Tag Archive for: trusts

How Do Married Couples Structure Estate Plans in South Carolina?

/in , ,

Building a life together in the Upstate involves years of shared dedication, financial planning, and accumulation. Whether you have established a family home in the quiet neighborhoods of Simpsonville, built a thriving business in Spartanburg, or invested in vacation property along Lake Keowee, the desire to protect what you have built for your partner is a natural instinct. However, the legal path to ensuring your spouse is protected is rarely as straightforward as couples assume.

Many married couples in South Carolina operate under the dangerous misconception that “everything automatically goes to my spouse” if one of them passes away. While this sentiment is common, the actual laws governing probate and inheritance in South Carolina often dictate a different, more complicated reality. Without a deliberate and properly structured estate plan, the default laws of the state can create surprising financial burdens for a surviving spouse, particularly when minor children, blended families, or significant assets are involved.

Do My Spouse and I Need Separate Wills in South Carolina?

While joint wills generally exist, South Carolina attorneys strongly advise married couples to execute separate, reciprocal wills. Separate wills provide critical flexibility, allowing the surviving spouse to amend their estate plan after the first spouse’s death to account for life changes, whereas joint wills can inadvertently lock assets and create significant legal complications for the survivor.

The Hidden Dangers of the “Joint Will”

A “joint will” is a single document signed by both spouses, intended to dictate the distribution of assets for both parties. On the surface, this appeals to many couples who view their assets as completely shared. It seems efficient and unified. However, in legal practice, joint wills are often referred to as “contractual wills,” and they can be disastrous for the surviving spouse.

The rigidity of a joint will is its greatest flaw. When the first spouse passes away, the joint will essentially becomes a binding contract. The surviving spouse may be legally barred from changing the terms of the will, even if they live for another twenty or thirty years. Consider a scenario where a couple in North Main creates a joint will leaving everything to their children equally.

If the husband passes away and the wife lives another two decades, she might face new realities: perhaps one child develops a serious substance abuse problem, or another child becomes incredibly wealthy and no longer needs the inheritance. Under a joint will, the widow may be powerless to put the troubled child’s share into a protective trust or redirect assets to grandchildren who need help with college tuition. She is handcuffed by a document signed decades earlier.

Reciprocal Wills: The Preferred Standard

To avoid these pitfalls, the standard best practice for married couples in South Carolina is to create “reciprocal” wills. In this structure, the husband has his own will, and the wife has her own will. The documents are legally separate but mirror each other in their provisions. Typically, the husband’s will leaves his entire estate to his wife, and the wife’s will leaves her entire estate to her husband. If they pass simultaneously, or upon the second death, both wills direct the assets to the same beneficiaries (usually the children).

This approach offers three distinct advantages:

  • Flexibility for the Survivor: If the husband passes away, the wife inherits his estate. Because her will is a separate document, she retains the right to update it as life evolves. If she remarries, needs to sell the family home to move into a facility like The Woodlands at Furman, or wants to change the executor, she is free to do so.
  • Privacy: When a will is probated, it becomes a public record at the county courthouse. With reciprocal wills, only the will of the deceased spouse is filed initially. The surviving spouse’s estate plan remains private until their eventual death.
  • Simplicity in Probate: Filing a single joint document for two different deaths occurring years apart can confuse the probate process. Separate wills allow for a cleaner administrative process at the Greenville County Probate Court.

What Happens If One Spouse Dies Without a Will in South Carolina?

If a married person dies without a will in South Carolina, the surviving spouse does not automatically inherit everything if the deceased has children. Under state intestacy laws, the spouse inherits only 50% of the probate assets, while the children inherit the remaining 50%, regardless of their age, potentially creating complex legal hurdles for the family.

The “Intestacy Trap” for Married Couples

The most pervasive myth in estate planning is that marriage acts as a “will substitute.” Many couples believe that if one dies, the other simply takes over ownership of all assets. In South Carolina, this is legally incorrect for any asset held in the deceased spouse’s individual name.

Under South Carolina Code § 62-2-102, the laws of “intestate succession” determine who gets what when there is no will. If you pass away, leaving a spouse and children:

  • The Surviving Spouse receives 50% of the estate.
  • The Children share the remaining 50%.

This split applies even if the children are infants. It creates a legal nightmare known as the “minor inheritance problem.”

Real-World Consequences for Upstate Families

Imagine a husband owns a rental property in Travelers Rest or a vacation cabin in the Blue Ridge Mountains in his own name. If he passes away without a will, his wife now owns that property jointly with their two minor children.

