Recently another attorney outlined the following problem. Her clients are determined to avoid having their estates probated at all costs. Because of this, they have practically forbidden her to prepare pourover wills to go with the separate revocable trusts she is preparing for them.

She explained that the sole purpose of the pourover wills is to "catch" any property or assets which might not make it into their trusts during their lifetimes, but they still insist they do not want her to prepare the wills for them.

Her concern is whether she commits malpractice by complying with their wishes and not including pourover wills as part of their plans.

The attorney also mentioned that the wife has thousands of dollars worth of jewelry that she wants to pass to specific beneficiaries through her trust and asked if this could be done.

She posed her questions as follows: "How do you leave specific bequests via a trust and not a will?" and "is there a better way to explain the need for a will to this client?"

These questions are not that unusual, whether coming from clients or from a professional colleague.

Before answering these questions, it is worthwhile to cover the basics. Let’s start with the second question first.

The attorney should explain to the clients that if they properly title all their property in the names of their respective trusts, there won't be anything to probate and the wills become superfluous.

The pourover will is nothing more than a "just in case" escape valve–"just in case" something turns up after their deaths that requires probate. You would be surprised how many times we find inherited property, a dormant bank account or CD, or an income statement from a long forgotten mineral interest that never made it into the trust.

Even if the trust is properly funded when it is created, you need to be consistent thereafter. If you buy a new car, you need to buy it in the name of the trust, etc. And no matter how conscientious you are about retitling assets into the trust, there are often items, such as checks received after death which are payable to the decedent individually, that require probate administration.

I don’t know if my answers are any better than those of the attorney in question, but a pourover will is definitely needed and the failure to prepare one could easily be seen as malpractice. At a minimum, the attorney should document her advice in a memorandum and have the clients sign acknowledging that they were told of the necessity for the wills and chose not to execute them.

Okay, now we can look at the first question. The answer is that, of course, tangible property can be held in trust. I cannot think of more than a handful of clients in some three decades of practice who haven’t wanted to pass specific items or heirlooms to specially named beneficiaries.

When I prepare revocable trusts, I routinely include a blanket bill of sale or assignment of all untitled tangible and intangible personal property into the trust.
 

With non-taxable estates, it is possible to do a backup will that distributes property out to the residual beneficiaries, rather than using a pourover will. This may avoid some retitling costs, but you lose the confidentiality protection you have with a trust. Whatever gifts you make in a will become a matter of public record when it is probated, so everyone will know what you gave to whom. If you don’t believe me, just look at a copy of Elvis Presley’s will or that of another famous individual, United States Supreme Court Chief Justice Earl Warren, and you will see what I mean.
 

A will is a public record and "muniment of title" that covers everything you own individually, including the kitchen sink. It can be as short as one page if all you want to do is pour your individually owned property over into your trust, although most are slightly longer than that. If clients won't agree to execute these wills, they do so at their own peril.

This was the question I wanted so badly to ask of the clients, but it wasn’t my place to do so. It sounds to me as if they are the victims of one of the "horrors of probate" seminars that occasionally travel around our state. In many situations, especially when clients are older, placing everything into their revocable trust is the easiest way to deal with the situation. It not only provides for disposition of their property after their death, but provides a formal mechanism for managing it during their lifetimes should they become incapacitated or just want someone else to handle their day-to-day routine affairs.
 

By the same token, a pourover will is the right thing to do, since its virtually impossible for them to guarantee they will have correctly retitled everything they own into their trust as of their deaths.

Perhaps the best way to convince them to do a pourover will is to tell them what will happen to their property that is not in their trusts if they DON'T have a will. Hmmm–that sounds like a topic for next week.