable Living Trust. Its job is simple but crucial: it catches any assets left outside the Trust and transfers (or “pours”) them into the Trust after your death.

Without it, those outside assets could go through probate—exactly what the Trust was supposed to avoid.

Learn More: When Should I Put My Home in a Trust?

Why Are Assets Left Outside the Trust?

If a Trust is supposed to avoid probate, why would any assets be left out of it? Good question. Some assets, especially real estate and high-value accounts, should absolutely be titled in the name of the Trust. But in practice, not everything ends up there.

In California, the high probate threshold allows for some flexibility. Many people keep lower-value financial accounts—like checking and savings—in their own names. These don’t trigger probate if kept below $184,500, and they can be more accessible in certain situations.

Note: Retirement accounts are a separate topic. Those stay in your name, and you name beneficiaries directly. You can name individuals as direct beneficiaries or you can name your Trust. However, that is a topic best left for another post.

Lear More: Should I Put My Brokerage, 401(K) or IRA in My Trust?

Why Keep Bank Accounts Out of the Trust

One key reason: accessibility.

Here’s how Trust Law works. A Trust has three roles:

·         Trustor: The person who creates and funds the Trust.

·         Trustee: The person who manages the Trust.

·         Beneficiary: The person who benefits from the Trust.

 If you’re the sole trustee of your Trust, only you can access accounts titled in the Trust. That becomes a problem if you fall ill or can’t manage your affairs—and no one else is authorized to help.

To solve this, many clients keep certain accounts in their name only and appoint someone (e.g., a son or daughter) through a Financial Power of Attorney. This allows your chosen person to access your accounts when needed, without having to make them trustee of your Trust.

Transferring Personal Assets at Death

What happens to those personally owned accounts when you pass away?

That’s where the Pour-Over Will comes in. Once you die, your Financial Power of Attorney is no longer valid. Any assets in your name alone become part of your personal estate. The Pour-Over Will directs that everything in your estate gets transferred into your Trust.

As long as those personal assets were under the probate threshold and everything else was properly titled in the Trust, your estate avoids probate. Your heirs never have to step foot in a courtroom.

The Bottom Line

Smal estate planning includes:

·         A Trust to hold your major assets.

·         A Financial Power of Attorney to manage affairs during your lifetime.

·         A Pour-Over Will to ensure everything ends up in the right place after you’re gone.

It’s not about having more documents – It’s about having the right documents.

Learn More: How to Build Generational Wealth (The Secrets Rich Families Use)

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