Estate Planning

5 Estate Planning Myths Debunked

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Common Estate Planning Myths

Developing an estate plan involves a process that people tend to postpone until their golden years, their kids enter college, retirement, or the birth of grandchildren.  While these significant life-changes certainly merit reviewing and updating an estate plan, the important financial, health, and family planning goals at the heart of the process are too critical for procrastination.  The notion that putting off decisions about these fundamental issues will not cause problems constitutes just one of many estate planning myths.  We attempt to set the record straight about some of these common misconceptions below:

Estate Planning Myth #1: The only people that need an estate plan are those who are extremely wealthy.

While affluent individuals cannot afford to be without an estate plan, adults from all walks of life can benefit from some form of estate planning.  Although the specific needs of people might differ depending on their assets, family relationships, financial circumstances, legacy succession objectives, and other relative considerations, individuals with modest estates can benefit from financial planning for retirement and college tuition for their children.  New parents can have a will prepared to ensure that a court knows who they want to be their children’s guardian if something should happen to them.  The point to understand is that the scope of estate planning issues involves much more than legacy succession.

Estate Planning Myth #2: Once you have had your estate plan prepared, you can lock the documents away until they are needed.

Although many people see estate planning as an objective to be accomplished, the documents and plan should be periodically reviewed and updated.  In addition to having your estate planning lawyer revisit your situation every 3-5 years, major life events also merit a re-evaluation process.  Life events that might justify an “estate planning checkup” include:

  • Birth or adoption of a child
  • Divorce
  • Remarriage
  • New grandchildren
  • Adoption
  • Retirement
  • Sudden changes in net worth
  • Family estrangement
  • Changes in charitable priorities
  • Blending of a family
  • Relocation to a new state
  • Inheritance of significant assets
  • Founding or development of a business
  • Changes in the law (e.g. changes in the Internal Revenue Code)

Myth #3: Estate planning is a task for people in their golden years.

An individual’s estate planning needs and priorities will change throughout their life, but all adults can benefit from at least a simple estate plan.  Young adults can construct an estate plan to manage their financial affairs or to ensure medical treatment conforms to their priorities in the event of physical or mental incapacitation.  Even teenagers going off to college might want to give their parent a power of attorney to access bank accounts or correspond with medical insurance carriers and physicians. As individuals age and develop larger and more diverse assets, their estate planning needs and objectives will change, which will necessitate a more sophisticated plan.

Myth #4: If I have a living trust, I do not need a will.

While a living trust can avoid the costs and delay associated with probating a will, a comprehensive estate plan should include other documents.  A living trust provides benefits, such as privacy regarding financial affairs and prevention of the delays and costs associated with the probate process.  However, a pour-over will still be needed to cover assets that are never transferred into the trust.  A living trust also does not address medical or financial decisions if you become incapacitated.

Myth #5: A spouse can be disinherited through a will in South Carolina.

When a spouse objects to the terms of a will, the husband or wife can choose to take a spousal elective share of one-third of the estate plan, which includes assets transferred to a trust.  The surviving spouse can exercise this right by filing a petition for the elective share in the Probate Court and the executor of the will within 8 months of the death of the decedent or 6 months of the probate of the will, whichever date occurs later in time.

Common Estate Planning Questions:

The attorneys at the De Bruin Law Firm understand that estate matters are emotional and stressful. We are available to provide objective advice and guidance to our clients. To schedule a free consultation, call864-982-5930 or use the link below.

ESTATE PLANNING LAW SERVICES

The De Bruin Law Firm is dedicated to providing quality legal services throughout South Carolina.

If you’d like to speak with one of our attorneys call us at (864) 982-5930 or use the button below.

Our Attorneys

Estate Planning and Criminal Defense

Aaron De Bruin, Esq.

Estate Planning and Business Law

Gary De Bruin, Esq.

De Bruin Law Firm

Helping you plan. Helping you prepare. Helping you Protect.

The attorneys at the De Bruin Law Firm understand that Estate Matters can be difficult to understand and plan for. We are available to provide our clients advice and guidance during the Estate Planning Process. To view common fees associated with an Estate Plan please call us at 864-982-5930 or use the link below to view some of our common Estate Planning Fees.

What is a special needs trust?

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Trusts are one of the main tools used by estate planning attorneys. Setting up a trust can help ensure that your assets go to your loved ones as efficiently as possible, and in a way that makes sense given the specific situation of the grantor and the beneficiary. When you create a trust, you are taking assets and placing them under the control of one person or entity, but for the benefit of a separate person or persons. One general benefit to trusts is that they avoid probate. Probate is the court process used to determine if a will is legitimate and to distribute a person’s assets to the beneficiaries. Because probate can be expensive and take a lot of time to complete, many people opt to create trusts that allow their loved ones to avoid probate and have immediate access to the funds and assets in question.

What is particular to a special needs trust?

A special needs trust is a trust created for the benefit of a person who has a disability or mental illness that makes them incapable of handling their own finances. The money and assets left in the trust will be managed by someone other than the beneficiary, but are only permitted to be used for the beneficiary. It might be that the trust can only be used for certain specific things, such as proving housing, food, medical care, paying a caregiver, or other related needs.

How will leaving assets in the trust impact one’s eligibility for government benefits?