Because minors cannot legally own or manage real estate, the surviving mother cannot simply sell the property or refinance the mortgage to pay bills. She would likely be required to petition the Probate Court to be appointed as the “Conservator” for her own children. This is a court-supervised process that is expensive, time-consuming, and invasive. The court may require her to post a bond, file annual accountings of every penny spent, and essentially ask a judge for permission to use the inheritance to support the children.

Furthermore, once those children turn 18, they are entitled to their share of the money or property outright. Most parents would agree that handing a significant lump sum of cash to an 18-year-old is rarely a wise financial decision. A properly structured estate plan avoids this statutory distribution entirely, ensuring the surviving spouse maintains control and the children are provided for according to the parents’ actual wishes, not the state’s default formulas.

Is a Joint Revocable Trust Better Than Separate Trusts for Married Couples?

A joint revocable trust is often the superior choice for couples with long-term marriages and commingled assets due to its simplicity and streamlined administration. Conversely, separate trusts are typically necessary for blended families, couples with significant separate property, or high-net-worth individuals requiring advanced tax planning and asset protection strategies.

The Case for Joint Revocable Trusts

For many couples in the Upstate who have been married for decades, finances are completely shared. They view their bank accounts, their home in Five Forks, and their investments as “ours” rather than “his” and “hers.” For these couples, a Joint Revocable Living Trust (RLT) often makes the most sense.

In a Joint RLT, both spouses serve as co-trustees and co-grantors. The trust holds title to their assets, but they maintain full control. They can buy, sell, spend, and invest exactly as they did before.

  • Unified Management: There is only one trust agreement to draft, one set of terms to understand, and one bucket to fund. This simplicity reduces legal fees and administrative headaches.
  • Seamless Transition: If one spouse becomes incapacitated or passes away, the other spouse automatically continues as the sole trustee. There is no need to change titles on bank accounts or deeds; the trust already owns them.
  • Complete Probate Avoidance: Just like separate trusts, a joint trust keeps the family’s affairs out of the probate court. This protects the family’s privacy and avoids the statutory probate fees calculated on the value of the estate.

The Case for Separate Trusts

However, “simple” is not always “safe.” Separate trusts—where the husband creates one trust and the wife creates another—are distinct legal entities. This structure is essential in specific scenarios frequently encountered by South Carolina families.

  • Blended Families and Remarriage: If one or both spouses have children from a prior relationship, a joint trust can be risky. A joint trust usually grants the survivor full control. The surviving stepparent could potentially disinherit the deceased spouse’s children in favor of their own. Separate trusts allow a spouse to “lock down” their portion of the assets upon death, ensuring that their biological children eventually inherit, while still allowing the surviving spouse to use the income.
  • Creditor and Liability Protection: For professionals in high-liability fields—such as neurosurgeons at Prisma Health or business owners in construction or manufacturing—separate trusts can be a component of an asset protection strategy. If one spouse is sued, assets held in the other spouse’s separate trust (if properly structured and not commingled) may be harder for creditors to reach.
  • Estate Tax Planning: While the federal estate tax exemption is currently high, it is scheduled to sunset in 2026. For high-net-worth families in Greenville, separate trusts allow for more precise “credit shelter” planning. Upon the first death, the deceased spouse’s assets can flow into a specialized irrevocable sub-trust that utilizes their tax exemption, keeping that wealth out of the surviving spouse’s taxable estate and protecting it from future estate taxes.

Specialized Structures: The Elective Share and QTIP Trusts

Estate planning is not merely about dividing assets; it is about balancing the rights of family members. South Carolina law includes specific provisions to protect spouses from disinheritance, which must be factored into any plan.

The Elective Share: Preventing Disinheritance

South Carolina is not a community property state; it is an equitable distribution state. However, a spouse cannot be completely written out of a will. Under the “elective share” statute (S.C. Code § 62-2-201), a surviving spouse has a statutory right to claim one-third of the deceased spouse’s probate estate, regardless of what the will says.

This is particularly relevant for couples who are separated but not legally divorced. If a husband moves out of the family home in Greer and writes a new will leaving everything to his brother, but dies before the divorce is final, his estranged wife can still claim her one-third share. Couples who wish to alter this right must sign a valid prenuptial or postnuptial agreement waiving the elective share.

The QTIP Trust: Balancing Support and Control

For couples in second marriages, the Qualified Terminable Interest Property (QTIP) Trust is a vital tool. It answers a difficult question: “How do I make sure my spouse is taken care of when I die, but guarantee that the rest of the money goes to my kids from my first marriage?”

