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A court-supervised process beginning after your death to determine the validity of your will and monitor the execution of its provisions. Assets that would go through probate typically are those that you own individually (or as a tenant in common) and for which there are no beneficiary designations. Assets owned as joint tenants with rights of survivorship, with beneficiary designations, or titled in the name of an existing trust are designed to pass to others directly outside of your will and the probate process.
The trustee is an individual or an institution, such as a bank, that manages assets held in a trust for the beneficiary(ies) of the trust. The responsibilities of a trustee managing a trust upon your death generally are to:

  • Identify assets in the trust;
  • Manage the addition of any assets to the trust by your executor according to the terms of your will;
  • Invest the assets in the trust created; and
  • Distribute the assets outright to your beneficiaries and/or continue the trust or establish any new trust as specified in the trust documents.
A pour-over will works in combination with a revocable living trust. It instructs your executor to "pour over" assets not already in the trust at the time of your death into the trust. Your trustee will then distribute them as directed in your trust agreement. Assets added to a trust after your death by virtue of a pour-over will do not avoid probate. However, the pour-over will/trust combination typically affords increased privacy, since details on the disposition of your estate reside in the trust agreement, which in most states does not have to be filed with the probate court.
An executor (sometimes called an administrator or personal representative) is a person or an institution (like a bank) that you appoint in your will to carry out its provisions. If you die without a will or no executor named in your will survives you, a court appoints one for you to handle the assets that are subject to probate. An executor named in a will may choose not to act or may not be allowed to assume the role in some states if they are not a legal resident of that state. Make sure to account for these contingencies when selecting an executor.

Some typical duties of an executor include:
  • Locating all of your assets that are subject to probate;
  • Paying any outstanding debts you may have from your assets;
  • Preparing any reports required by the probate court;
  • Filing a final income tax return for you (or your surviving spouse can file jointly);
  • Filing a fiduciary income tax return for the estate, if applicable;
  • Paying all taxes and final expenses from your assets; and
  • Distributing the assets remaining in your estate according to the instructions in your will.

A revocable living trust is a legal instrument that establishes a trust that can be changed or dissolved at any time prior to your death. You usually fund the trust during your lifetime by taking assets you own personally and changing the title on the account into the name of the trust. When properly drafted and executed, it enables you to maintain full control over the assets within the trust while you are living. Upon your death, assets in the trust are not subject to probate, but they are included in your taxable estate. They will pass privately in most states* to the beneficiaries you've named in your trust documents.

Usually you serve as your own trustee, although you could name an institution or another individual to serve in this position. If finance is not your area of expertise, but you still wish to serve as trustee, you can enter into an agency agreement with a bank or other fiduciary to keep records, pay bills, distribute money, or make investment decisions—all subject to your approval.

Because you retain complete control over the trust, the earnings, gains, and losses on the trust's assets are reported on your personal income tax return.

A living trust should be combined with an abbreviated will called a "pour-over will" that has provisions for the executor to "pour" assets that remain subject to your will into the trust after your death to be disposed of as specified in the trust.

Pour-Over Will

A pour-over will is used to "pour over" all the assets subject to your will into your living trust after your death. The pour-over clause instructs that assets not already in the trust at the time of your death be added into the trust by the executor of your estate and disposed of by the trustee as directed in your trust agreement.

Assets added to a trust after your death as directed by a pour-over will do not avoid probate. However, the combination of a pour-over will and a trust still affords increased privacy, since the most detailed information about the disposition of your estate usually resides in the trust agreement, and trust agreements in most states do not have to be filed with the probate court.*

*Some states have laws that may require trust documents to be publicly filed. Check with your estate planning attorney for information about your state.
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