Many individuals with special needs benefit from government programs such as Social Security and Medicaid. If an individual using these programs were to receive a lump sum of money, their ability to collect these benefits could be impacted. Many times though, if the assets are in a trust, and the individual does not have free use of them, the eligibility for government assistance will not be negatively impacted. The trust itself might have to make it clear that the funds are supplemental to the government benefits that the individual receives.

Who gets to decide how the assets are used?

When creating a trust, the grantor can name a trustee who can manage the funds for the beneficiary. Oftentimes, the trustee will be a trusted family member or friend who is responsible with money and capable of making the necessary decisions and arrangements to ensure that the beneficiary is getting the support they require from the trust assets. In other situations, though, the trustee can be an entity such as a bank. If the selected trustee cannot perform the duties required of him or her, a court can appoint a trustee.

If you live in South Carolina and have questions regarding how to create a special needs trust, contact the experienced estate planning attorneys at the De Bruin Law Firm. There are many options for how to set up a trust, and your attorney will be able to explain the different possibilities to you so that you can make the best decisions for your family.  Call us today at 864-982-5930 to learn more about your legal options.

The attorneys at the De Bruin Law Firm understand that estate matters are emotional and stressful. We are available to provide objective advice and guidance to our clients. To schedule a free consultation, call 864-982-5930.

South Carolina Probate Process Part 2

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Locating the assets and debts of an estate is one of the largest undertakings in the probate process. It can be quite challenging to track down all of the assets a decedent possessed, and it can be even more challenging to figure out all of the debts that the deceased may have owed.

Within 90 days of the executor’s appointment, the inventory and appraisement form must be filed. This form provides a summary of the estate to the court. This form must also be filed with the South Carolina Department of Revenue and Taxation in some cases.

To complete the inventory and appraisal, it may be necessary to hire a professional appraiser to establish the fair market value of certain pieces of property. For example, assistance may be needed to properly value pieces of artwork. A real estate appraiser may be necessary to provide the value of the decedent’s home. The assets will be valued as of the date of death. Once the inventory and appraisal is completed, a copy is typically sent to the tax assessor’s office.

Creditors and Outstanding Debt

The debts that were identified must be paid. However, the executor should not pay claims that were not filed properly or that missed the filing deadline. Creditors have 60 days from the date they received notice of the deceased’s death or eight months from the date the notice was published in the newspaper to file their claims with the estate. If a creditor misses these deadlines, the creditor will lose the right to recover the debt from the estate.

Creditors respond to the notice or newspaper publication by filing a notice of claim with the probate court and with the executor. The executor will then review the claims and state whether the claims will be paid or disallowed. If disallowed, the executor must tell the debtor that the claim will be barred if the debtor does not act within 30 days.

Depending on the value of the estate, tax returns may need to be filed. These returns must be filed within nine months of the death of the decedent. If these tax returns are not filed properly, the estate may be penalized, with interest. In some cases, the executor may become liable for these amounts.

Closing the Estate

Once all creditors have been notified and the applicable waiting periods have passed, the executor may begin the process of closing the estate. To close the estate, the executor must complete a final accounting that shows how the assets were distributed. Additionally, a proposal for distribution form must be filed, which provides the names of the beneficiaries of the estate, as well as the amounts or assets that have been provided to each.

A petition for settlement will also be filed. The petition for settlement essentially seeks the probate court’s permission to approve the distribution of the estate and the accounting. The petition for settlement also asks the court to discharge the executor.

Clearly, the probate process in South Carolina may be a lengthy one. Disputes may arise at any point before the estate is closed, which may become expensive court battles. A strong probate attorney is a valuable asset in these claims.

The SC Probate Process

The administration of an estate following a death is a complex undertaking, often involving numerous legal and financial steps. In South Carolina, the SC probate process is overseen by the probate court and is designed to ensure that the decedent’s assets are collected, debts and taxes are paid, and the remaining property is distributed according to their will or state law.

While the entire SC probate process requires careful attention to detail and adherence to strict timelines, one of the most significant and often challenging phases is the initial identification and valuation of the deceased’s assets and the discovery and management of their outstanding debts.

The Critical Task of Locating Assets and Debts

The foundation of any successful SC probate process lies in a complete and accurate understanding of everything the decedent owned and owed at the time of their death. This is far from a simple task.

Decedents may have held assets in various forms and locations, some of which may not be immediately obvious. Similarly, debts can range from clearly documented loans to less apparent obligations. Thoroughly tracking down all assets and liabilities is a monumental undertaking and forms the basis for all subsequent steps in the probate process.

Assets can include a wide array of possessions: real estate (homes, land), tangible personal property (vehicles, furniture, jewelry, art, collectibles), intangible personal property (bank accounts, investment accounts, stocks, bonds, retirement funds like IRAs and 401(k)s, life insurance policies, business interests), and even digital assets (online accounts, cryptocurrency, digital media).

Discovering these can involve sifting through personal papers, reviewing mail, checking safe deposit boxes, contacting financial institutions, and even exploring online presence. It requires a meticulous approach, as overlooked assets can lead to incomplete distribution, and undiscovered debts can create significant problems later in the process.

Identifying debts is equally important and potentially more sensitive. Common debts include mortgages, car loans, credit card balances, personal loans, medical bills, utility bills, and potentially even outstanding taxes.

Executors must be proactive in seeking out potential creditors. This can involve reviewing recent bills, checking credit reports (with proper authorization), and responding to claims filed after formal notification procedures are initiated. Failing to identify and properly address valid debts can expose the estate, and potentially the executor, to liability.

