Tag: Pour-over will

Can a Trust Creator Ever Act as the Trustee, and Why?

Posted May 22, 2022 by Law Office of Andrew Szocka

Sometimes, the creator of a trust also acts as its trustee. This situation most often happens when someone creates a trust intended to benefit relatives after the creator passes away.

Why Would the Trust Creator Act as the Trustee?

Often, someone placing his or her property in trust (a “settlor”) wants to maintain some control over the property. He or she might create a trust that appoints himself or herself as the trustee, at least for now. The property can get transferred into the trust, but the settlor still gets to make the management decisions. The settlor might even be one of the beneficiaries too (but cannot be the only beneficiary).

As long as the settlor is alive, he or she can manage trust property and add more property to the trust. Placing property in trust during your lifetime has many advantages, including privacy, asset protection, and sometimes tax benefits.

What Happens If the Settlor Passes Away?

If the settlor passes away, a successor trustee should take over trust management. This trustee is either named in the trust document or appointed by the court. The successor trustee picks up where the settlor-trustee left off, managing assets for the benefit of the beneficiaries.

Often, settlors structure their trusts so that assets in their estate “pour over” into their trust once they pass away. This may avoid the need for probate of the estate. It also may allow the settlor to more readily pass on assets to the trust beneficiaries over time.

If a settlor does not have a “pour over” will and trust, then assets not placed in trust before the settlor’s death must get distributed according to the will. Unfortunately, some settlors intend to transfer ownership of assets to their trust but never get around to completing the formalities. This can result in a complicated estate distribution and beneficiaries not receiving the benefits that the settlor intended. If you plan to be settlor and trustee, ensure that you complete all transfers of ownership as soon as possible.

Want to start planning your estate? Local attorney Andrew Szocka, Esq. provides thorough and speedy estate planning help in the Chicagoland area. To schedule a free initial consultation, visit the Law Office of Andrew Szocka, P.C. online or call the office at (815) 455-8430.

What Is a Pour-Over Will, and Do You Need One?

Posted May 18, 2022 by Law Office of Andrew Szocka

A pour-over will helps many people have peace of mind that after they are gone, their chosen relatives or friends will be protected. This popular and easy to create estate planning structure “pours over” all or some of your assets into a trust.

How Does a Pour-Over Will Work?

To create a pour-over will, you need to sign both (1) a will that includes special language, and (2) a trust. The will specifies that you leave all of your assets (or just some of them) to the trust. The trust can operate during your lifetime, and you can place assets into it then if you wish.

After you pass away, your executor and the trustee simply ensure that all your assets go straight into the trust. There is very little estate administration beyond that task (just filing taxes and the like). A pour-over will greatly simplifies the estate distribution process.

Once the assets move into the trust, your trustee should manage the assets and invest them prudently. Your chosen beneficiaries can receive distributions from the trust, on a regular schedule, on a discretionary basis, or for basic support needs.

Why Should You Create a Pour-Over Will?

Pour-over wills provide many benefits for people who create them, their executors, and their relatives who inherit. These benefits include:

  • Reducing the cost of probate or eliminating the need for it altogether
  • Simplifying the estate distribution process
  • Controlling distributions of your assets to relatives or other beneficiaries after your death
  • Potentially saving your estate tax and administration costs

Creating a pour-over will and accompanying trust also takes very little time or effort if you work with a knowledgeable lawyer. Before you meet with the lawyer, think about which assets you want to place in the trust, rather than giving them to heirs through direct bequests in your will. Also consider who you will choose as the trust beneficiaries and who would be best suited as a trustee. Giving some thought to these questions will help you prepare for the lawyer’s questions and get your estate plan made efficiently.

Want to start planning your estate? Local attorney Andrew Szocka, Esq. provides thorough and speedy estate planning help in the Chicagoland area. To schedule a free initial consultation, visit the Law Office of Andrew Szocka, P.C. online or call the office at (815) 455-8430.