Combining a Testamentary Trust With a Pour-Over Will in Tampa

While researching your estate planning options in Tampa, you might have come across two concepts: Testamentary trusts and pour-over Wills. Both of these estate planning strategies offer their own unique benefits, but you can also combine both into a single strategy. How would this work in practice, and why would you want to create a pour-over Will and a testamentary trust? You might want to explore these questions with an experienced estate planning lawyer.

What Is a Pour-Over Will? 

When you establish a trust, you need to fund it by transferring assets into it. But what happens if you accumulate new assets after transferring your existing wealth into the trust? These “leftover” assets could be significant upon your passing – especially if an investment skyrockets over a short period or you experience other forms of sudden financial success.

A pour-over Will states that all remaining assets left outside your trust should be transferred into that trust upon your passing. This ensures that your trust will “catch” all of your assets upon death – even if you never transfer them into the trust during life.

 What Is a Testamentary Trust? 

A testamentary trust represents a plan to create a trust in the future. While it is not a “real” trust in and of itself, it provides a set of instructions to create a trust immediately after your passing. This type of trust is popular among younger parents with minor children and those who would rather not pay the legal fees associated with a new trust. Since a testamentary trust only goes into effect after your passing, your estate has to pay these legal fees.

 Why Would I Want to Combine a Testamentary Trust With a Pour-Over Will? 

Both pour-over Wills and Testamentary trusts are simply sets of instructions on a Last Will and Testament. Although both involve trusts, neither strategy represents a “real” trust. As a result, both strategies can be implemented fairly easily with help from an experienced estate planning lawyer. Since this only involves adjusting your Will, both processes are more affordable than establishing a legitimate trust.

Both strategies are helpful for Florida residents who want to create their estate plans sooner rather than later. Testamentary trusts are especially popular among young parents, and these parents could accumulate many more assets throughout their lives. As a result, they may need to continuously update the instructions for their testamentary trust to reflect their growing wealth. A pour-over Will addresses this problem by “pouring” these excess assets into the trust without any complicated steps or modifications during life.

Can an Estate Planning Lawyer in Tampa Help? 

Testamentary trusts and pour-over Wills offer many potential benefits, but these benefits are highly situational. One or both of these strategies may make sense for your family, but there is no way to tell until you consider your unique circumstances. You can discuss these circumstances with experienced estate planning lawyers at Knudsen Law to determine whether to combine a pour-over Will and a testamentary trust. Our offices are conveniently located in Tampa, Seminole, and New Port Richey – so schedule your consultation to get started today.

Sources: 

leg.state.fl.us/statutes/index.cfm?App_mode=Display_Statute&URL=0700-0799/0736/Sections/0736.1106.html

floridabar.org/public/consumer/pamphlet028/