The Inventory and Appraisement

Within ninety days of the executor’s formal appointment by the probate court, a critical document known as the Inventory and Appraisement form must be filed. This document serves as the official list of all assets owned by the decedent at the time of their death, along with their estimated fair market value.

It provides the court, beneficiaries, and creditors with a clear snapshot of the estate’s composition and value. In some instances, depending on the size and nature of the estate, a copy of this form may also need to be filed with the South Carolina Department of Revenue and Taxation.

Completing the Inventory and Appraisement accurately often necessitates professional assistance, particularly when dealing with assets that do not have a readily ascertainable market value. For example, valuing unique or valuable pieces of artwork, rare collectibles, or complex business interests typically requires the expertise of a qualified appraiser specializing in those specific areas.

Similarly, real estate, often the most significant asset in an estate, will require a formal appraisal by a licensed real estate appraiser to determine its fair market value as of the decedent’s date of death. The valuation date is crucial; assets are valued based on their worth on the day the individual passed away, not at the time of the appraisal or filing. Once the inventory and appraisal process is finalized and the form is filed with the court, a copy is typically also sent to the local tax assessor’s office for their records.

Managing Creditors and Outstanding Debt

Once the executor has a clearer picture of the estate’s assets and potential liabilities, the process of addressing outstanding debts begins. It is imperative that the executor follows the legally prescribed procedures for notifying creditors and handling claims. While the executor has a duty to pay valid debts, they must not pay claims that were not filed correctly or that missed the statutory deadlines.

The SC probate process provides specific timeframes within which creditors must file their claims against the estate. Creditors who receive actual notice of the deceased’s death have sixty days from the date they received that notice to file their claim with the probate court and the executor. For creditors who do not receive direct notice, a general notice is typically published in a local newspaper. These creditors have eight months from the date this notice was first published to file their claims. If a creditor fails to file their claim within the applicable deadline, they generally lose the legal right to recover that debt from the estate.

Creditors respond to the notice (either direct or published) by filing a formal notice of claim with both the probate court overseeing the estate and directly with the executor. The executor is then responsible for reviewing each claim received. This review involves verifying the validity of the debt and ensuring the claim was filed correctly and on time. Based on this review, the executor will either allow the claim (indicating it will be paid) or disallow it. If a claim is disallowed, the executor must formally notify the creditor of this decision. Importantly, the executor must also inform the creditor that their claim will be legally barred (meaning they cannot pursue payment from the estate) if they do not take further legal action (such as filing a lawsuit) within thirty days of receiving the notice of disallowance. This strict timeline protects the estate from stale or improperly filed claims.

Addressing Tax Obligations

Estate administration also involves navigating potential tax obligations. Depending on the size and complexity of the estate, various tax returns may need to be filed. This can include the decedent’s final personal income tax return (covering the period from the beginning of the tax year to the date of death) and potentially a federal estate tax return (Form 706) if the gross value of the estate exceeds a certain threshold, which is adjusted annually. State inheritance or estate taxes may also apply, though South Carolina currently does not have a state-level estate or inheritance tax.

These tax returns have specific filing deadlines, most notably the federal estate tax return, which must be filed within nine months of the decedent’s date of death, unless an extension is requested. Accurate and timely filing is critical. If these tax returns are not prepared and filed correctly, the estate can face significant penalties and interest charges.

In some circumstances, particularly if the executor acts negligently or improperly distributes assets before satisfying tax liabilities, the executor may become personally liable for these unpaid amounts. Seeking guidance from a tax professional or an attorney with expertise in estate taxation is highly recommended to ensure compliance.

Final Accounting and Distribution

Once the periods for creditors to file claims have expired and all valid debts, taxes, and administrative expenses have been paid, the executor can begin the process of formally closing the estate. This final phase involves demonstrating to the court that the executor has properly managed the estate and is ready to distribute the remaining assets to the rightful beneficiaries.

A key step in closing the estate is the completion of a final accounting. This detailed document provides a comprehensive summary of all financial transactions that occurred during the estate administration. It lists all assets that came into the estate, all income received, all expenses paid (including administrative costs, debts, and taxes), and ultimately shows the remaining balance available for distribution. This accounting must be clear and accurate, providing a transparent record of the executor’s management.

Alongside the final accounting, the executor typically files a proposal for distribution form. This document outlines exactly how the remaining assets will be distributed to the beneficiaries. It lists the names of all individuals or entities who are to receive property from the estate, specifying the particular assets or monetary amounts each beneficiary is entitled to receive according to the will or the laws of intestacy if there was no will.

Finally, the executor files a petition for settlement with the probate court. This petition formally requests the court’s approval of the final accounting and the proposed distribution plan. By filing this petition, the executor is essentially asking the court to review and bless their administration of the estate. The petition for settlement also typically includes a request for the court to formally discharge the executor from their duties, releasing them from further responsibility for the estate once the distribution is complete and approved.

Challenges, Disputes, and the Value of Legal Counsel

It is important to recognize that the probate process in South Carolina, while following a defined legal framework, can be lengthy and fraught with potential complications. Disputes can arise at almost any stage before the estate is officially closed. Common sources of conflict include challenges to the validity of the will (will contests), disagreements over the identification or valuation of assets, disputes with creditors over the validity or amount of a debt, or conflicts among beneficiaries regarding the interpretation of the will or the proposed distribution of assets.

