On this page we will briefly discuss Estate Planning, Wills, and Trusts. We hope you find this information helpful in planning for your estate.
Estate Planning is the process of designing and implementing a plan to assure that a client’s assets pass to those persons or charities he wishes to benefit from them following his death, at the least possible cost and fewest procedural headaches to the client’s intended beneficiaries.
To be successful an Estate Plan, must take into consideration, who the client wishes to receive the assets, family conflicts likely to result post death, the needs of potential beneficiaries for assistance in management of assets, the financial stability of potential beneficiaries, estate and gift tax implications of the plan, and the mental abilities of potential beneficiaries. The plan should also take into consideration ways to minimize the cost of administration, such as possibly avoiding probate by the use of living trusts, using joint tenants with right of survivorship on deeds and accounts, and minimizing conflict among surviving family members.
Payne, Black & Pickelsimer, LLC has an active estate planning and probate law practice. Our firm has experience in the design and implementation of personal estate plans of all sizes and complexity, ranging from simple wills to complex estate and business succession planning for physicians, executives, business owners, and professionals. We also advise business owners, physicians and other persons in high risk occupations on Asset Protection Planning.
Payne, Black & Pickelsimer, LLC, also advises the parents of special needs children on how to structure their estate plan so as to prevent any inadvertent loss of benefits by their child while providing assets for their child’s care and needs. For more information on this go to our page entitled Disabilities and Special Needs.
Payne, Black & Pickelsimer, LLC frequently consults with the husbands or wives of disabled persons. Many times these individuals are in a nursing home, or facing nursing home care. We can show a concerned spouse how to structure their estate planning documents in a way that should they predecease their spouse, the assets can be used for the surviving spouse’s benefit without risking a loss of Medicaid or other public benefits.
If you are concerned your estate plan will not accomplish your goals please contact us. We can help you assess your estate planning needs and develop a plan to achieve your goals.
Wills and Trusts
WHAT IS A WILL?
A will is a legal document prepared to give instructions about how your property should be divided among your survivors after your death. In South Carolina,
for a will to be valid, it must be a written document, and signed by you before two unrelated witnesses. A will names one or more beneficiaries. These are the people or organizations that will benefit from your estate. A will describes your property, and specifies the amount or share that passes to each beneficiary. If you have minor children, a will is also the means by which to name your choice of a guardian for your children.
A will also names a person, called the personal representative, who is responsible for paying the bills and carrying out the instructions in your will. Most people name a close relative or friend as their personal representative.
A will is not final until an individual dies. Until that time, a will has no legal significance. A will may be altered, amended or revoked. Amendment is accomplished by a codicil or a new will. Revocation may be accomplished by either (1) writing revoked on the face, (2) drafting a new will, (3) drafting a revocation of will, or (4) destroying the will with the intent to revoke.
WHAT HAPPENS IF YOU DIE WITHOUT A WILL?
In South Carolina if an individual dies without a will, the South Carolina Code provides who will inherit their property. Essentially the state writes a will for you. In general, the statute provides as follows:
WHAT IS A TRUST?
A trust is a contract between at least two parties, a Settlor (sometimes referred to as a Grantor) and a Trustee (these two parties can be the same person and there can be multiple settlors and multiple trustees). Under the agreement the Settlor transfers assets to the Trustee, who agrees to hold the asset for the benefit of one or more designated persons or entities, who are referred to as beneficiaries (one of whom may be the Settlor or the Trustee). The Trustee is responsible for investing the assets in a reasonable manner or as directed by the trust agreement, and distributing the assets at the time directed in the agreement to the parties the agreement specifies. A trust can be inter vivos, i.e. created during life; or testamentary, i.e. created in a will. Further a trust can be either revocable or irrevocable. A revocable inter vivos trust is frequently referred to in seminars as a living trust.
When do you need a Trust? Trusts are valuable in a number of areas.
