The Pourover Will: Your Insurance Policy

I thought that the question posed here was a good one, but I didn't really care for the answer.  Here's what I would have said:

Q: Why is a Will necessary if you have a trust? Isn't a trust supposed to replace a Will?

A: There are two reasons why you need a Will even if you have a trust: (1) intestacy is worse than probate and (2) you just never know.  Let's talk about each of these reasons in turn.  (Note: Keep in mind that the Will we're talking about is a pourover Will, which says something like "If I die owning property in my own name (aka 'probate property'), I give such property to the trustee of my living trust.")

1. Intestacy is worse than probate.  Probate avoidance is generally a good idea, but because of the prevalence of independent administration (which I discussed a couple of days ago, here), it isn't the horrible experience it used to be.  What is (or can be) horrible is the idea of your property passing to people other than your intended beneficiaries.  This can happen if an individual owns probate property at her death and that property is not given away under a Will.  Such property would then pass to the individual's heirs (closest relatives) under Illinois law, regardless of whether the individual wanted them to receive the property.

An example: Mary is a widow, with three grown children: Adam, Beth and Carl.  Adam and Beth are great kids, but Carl has a drug problem, has previously stolen money from Mary, and has been in and out of prison.  Mary therefore executes a living trust leaving all of her property to Adam and Beth, but she fails to execute a Will.  Mary dies owning $150,000 in stock in her own name.  Under Illinois law, the stock is divided equally among Adam, Beth and Carl (each receives $50,000).

2. You just never know.  You may say, "I understand that owning probate property that isn't disposed of by my Will is a bad thing, but I won't own any such property when I die.  It's all held in trust or some other non-probate form."  To which I would respond, "You just never know."  What if you inherit property right before death, and you don't have time to put that property into your living trust?  What if you own some property in your own name, but forget to transfer it into your living trust?  A pourover Will doesn't cost much to prepare (maybe $500?), especially when you consider the risk of having your property pass to someone other than your chosen beneficiaries.  In other words, think of a pourover Will as an insurance policy.