When disputes arise, they can escalate into expensive and time-consuming court battles, significantly delaying the final resolution of the estate. Navigating these legal challenges requires a thorough understanding of probate law and court procedures.

Given the complexities involved in the SC probate process, like managing creditor claims, fulfilling tax obligations, and navigating potential disputes, having a strong and experienced probate attorney is an invaluable asset throughout the entire process.

An SC probate attorney can provide guidance on the proper legal procedures, assist in the meticulous task of asset and debt discovery, advise on handling creditor claims, ensure compliance with tax laws, prepare and file all necessary court documents, and represent the estate’s interests if disputes arise. Their in-depth knowledge (of the probate process) can help streamline this process, minimize potential liabilities, and ultimately ensure that the decedent’s final wishes are carried out efficiently and effectively.

Do You Need a Probate Attorney in South Carolina?

If you have been appointed as executor of an estate, or if you have concerns about the handling of a loved one’s estate, contact the De Bruin Law Firm today for a free case review. Our attorneys are experienced in probate law an have handled estates of all sizes.

The attorneys at the De Bruin Law Firm understand that estate matters are emotional and stressful. We are available to provide objective advice and guidance to our clients. To schedule a free consultation, call 864-982-5930 or use the link below.

ESTATE PLANNING LAW SERVICES

If you have a legal matter related to Estate Planning, Business Law, or a Real Estate Transaction contact our office to speak to one of our attorneys.

Our Attorneys

Estate Planning and Criminal Defense

Aaron De Bruin, Esq.

Estate Planning and Business Law

Gary De Bruin, Esq.

De Bruin Law Firm

Helping you plan. Helping you prepare. Helping you Protect.

The attorneys at the De Bruin Law Firm understand that Estate Matters can be difficult to understand and plan for. We are available to provide our clients advice and guidance during the Estate Planning Process. To view common fees associated with an Estate Plan please call us at 864-982-5930 or use the link below to view some of our common Estate Planning Fees.

South Carolina Probate Process Part 1

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When an individual dies, typically, at least some of the property that individual owned will be subject to probate. This means that the property must go through a formal probate process to be distributed according to the individual’s will. Even if the individual did not have a will, that individual’s property may still pass through probate.

Understanding Probate in South Carolina

Probate is the legal process through which a deceased person’s assets are identified, gathered, debts are paid, and the remaining property is distributed to their heirs or beneficiaries. It is a necessary step to ensure the orderly transfer of wealth and to validate the will, if one exists. In South Carolina, like many other states, the probate court oversees this process, ensuring that the deceased’s wishes are honored and that all legal requirements are met. While the concept might seem straightforward, the actual process can be complex, involving numerous legal procedures and strict timelines. 

What Property is Subject to Probate in South Carolina?

In South Carolina, a wide array of assets can be subject to probate. This typically includes any property owned solely by the deceased at the time of their death that does not have a designated beneficiary or a joint owner with rights of survivorship. 

Common examples include: 

  • Land, houses, and other real estate held in the individual’s name alone.
  • Vehicles, such as cars, boats, and motorcycles, also fall under this category if they were solely owned.
  • Personal effects, like antiques, jewelry, art, and other valuable collectibles, are also part of the probate estate.
  • Financial assets are frequently subject to probate, including stocks, bonds, mutual funds, and bank accounts (checking, savings, CDs) that do not have “payable on death” (POD) or “transfer on death” (TOD) designations or joint ownership.

 

Unless all of the individual’s property was meticulously placed into a revocable living trust, or otherwise structured to avoid probate, the estate will almost certainly need to go through the probate process to legally transfer ownership to the rightful heirs.

What Property Is Exempt from Probate?

While many assets are subject to probate, it’s equally important to understand what property is typically exempt from this process. Assets that pass directly to a named beneficiary or joint owner generally bypass probate. This includes life insurance policies and retirement accounts (like 401(k)s, IRAs) where a beneficiary has been explicitly named. 

Upon the death of the account holder, these funds are paid directly to the designated individual without court intervention. Similarly, property held in joint tenancy with right of survivorship, such as a joint bank account or real estate owned by two or more people where the surviving owner automatically inherits the deceased’s share, avoids probate. 

Assets held within a properly funded revocable living trust are also exempt because the trust, not the individual, legally owns the assets. These non-probate assets can significantly streamline the estate settlement process and provide immediate access to funds for surviving family members, highlighting the importance of proper estate planning.

What is the Role of the Executor in South Carolina?

The executor plays a pivotal role in the probate process, acting as the personal representative of the deceased’s estate. This individual is typically named in the will, but if no executor is designated or if the named executor is unable or unwilling to serve, the probate court may appoint one. 

The executor’s responsibilities are extensive and legally binding, requiring diligence and careful attention to detail. Their primary duty is to ensure that the deceased’s final wishes, as expressed in their will, are carried out, or if there is no will, that the estate is distributed according to South Carolina’s intestacy laws. This role involves significant legal and financial responsibilities, making it crucial for the chosen individual to be trustworthy and capable of managing complex administrative tasks. The executor is accountable to the court and the beneficiaries, and any missteps can lead to legal complications.

Initial Steps for the Executor

The first crucial step for the individual named as executor is to meet with the clerk of the probate court in the county where the deceased resided. This initial meeting formally begins the probate process. During this meeting, the executor must present several vital documents. An original copy of the deceased’s will, if one exists, is paramount, as it outlines the deceased’s wishes regarding their property distribution. 

