Right in the midst of celebrating new life and the birth of their first child, many parents find themselves contemplating their own mortality.
If you are a new parent, naturally, you want to make sure that if anything happens to you before your child is grown that your child will be properly cared for and your assets will be there to support them. Figuring out how to make that happen, however, can be confusing.
In conjunction with a trust, a pour-over will can make things easier
A pour-over will is often used in conjunction with a previously established trust as part of an estate planning strategy. It allows assets that are not specifically designated to be transferred directly into the trust during the individual’s lifetime or upon their death. The grantor’s will includes a pour-over provision, which states that any assets not specifically designated in the will should be “poured over” into the trust upon the grantor’s death.
This can be excellent if you’re worried about the work that can go into keeping a trust updated and properly funded while your family is still growing and your life (and assets) are in flux.
This can help new parents relax about their child’s future for several reasons:
- It offers asset protection: A trust can provide better protection for your assets, which can help ensure they’ll be there for your child’s future – even if you haven’t formally transferred all of them to the trust at the time of your death.
- You can preserve your family’s privacy: When assets are transferred to the trust, they are not considered part of the probate estate, which means that they’re protected from prying eyes.
- It offers better control over the future: With a pour-over will and a trust, parents can maintain control over how their assets are managed and distributed to their children. They can designate someone they know or a professional trustee to handle the trust assets until the children reach a specified age or milestone, ensuring the assets are managed responsibly.
It’s important to note that estate planning goals can vary greatly based on individual circumstances, including the size of the estate and your family dynamics. Experienced legal guidance is crucial to determine whether a pour-over will and a trust are right for your needs or whether something else is more appropriate, especially if you’re particularly concerned about protecting your precious child’s future.