In a QTIP structure, when the first spouse dies, their assets move into a trust. The surviving spouse receives the income from the trust for the rest of their life and can even live in the trust-owned home. However, the surviving spouse cannot sell the assets to give the money to a new partner or change the beneficiaries. Upon the surviving spouse’s death, the assets legally must pass to the children of the first spouse. This structure provides peace of mind for both the spouse and the children, minimizing conflict during an already emotional time.

Incapacity Planning: Powers of Attorney are Critical

While most people focus on what happens after death, a comprehensive estate plan for married couples must also address what happens during life. Marriage does not automatically grant you the legal authority to act for your spouse if they are incapacitated.

The Healthcare Power of Attorney

If a spouse is injured in a car accident on I-85 or suffers a sudden stroke, the other spouse needs immediate legal authority to make medical decisions. Without a Healthcare Power of Attorney, South Carolina law dictates the priority of decision-makers (statutory surrogates), but this can still lead to delays or conflicts with other family members. A Healthcare Power of Attorney (HCPOA) explicitly names your spouse as your agent, allowing them to access medical records, authorize treatments, and advocate for your care at facilities like Bon Secours St. Francis or Spartanburg Medical Center without bureaucratic hurdles.

 

The Durable Financial Power of Attorney

The financial side of incapacity is equally critical. If a husband develops dementia or is in a coma, his wife cannot automatically access his individual IRA, sign his name on a real estate deed, or even speak to the IRS on his behalf. Joint ownership of a bank account helps with that specific account, but it does not help with retirement accounts, insurance policies, or tax filings.

 

A Durable Power of Attorney grants your spouse the authority to manage your financial affairs if you cannot. It allows them to pay bills, manage investments, and even engage in Medicaid planning if long-term care becomes necessary. Without this document, the family would be forced to petition the Probate Court for a “Conservatorship,” a public, restrictive, and expensive process where a judge—not your spouse—has the final say on how your money is spent.

Taking the Next Step for Your Family

There is no single “correct” way for a married couple to structure an estate plan. The young professionals buying their first home in the Augusta Road area have different concerns than the retired couple in Greer looking to protect assets from nursing home costs. However, the common thread is the need for control and clarity.

At the De Bruin Law Firm, we believe that an estate plan is not just a stack of documents; it is a shield for the people you love. It ensures that your spouse is protected from intestacy laws, that your children are provided for without court interference, and that your family’s private business remains private. We help couples across the Upstate navigate these complex decisions, ensuring that the legal structure we build is resilient enough to handle whatever life brings.

If you have questions about how to best structure your estate plan as a married couple, or if you need to review existing documents that may no longer fit your life, we invite you to contact us at (864) 982-5930.

What Estate Planning Documents Should You Update for 2026?

/in

The year 2026 represents a major horizon line for families and individuals engaged in wealth preservation and legacy building. While estate planning is often viewed as a “set it and forget it” task, specific legislative timelines dictate when a review is necessary. The primary driver for this urgency is the scheduled sunset of the Tax Cuts and Jobs Act (TCJA) provisions.

Unless Congress acts to extend current laws, the federal estate tax exemption—the amount an individual can pass to heirs without incurring federal estate taxes—is set to revert to pre-2017 levels, adjusted for inflation. This effectively cuts the exemption amount in half. For many families in Greenville and throughout South Carolina who previously thought their estates were well below the taxable threshold, this change could unexpectedly expose their assets to significant federal taxation.

How Does the “Sunset” Provision Impact Your Existing Will?

Your Last Will and Testament is the foundation of your estate plan, but it may contain formulas or clauses tied to tax laws that are about to change. Many wills drafted years ago include “funding formulas” for testamentary trusts. These formulas often direct the maximum amount that can pass tax-free into a trust for family members, with the remainder going to a spouse.

Because the exemption amount is currently very high, a formula based on the “maximum exemption” might accidentally disinherit a surviving spouse by funneling the entire estate into a trust for children. Conversely, if the exemption drops in 2026, a formula designed for today’s laws might result in an unexpected tax bill.

When reviewing your Will for 2026, consider these factors:

  • Executor Appointments: Ensure the person named to manage your estate is still willing, able, and located conveniently to handle South Carolina probate requirements.
  • Guardianship: If you have minor children, verify that the named guardians are still the people you trust most with their care.
  • Asset Distribution: Does the distribution of assets reflect your current wishes and the current value of your property?
  • Tax Clauses: Have a knowledgeable attorney review tax allocation clauses to ensure they function correctly under a lower exemption regime.

