Pour-Over Gifts/Trusts

Question 1

What is a pour-over gift? What are its benefits?

Answer 1

• Testamentary gifts (gifts made in a will) to an existing revocable trust
• avoids will formalities in the trust
• trusts can be changed during the lifetime of the settlor in ways that are somewhat easier than changing a will is

Question 2

Key requirements for a pour-over gift to a trust to be valid (2)

Answer 2

• trust must be in existence before; OR

- must be executed concurrently with the will

Question 3

What is the res requirement of a pour-over trust?

Answer 3

Pour-over gifts are valid even if the trust was unfunded, or only partially funded, during settlor’s lifetime. Normally you need trust res– here, the trust is allowed to get res @ the moment of settlor’s death and that is viewed as an okay exception to the res requirement.

Question 4

Life insurance proceeds as a pour over?

Answer 4

Two ways an insured can make life insurance proceeds payable to a trust:

(1) create an unfunded revocable insurance trust and name the trustee of the trust as the policy beneficiary
(2) have the trust be a testamentary trust and have the life insurance policy contract name be “the trustee named in my will” as the policy beneficiary