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The Heritage Law Center, LLC Blog

Massachusetts Estate Planning with Pourover Trusts

POSTED ON: April 4, 2011

A pourover trust is actually a bit of a misnomer; in fact, it is a revocable living trust combined with a pourover will. Together, these documents allow people to shelter assets from nursing home costs while allowing for unfettered access to the money. The trust is completely revocable, can be amended at any time and does not have a look-back period.

When properly drafted, a pourover trust, also known as a “testamentary trust,” works like this: In the case of a married couple, generally one spouse will pass away before the other. Since it’s impossible to know who will go first, the spouses would create a joint husband and wife revocable trust. The assets that they want to be protected from the nursing home are placed into that trust. While both spouses are alive, they can use the trust assets as they wish, without any restrictions or involvement of their children. The trust states that when one spouse does die, some or all of the assets are to “pour over” to the estate of the spouse who has died. The deceased spouse’s will would then create a testamentary trust for the benefit of the surviving spouse to be used for the care, comfort and maintenance of the surviving spouse and to maintain the spouse in his or her accustomed standard of living. Usually, one or more of the children act as trustees. Since testamentary trusts are exempt from the nursing home, the assets in the trust are fully protected.

Pourover Trusts can be convenient estate planning tools because during the lifetime of both spouses the trust is revocable and the spouses have full access to the trust assets. The trust also allows for flexibility in that there is no requirement that all assets be placed into the trust. Whatever the couple wants to protect from the nursing home is put in the Pourover Trust, and the rest of the assets can be left out. While this approach does not avoid probate, it does keep the ultimate disposition of the funds private, rather than having all assets listed in court. A Pourover Trust can also be useful should you suddenly acquire property just before you die. With a pour-over will in place, any assets you might acquire would become part of your living trust by way of your pour-over will, and would be distributed according to the provisions of the trust.

However, a Pourover Trusts is not appropriate for every situation and you should consult with a Massachusetts estate planning attorney to determine if such a structure is in your family’s best interests.