Pour-Over Assets

Pour-Over Assets

Pour-over assets refer to property or assets that are transferred into a trust upon the death of the trustor (the person who created the trust). This mechanism is commonly utilized in estate planning to ensure that all assets are properly managed and distributed according to the terms of the trust.

In a typical scenario, a trustor creates a living trust and designates specific assets to be placed into the trust during their lifetime. However, it is possible that some assets are not transferred into the trust before the trustor’s death. To address this, a pour-over will is often executed alongside the trust. This will stipulates that any assets not previously transferred to the trust will “pour over” into the trust upon the trustor’s death.

For example, if a person establishes a revocable living trust and includes their home, bank accounts, and investments but forgets to transfer their car title into the trust, the pour-over will would dictate that the car should be transferred to the trust upon the individual’s death.

The advantage of utilizing pour-over assets is that it simplifies the probate process by consolidating all the assets into the trust for distribution according to the trust’s terms, bypassing the need for separate probate proceedings for each asset.

In Texas, especially in areas like Houston where estate planning is crucial, utilizing pour-over assets can help ensure that all assets are efficiently managed and distributed according to the trustor’s wishes, reducing complexities and potential disputes among heirs.