The death certificate is also a mandatory document, serving as official proof of death. Additionally, the executor must provide comprehensive contact information for all known relatives and heirs, as they are interested parties in the estate and must be notified of the probate proceedings. This initial filing allows the court to formally recognize the executor’s authority and initiate the legal framework for administering the estate. Without these foundational documents, the probate process cannot proceed.

Safeguarding Estate Assets in South Carolina

Once the court has officially appointed the executor, a critical responsibility is to ensure that all of the assets within the estate are identified, noted, and meticulously safeguarded. This step is vital to prevent loss, theft, or unauthorized access to the deceased’s property during the probate period. 

For instance, if the estate includes multiple bank accounts, the executor must take immediate steps to ensure that no unauthorized withdrawals are made from these accounts until the probate process is complete and the assets can be legally distributed. This might involve notifying financial institutions of the account holder’s death and requesting that the accounts be frozen or transferred into an estate account. 

Similarly, physical assets like real estate, vehicles, and valuable personal property must be secured. This could mean changing locks on properties, ensuring vehicles are stored safely, and inventorying valuable items to prevent their disappearance. The executor is legally obligated to protect the estate’s value for the benefit of the heirs and creditors.

Locating All Assets

One of the most challenging tasks for an executor can be locating all of the deceased’s assets. If the deceased maintained thorough and organized records, the executor is indeed fortunate, as these records may clearly list all accounts, investments, and pieces of property owned. However, this is often not the case. 

A good starting point when records are scarce is to obtain a credit report for the deceased. This report can reveal open bank accounts, lines of credit, credit cards, and other financial relationships that might indicate hidden assets. Next, a careful review of the deceased’s past tax returns can be highly illuminating. Tax returns often show receipts of interest, capital gains from investments, dividends from stocks, rental income, or business income, all of which can point to specific financial accounts or properties. 

If, after these steps, there is still uncertainty about whether all assets have been located, or if the estate is particularly complex, hiring a private investigator may be a necessary measure to conduct a more thorough and comprehensive search. This can uncover assets that were not immediately apparent from standard financial documents.

Unclaimed Property Search in South Carolina

Beyond personal records and financial statements, South Carolina offers an additional valuable resource for locating potential assets: the “Unclaimed Property Search” available on the state treasurer’s website (www.treasurer.sc.gov). This program serves as a central repository for funds and property that companies or other agencies have been unable to return to their rightful owners. 

This can include forgotten bank accounts, uncashed checks, dormant safe deposit box contents, utility deposits, insurance proceeds, and even stock dividends. When these entities cannot locate the owner, they are legally required to report and remit the unclaimed property to the state’s unclaimed property program. It is a straightforward process to conduct a search on the website using the deceased’s name, and it is a crucial step for any executor to perform, as it can uncover significant assets that might otherwise remain undiscovered and undistributed to the heirs.

Identifying Debts and Liabilities

Just as important as locating assets is the executor’s responsibility to identify any debts or liabilities the deceased had at the time of death. This can be equally, if not more, difficult than finding assets, as creditors may not be immediately known. South Carolina law provides a specific procedure for notifying potential creditors. 

The executor is required to publish a notice in a local newspaper once a week for three consecutive weeks, formally announcing the death and inviting creditors to file claims against the estate. If the executor is already aware of specific creditors, such as mortgage lenders, credit card companies, or medical providers, they may also send direct written notices to these debtors. 

Creditors who receive direct notice have 60 days from the date they receive the notice to file a formal claim with the estate. For creditors unknown to the executor, or those who did not receive direct notice, they have a longer period of 8 months from the date of the first newspaper publication to file their claims. This structured notification process ensures that all legitimate debts are identified before assets are distributed.

Valuing Estate Assets

Once all assets have been located, the executor is responsible for determining their fair market value as of the date of the deceased’s death. This valuation is crucial for several reasons: it helps in calculating any potential estate taxes, ensures equitable distribution among heirs, and provides a clear accounting for the probate court. 

Different types of assets require different valuation methods. For real estate, a professional appraisal is typically necessary to determine its market value. Stocks and bonds are valued based on their trading prices on the date of death or an alternative valuation date if elected. Bank accounts are straightforward, reflecting the balance on the date of death. Personal property, especially valuable items like antiques, jewelry, or collectibles, may require appraisals from specialists. Accurately valuing all assets is a significant undertaking that ensures transparency and compliance with legal and tax requirements throughout the probate process.

Paying Debts and Taxes in South Carolina

After all assets have been identified and valued, and all legitimate claims from creditors have been received and verified, the executor’s next critical duty is to pay all outstanding debts and taxes of the deceased. This step must be handled with extreme care, as there is a specific order of priority for payments under South Carolina law. 

Generally, administrative expenses of the estate (like court fees, attorney fees, and executor commissions) are paid first, followed by funeral expenses, then certain government claims (like taxes), and finally, other secured and unsecured debts. It is imperative that all legitimate debts are satisfied before any distributions are made to beneficiaries, as the executor can be held personally liable if assets are distributed prematurely and then debts cannot be paid. 

This phase also involves addressing any federal estate taxes (though most estates do not meet the federal threshold) and the deceased’s final income taxes. Proper accounting and record-keeping during this stage are essential for a smooth probate closing.