First, a “living trust” can minimize the cost of probating one’s estate (for a further discussion of Probate, see our Probate and Estate Administration Page). A living trust accomplishes this by converting what would be probate assets into non-probate assets. These assets can then past to trust beneficiaries without the involvement of the probate court. This benefit is not always worth the cost of establishing a trust, so you need to consult with a knowledgeable attorney. Our firm would welcome the opportunity to assist you in that regard.
Trusts are also valuable in structuring the management of assets for a person who cannot manage those assets, while making sure someone is legally obligated to apply those assets to the person’s needs. For example a person with disabilities may be incapable of managing assets. Someone needs to manage his or her assets and make sure they are applied to the disabled person’s needs. A trust can accomplish this.
Trusts can also be used to protect family members from creditors or others. For example, if a child is in bankruptcy a parent may wish to leave that child’s share of any inheritance to a Trust. The Trustee can use the assets for the child, but the creditors of the child cannot attach those assets. Likewise, if a child is in the middle of a divorce, it may be imprudent to leave assets to the child. The assets can be left in a Trust, and protected from the impact of the divorce while remaining available for the child’s support.
Trusts can be used to protect a family member from himself. A good example is substance abuse. We frequently find the parents of children with a substance abuse problem just do not know what to do. They love their child and want to leave him or her a fair share of the estate, but they know the child will simply spend the money on drugs or alcohol. By leaving the assets in a Trust for the benefit of the child the parent can arrange for the Trustee to use the assets for the child’s legitimate needs without giving him or her access to cash.
Trusts can be used to assure individuals that assets will end up in the hands of the persons they truly want to benefit. For example, grandparents may wish to assure that if a child dies any assets they left to that child will go to their grandchildren and not to a spouse who may remarry. A trust can give a child access to the assets they inherited, but assure that at the child’s death anything left will go to the grandchildren.
Similarly, in a marriage spouses frequently leave their assets to their surviving spouse outright. While that is certainly fine, when there are assets from a parent, or even if there are just significant assets and children are involved; a husband or wife may wish to make arrangements to assure that no matter what happens their share of the marital assets will go to their children. Late in life marriages are more frequent than ever. If for example a wife predeceases her husband, the husband may remarry. If the wife has left everything to her husband outright those assets could end up in the hands of a second spouse or go to the children of a second spouse. A trust can be used to give the surviving spouse access to the assets for support, health care, housing, education for the kids, etc. but assure that if the spouse remarries, the assets will go to children and not to a second spouse.
Finally, when a taxable estate is involved, Trusts can be used to minimize estate taxes. Taxes are discussed in more detail below.
Who can be a Trustee? Legally any competent person over the age of 18 can be a Trustee. However, in selecting a trustee one needs to be careful to choose someone who is up to the job, and can be trusted to follow the Settlor’s instructions and desires. A person may choose a responsible family member to be trustee, or he may choose a bank trust department, or he may choose a professional trustee, such as a lawyer. Which of these are right for any person, will depend on a number of factors. Payne, Black & Pickelsimer, LLC can assist you in weighing these factors, and making the right choice for you.
If you think you could benefit from the use of a Trust in your estate plan, please CONTACT US. We will be glad walk you through the options.
ESTATE AND GIFT TAXES:
One of the questions most frequently asked of Estate Planning Attorneys is “Will my heirs owe taxes when I die?” While estate taxes will not be an issue for most Americans, if you are interested in learning more about Estate and Gift Taxes, please see our page entitled “UNDERSTANDING ESTATE AND GIFT TAXES,” or contact us and we will be happy to discuss the issues with you.
IF YOU ARE INTERESTED IN DISCUSSING ESTATE PLANNING, WE CAN ASSIST YOU IN WORKING YOUR WAY THROUGH THIS COMPLEX AREA OF LAW.
The foregoing information is subject to change at any time, and other more complex rules may apply. Do not rely on this information for any action or inaction as you may not fully understand these topics. If you need help in this area seek the assistance of an attorney experienced in estate planning. This not intended as legal advice.