I have explained why trusts need to be funded in order to avoid probate in the previous two posts. But simply having a funded trust does not mean that you don’t need to also have a will.
No one is perfect; while we all have the best of intentions to fully utilize the trust that we have created and to keep it funded, mistakes happen. Perhaps we purchase Whiteacre 5 years from now and forget to take title as trustee. Or we make an investment in a company, and similarly forget to take title as trustee. In those cases, even though a trust exists, a probate will occur…..
If there is no will directing that the assets that should have gone into a trust go into the trust after probate, the assets will be distributed to your heirs (perhaps not a desirable consequence). However, by having a “pour-over” will, even though the assets will have to go through a probate, they will, at the conclusion of the probate, be distributed to the trust, to be administered by the trustee in accordance with the directions of the creator of the trust.
Think of it is way: The trust is a receptacle intended to hold title to all of your assets. The “pour-over” will is the pitcher that fills the receptacle (trust) with those assets that had to be probated and were delivered to the trust after the probate.
A trust is not enough; you must also have a “pour-over” will to complement it.