Last summer Patti and I – along with another couple we are friends with – travelled to Portland Oregon, exploring that wonderful region of the Pacific Northwest. While there, we all took the opportunity to white-water raft the White Salmon River, just across the Columbia River in the State of Washington. The White Salmon winds its way down a narrow tree-canopied canyon, making it a Class IV rapid that will take your breath away both in its beauty and ferocity.
As we approached the end of the day’s run our guide explained that there’s a twelve-foot waterfall that we could either portage around or shoot in the raft. After the four of us decided that we’d like to try to shoot the rapid rather than walk around it, our guide instructed that we’d have to paddle very hard until the last second, at which time he would yell “ALL IN!” Then all of us would have to dive into the middle of the raft until we reached the bottom of the falls.
When I inquired what chance we had of all making it through the falls without getting ejected out of the raft – he replied with an evil grin, “about fifty-fifty!” I tugged on my life-vest to make sure it was secure, and shot Patti a smile. She seemed calm, as did our friends, but we were all a bit nervous inside.
I will tell you that it was a real adventure. In the few seconds that it took the raft to descend the twelve feet, it felt like we were all enveloped in a thundering wall of water. The impact at falls’ bottom felt as if the raft and all of us were well under water before we sprang to the top, miraculously all intact and still secure in the vessel! We whooped with joy and high-fived our paddles together in celebration.
Other rafts weren’t so lucky, as the river poured several people into the basin’s cold water outside of their rafts. Everyone was fished out okay, with smiles on their faces and a new story to tell family and friends.
So how does this apply to estate planning aside from the fact that we better have had our wills up-to-date before plunging down the waterfall? Well I’ll tell you. The waterfall is actually a good metaphor for a “pour over will” that you may have heard of if you have a revocable living trust as a part of your estate plan.
Many are surprised to learn that wills remain an integral part of an estate plan even when you have a trust. “I thought a trust replaces the will.” I hear often.
The trust does replace the will – sort of. For the trust to fully replace a will, no assets can remain in the individual name of a decedent – they must all be transferred to the trust before death in order to avoid the probate process. But what happens if an asset or two is left out of the trust inadvertently?
In that case, the “pour over will” catches the asset and pours it into the trust – much like the waterfall pours into the river basin. Those assets will still have to be probated under the will to get them into the trust. So you can think of the pour over will as a safety net, catching assets that should have been put into the revocable trust during lifetime but weren’t, but ensuring that those assets are distributed pursuant to the trust.
It’s not the end of the world if a few assets have to be probated under a pour over will. If the total value of those assets is less than $75,000 then only a “Summary Probate Administration” is usually necessary. The Summary Probate is an abbreviated administration that doesn’t take a whole lot of time or expense.
If you happen to travel to Portland take a drive out the Columbia River Gorge (and see the many magnificent waterfalls along the way – and go to Hood River Oregon. Cross the bridge over the Columbia River where you can shoot the White Salmon River, and ask for George at Wet Planet Rafting Company. He was our excellent guide. Tell him that Craig sent you – but before you raft the falls make sure that you have transferred all of your assets to your trust and that your pour over will is ready – just in case!
©2014 Craig R. Hersch