Distribution of Assets in SC

With all debts and taxes paid, the executor can finally proceed with the distribution of the remaining assets to the rightful heirs or beneficiaries. If the deceased left a valid will, the executor must strictly adhere to its instructions, distributing specific bequests to named individuals and dividing the residuary estate as directed. If there is no will, the estate is distributed according to South Carolina’s laws of intestacy. 

These laws dictate how property is divided among surviving spouses, children, parents, and other relatives based on a predetermined hierarchy. The executor will prepare a final accounting, detailing all assets, income, expenses, and proposed distributions. This accounting is typically presented to the court and to the beneficiaries for approval. Once approved, the executor will transfer ownership of assets, such as deeding real estate, transferring stock certificates, and distributing cash, formally concluding the distribution phase.

Closing the Estate

The final stage of the probate process is closing the estate. Once all assets have been collected, all debts and taxes paid, and all distributions made to beneficiaries, the executor must file a final accounting with the probate court. This accounting provides a comprehensive summary of all financial transactions that occurred during the administration of the estate, demonstrating that the executor has fulfilled all their duties according to the law and the will (if applicable). 

The court will review this final accounting to ensure everything is in order. Upon approval, the executor will typically be formally discharged from their duties, releasing them from further responsibility for the estate. This official closing signifies the completion of the probate process, allowing the estate to be fully settled and all legal obligations to be met.

If you need assistance with the probate process, contact our attorneys

At the De Bruin Law Firm, our estate attorneys understand how difficult it is to manage an estate while grieving the loss of a loved one. We are here to provide the guidance you need through each step of the probate process.

The attorneys at the De Bruin Law Firm understand that estate matters are emotional and stressful. We are available to provide objective advice and guidance to our clients. To schedule a free consultation, call 864-982-5930 or use the link below.

ESTATE PLANNING LAW SERVICES

If you have a legal matter related to Estate Planning, Business Law, or a Real Estate Transaction contact our office to speak to one of our attorneys.

Our Attorneys

Estate Planning and Criminal Defense

Aaron De Bruin, Esq.

Estate Planning and Business Law

Gary De Bruin, Esq.

De Bruin Law Firm

Helping you plan. Helping you prepare. Helping you Protect.

The attorneys at the De Bruin Law Firm understand that Estate Matters can be difficult to understand and plan for. We are available to provide our clients advice and guidance during the Estate Planning Process. To view common fees associated with an Estate Plan please call us at 864-982-5930 or use the link below to view some of our common Estate Planning Fees.

What Are Nonprobate Assets?

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Whether you are planning your estate or you are the executor of someone else’s estate, it is crucial that you understand the difference between probate and nonprobate assets. Nonprobate assets are essentially assets that do not have to go through probate upon the death of the estate owner. This term often confuses people, but it is actually rather simple. These assets are those that immediately transfer at the time of death, and are not an asset of the estate. Common nonprobate assets include:

Life Insurance

If there is a beneficiary listed properly on the life insurance policy, the proceeds will not go through the probate, but will go directly to the beneficiary. Life insurance is a wise decision if you have dependents who rely on your income, because they will receive the money from the policy quicker. However, you must make sure that the beneficiary designations are always accurate, or the proceeds will automatically go to the estate, and will be subject to taxes, creditors, and probate fees.

Retirement Accounts

If you name a beneficiary to your retirement account, they are automatically entitled to the account’s assets at the time of your death. Just like life insurance, however, you must make sure that your beneficiary is accurate, or they face the same dilemma. Be sure to consider your retirement accounts when discussing your assets with your estate planning attorney.

Payable On Death (POD) Accounts

Transferring most of your money to a POD account is a good strategy for ensuring your family receives the funds as soon as possible without being subject to extra fees. However, it is wise to still make sure your estate has some cash to cover funeral costs and other expenses.

Jointly Held Property

If you own property that is jointly held, you can set up your estate so that after your death, the interest is automatically given to the other owner (or owners). This is an advantageous if you have jointly held property with a spouse or one of your children, but it can be tricky with divorces or multiple children, so be sure to consult with a real estate attorney about this issue.

Trust Assets

If your assets are transferred to a trust before your death, it is a nonprobate asset. This is because assets in a trust are controlled by the trust, not the recently deceased, and therefore, do not need probate.

Given the difference between probate and nonprobate assets, it is clear that it is important to regularly estate plan to ensure that after you pass, your family will have access to the funds they need. Keep your affairs in order by regularly updating your will to accommodate any major life changes, including an employment change, a divorce, the birth of a child, the death of a beneficiary, and the purchase of property. When you need an estate planning lawyer in South Carolina, The De Bruin Law Firm has estate planning lawyers who may be able to help. Contact us today.

Importance Of Discussing Inheritance With Your Children

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You may not have discussed inheritance with your children yet, but it is an important conversation to have. Most families prefer to avoid conversations about this issue because it requires acknowledging the inevitability of death. However, by discussing these issues now, you can save your children conflict and distress after you have passed. Here are some of the reasons why it’s pertinent for you to have the uncomfortable conversation now.

Minimize Chances Of Will Contest

Communicating the details of your inheritances now will inform your children about your intentions and avoid surprises down the line. If you don’t have the conversation, you run the risk of your child becoming livid and contesting the will after your death. For example, there are cases in which it makes sense to distribute more inheritance to one child than the other for tax reasons. This can create obvious issues if your children don’t have an understanding of your motivations. Ensure that your will distributes your inheritances with minimal conflict by discussing these issues now.

