Creating a comprehensive estate plan offers peace of mind, knowing that you will manage your assets according to your wishes. Two powerful tools for estate planning are a living trust and a pour-over will. Each serves a distinct purpose, but together, they provide numerous benefits, especially in terms of avoiding probate and simplifying the transfer of assets.
Living trust benefits
A living trust holds your assets during your lifetime and distributes them upon your death. One main benefit of a living trust is that it avoids probate. In North Carolina, probate is a court-supervised process for distributing a deceased person’s assets, which can be time-consuming and expensive. With a living trust, your assets pass directly to your beneficiaries without the need for probate, saving both time and money.
Additionally, a living trust offers privacy. Probate proceedings are public, so anyone can see the details of your will. A living trust, on the other hand, is a private document, and its terms remain confidential.
Pour-over will benefits
A pour-over will complements a living trust by ensuring that any assets not already placed in the trust ‘pour over’ into it after your death. If you acquire new property or assets and forget to transfer them into the trust, the pour-over will ensure that these assets end up in the trust, avoiding the need for separate probate proceedings.
While a pour-over will itself must go through probate, its purpose is to funnel assets into the living trust. This minimizes the need for a separate probate process for those assets.
By combining these two estate planning tools, you ensure that your estate is handled efficiently and according to your wishes.