Respect Everyone’s Wishes

Additionally, having these discussions ensures that your decisions respects your wishes as well as your loved ones’. This will help avoid unpleasant surprises after your passing, and ensure that everyone is comfortable. For example, your will also dictates the power of attorney and executor roles. By having this conversation now, you can ensure that whoever you wish to name can take on the role should it be necessary.

Address Any Issues Now

Additionally, when you discuss inheritances and your will with your children, you can determine if there any other issues that may arise that may prevent your assets from being properly distributed. For example, let’s say there is money in a joint bank account shared by a parent and one child. If that money is intended to go to another child, it must be transferred from the joint account into a trust; otherwise, the money automatically goes to the child who is on the joint bank account. Addressing these issues now ensures that your plans go as intended.

Discussing inheritance now will save your children distress in the future. Having a proper will in place will help as well. Without a valid will, your inheritance is at the mercy of South Carolina inheritance laws, which may not match your wishes. If you need an estate planning attorney to help you navigate this process, The De Bruin Law Firm may be able to help you. We have experience in estate planning, and care about ensuring that your wishes are met. Contact us today.

Changing A Will

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Your circumstances and those of your family will change over time – in fact, it would be odd if your situation and circumstances did not change. A new job or loss of a job, a divorce, a new child – all of these things require adjustments in your family’s budget, your living arrangements, and your estate plan. Changing your estate plan does not need to be a time-consuming and tedious process; in fact, if there are only a few minor changes to be made to your existing will, oftentimes these changes can be accomplished through the use of a codicil or written amendment.

Even though a codicil is a less-expensive and quicker way to change a will than simply creating a new will from scratch, you will still want to be aware of a few issues that can arise if your codicil is not properly prepared, executed, and/or stored.

Your Codicil Does Not Replace Your Will

 You must remember that a codicil is simply an amendment to an existing will – it does not replace a will you have already created. Therefore, it is important that you keep your codicil together with your will in the same location. If your executor or administrator cannot find your codicil, the terms of your will are likely to be enforced as written. Conversely, if your executor or administrator cannot find your original will, the executor or administrator may know all of the instructions you have for the handling of your estate. Therefore, once you have created a codicil, make sure to keep it in a secure location with your will. You should also inform your executor or administrator that you have created a codicil and where it and your will can be found.

You Must Clearly Indicate the Changes You Wish to Make to Your Will

 In order to be effective, your codicil must clearly indicate the changes you are attempting to make to your will. A codicil that is ambiguous or unclear may be disregarded by a probate court. Your codicil should specify the precise term of your will you are changing and reference where in your will this term can be found. The codicil should then clearly and unequivocally state that you are changing this term and how you are changing it.

 You Must Generally Comply with the Same Formalities Required to Execute a Will

 Your codicil must generally be executed in the same manner as your will. A codicil that is not so executed may (again) be disregarded by a probate court if its admission is challenged.

The De Bruin Law Firm is a South Carolina estate planning firm that can assist you in crafting and amending an estate plan to provide for your children as your family grows and its situation changes. If you have recently acquired a new asset or had a new addition to your family, come see us right away. We will help ensure that your estate plan accurately reflects the wishes and desires you have for your estate and your family if you were to unexpectedly pass away. Contact the attorneys at the De Bruin Law Firm today by phone or by using our firm’s online contact form.

The attorneys at the De Bruin Law Firm understand that estate matters are emotional and stressful. We are available to provide objective advice and guidance to our clients. To schedule a free consultation, call 864-982-5930 or use the link below.

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The attorneys at the De Bruin Law Firm understand that Estate Matters can be difficult to understand and plan for. We are available to provide our clients advice and guidance during the Estate Planning Process. To view common fees associated with an Estate Plan please call us at 864-982-5930 or use the link below to view some of our common Estate Planning Fees.

Do I Need A Trust Or A Will To Provide For My Child?

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Parents who set out to create an estate plan to provide for their children’s care and welfare following the parents’ deaths have two main choices in estate planning schemes: using a will alone or a will in combination with a trust. In times past most parents would have simply chosen to have a will drafted that would appoint a guardian for their children and dispose of their assets. In recent times, however, living trusts have become an increasingly-popular choice for individuals crafting an estate plan (regardless of whether they have children or not). But is a living trust necessary – or even desirable – for parents with children looking to create an estate plan that provides for their children?

Differences Between A Living Trust And A Will

Before determining whether a will alone or a trust is more desirable for parents, it is helpful to review the differences between these two documents. A will is a document that is admitted before the probate court by your executor or administrator (named in the will itself) and describes how you want your affairs handled after your death. A trust, on the other hand, is a legal entity in whose name you put property and assets (like your home, car, and/or valuables) while you are alive. A trustee (usually the creator of the trust, followed by successor trustee(s)) is tasked with managing all property that is in the trust’s name and using it for the benefit of the named beneficiaries of the trust – typically the trust’s creator and his or her spouse, followed by any children the couple may have, followed by any of their children’s children, and so on. A trust should not be used alone: most living trusts created as part of a comprehensive estate plan that includes a “pour-over will” – a document that takes any property owned by the decedent at the time of his or her death and “pours” it over into the trust. This essentially makes the decedent’s assets and property trust property on the date of his or her death.

When A Trust Might Be More Desirable

There is no universal answer to whether parents of young children should opt for a will alone or a will and trust. However, a living trust/will combination provides some advantages of a traditional will that some parents may find desirable:

● A trust is not a public record, so the precise terms of your estate plan can remain private in most cases;
● A trust allows you to pass on assets and property while avoiding some estate taxes that might otherwise be imposed;
● A trust allows for your assets and property to grow and increase in value and be used for the benefit of your children as well as subsequent generations.

Contact the experienced and dedicated South Carolina estate planning team at the De Bruin Law Firm for assistance. We will carefully listen to your circumstances and situation and will help you craft a personalized estate plan that accomplishes your objectives and the goals you have for your assets as well as for your children’s care.

5 Key Benefits To Establishing Trusts

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Most people grow up hearing about trust fund babies or thinking that a trust is only for individuals who are rich. This is simply not the case. Establishing trusts can benefit many different people during life and after passing. The way a trust is established can provide many positive features that aren’t involved in a regular estate inheritance. Working with an estate attorney can help you to decide which estate planning options are best for you. Consider these six benefits to establishing a trust with your finances for now or later on.

Avoid Probate

First, what is probate? Probate is a process by which a judge rules on the validity of a will. This means that after a person passes, a will can be contested. Unlike a will, a trust is less likely to be contested. Therefore, expensive legal fees and delays in the execution of the estate can be avoided. This allows you to make changes and amendments to your estate trust when you’re alive, but after passing the trust acts as a will and allows the trustee to execute final wishes while bypassing the probate courts.

Regulated Distribution

There are sometimes concerns about how an individual may utilize inherited finances. The way in which regulations can be set with a trust may be beneficial. As a grantor of a trust, there can be regulations where the money is distributed in even, small increments, or it may have restrictions based on age or any number of factors. This may put your mind at ease on how the beneficiaries use the money for years to come.

Charitable Trusts

Not everyone who works with an estate attorney or establishes a trust has children as the beneficiaries. In fact, charitable trusts are a great use for individuals who don’t wish their financial assets to go to distinct individuals. Charitable trusts allow grantors to have set money designated towards a charity of choosing during the life of the trust. These, again, can be distributed after passing in one lump sum, or the trust can exist like a living trust that distributes money in a regulated manner.

Taxes

In addition to avoiding probate, trusts help reduce tax liability when money is transferred from the grantor to the beneficiaries or trustee. Assets placed into a trust a less likely to incur taxes. There are specific restrictions and rules that apply to what is taxable and nontaxable with a trust. According to HowStuffWorks.com, “A trust can provide a way to avoid or reduce estate taxes because assets and property placed into a trust are not subject to these taxes. For example, with a children’s trust, a grantor can make tax-free monetary gifts from an estate to children or grandchildren” up to the annual exclusion amount.

Privacy

A unique benefit of established trust funds is privacy. The probate process is fully open to the public. However, when individuals choose to bypass the probate process with a trust, the passing of assets can remain private. This means that beneficiaries will not receive public scrutiny or company scrutiny. In fact, assets can remain private even among family members, reducing fighting and remain contest-resistant.

4 Questions To Consider When Creating A Will

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Making the decision to start estate planning by creating a Will is a very personal decision. Along with it being a personal decision it should also be a timely decision. No one wants to think about what could happen in the future. We’re all going to live to be 100 years-old right? Unfortunately, it’s important to start the process of creating a Will earlier in life so that you’re sure your affairs would be in order if something unexpected happens. Once you have decided to start the process of estate planning, there are several questions you should ask yourself as you work with an estate planning lawyer. Consider these topics as you work through the process.

Should I Have A Living Will As Well?

A will is a document intended to express your wishes after you pass. This includes everything from what happens to children, to who inherits property, and what happens with your finances. A living will is intended for times when you may still be alive but unable to make decisions concerning your care. If you have strong feelings about whether or not you want to be put on a ventilator, or if you know you’re going to have a medical procedure that involves anesthesia, a living will would be an important document to have so that your wishes are known. A living will is a document that compliments a standard will.

How Does This Affect My Children?

The purpose of creating a will is simply to make sure that your wishes are carried out after you pass. This includes any funeral arrangements and financial decisions. When it comes to individuals who have children, who do you want to have make decisions about their lives? If they’re minors, who will be their guardians? How will they be financially taken care of? If your children are older, will they receive equal treatment in the will? Will one be the executor of the estate over the other? These are questions that must be considered.

Who Are My Beneficiaries?

Not everyone has children and not everyone wants their entire estate to go to their children. That’s okay. Deciding who benefits from your estate is a very personal decision. Maybe you have two children and raised a nephew. You can designate equal assets to each of the three individuals so there is no squabbling. Or maybe you don’t have children and wish your assets to go to a very specific charity. That’s the purpose of the will is to be able to specify your wishes and know it will be carried out to the letter of the law.

Do I Need A Trust?

There are a variety of reasons someone may want or need to establish a trust. A trust is when assets are set up in an account with specific rules to them. Essentially the assets are set up where one person manages the assets for the benefit of another. This could be a trust fund for children that only allows access to the money when they go to college and or reach 18 years of age. Or it could be you’re looking to have your children manage your finances as you age. A trust could be of benefit there. Look at your unique situation and see if one could be of benefit to you.

The De Bruin Law firm offers a wide range of legal services to clients in Greenville, SC and the surrounding upstate. Our experienced attorneys can help you with legal matters in the areas of business law, criminal law, estate planning, and real estate law.

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