Why Should You Revisit Your Revocable Living Trust?

A Revocable Living Trust is a powerful tool for avoiding probate in South Carolina, maintaining privacy, and managing assets during incapacity. However, a trust is only effective if it is properly funded and updated. If you created a trust several years ago but have since purchased a new home, opened new investment accounts, or acquired business interests without retitling them in the name of the trust, those assets may still end up in probate court.

For South Carolina residents, specific attention should be paid to the following:

  • Real Estate: Ensure all deeds for properties in Greenville or elsewhere in the state are recorded in the name of the trust.
  • Successor Trustees: Review who will step in if you become incapacitated or pass away. Are they still the right choice?
  • Distribution Rules: Does the trust protect beneficiaries from their own potential creditors, divorce, or poor spending habits?
  • Incapacity Planning: Does the trust have clear instructions for your care if you are unable to manage your own finances?

Is It Time to Consider an Irrevocable Trust (SLAT or ILIT)?

For those with substantial assets who wish to “lock in” the current high estate tax exemption before it potentially disappears in 2026, the Revocable Trust may not be enough. Irrevocable trusts are distinct because they remove assets from your taxable estate entirely. Once the 2026 sunset occurs, the opportunity to move large amounts of wealth tax-free may be significantly reduced.

Two specific types of trusts are often utilized in this environment:

  • Spousal Lifetime Access Trust (SLAT): This allows one spouse to gift assets to an irrevocable trust for the benefit of the other spouse. It removes the assets from the donor’s estate while allowing the family to retain some access to the funds through the beneficiary spouse.
  • Irrevocable Life Insurance Trust (ILIT): Life insurance proceeds are generally included in your taxable estate. An ILIT can own the policy, keeping the death benefit outside of your estate and providing tax-free liquidity to pay estate taxes or debts.

Creating these vehicles requires time and precise drafting. Waiting until late 2025 to begin this conversation may result in missed opportunities due to the complexity of the legal work and the administrative steps required to fund the trusts.

Are Your South Carolina Powers of Attorney Up to Date?

A Durable Financial Power of Attorney allows you to designate an agent to handle your financial affairs if you are unable to do so. In South Carolina, the laws regarding these documents have evolved. If your Power of Attorney is older, financial institutions may be hesitant to honor it, fearing liability or obsolescence.

The South Carolina Uniform Power of Attorney Act provides a statutory framework for these documents. A comprehensive Power of Attorney should explicitly grant your agent the authority to handle specific tasks that may be necessary for tax planning or long-term care planning.

Key powers to look for include:

  • Gifting Authority: Does the document allow your agent to make gifts? This is often necessary for Medicaid planning or reducing estate taxes.
  • Trust Powers: Can your agent create or fund a trust on your behalf?
  • Real Estate Transactions: Is the authority to sell or manage real estate explicitly stated?
  • Beneficiary Changes: Does the agent have the power to change beneficiary designations on retirement accounts or insurance policies?

Without a valid, up-to-date Power of Attorney, your family might be forced to seek a conservatorship through the Probate Court, which is a public, time-consuming, and expensive process.

Do Your Health Care Documents Reflect Your Current Wishes?

Medical directives are a vital component of a complete estate plan. In South Carolina, there are two primary documents to consider: the Health Care Power of Attorney and the Declaration of a Desire for a Natural Death (commonly known as a Living Will).

The Health Care Power of Attorney appoints a specific person to make medical decisions for you if you cannot communicate. The Living Will allows you to state your preferences regarding life-sustaining procedures, such as artificial nutrition and hydration, in terminal situations.

Review these documents to ensure:

  • Agent Availability: The person you named five or ten years ago may no longer be the best person for the job due to age, health, or location.
  • HIPAA Authorization: Ensure your documents include current HIPAA releases so your agents can access your medical records and speak with doctors.
  • Religious or Personal Preferences: Have your views on end-of-life care changed? Your documents should reflect your current values.

Why Must You Review Beneficiary Designations Immediately?

Beneficiary designations on assets like 401(k)s, IRAs, life insurance policies, and annuities often override what is written in your Will or Trust. This is a common area where estate plans fail. If your Will says “everything to my spouse” but your IRA still lists your ex-spouse or a deceased parent as the beneficiary, the IRA administrator is legally required to pay the person named on the form.

The passing of the SECURE Act also changed the rules for how inherited retirement accounts must be distributed. Most non-spouse beneficiaries must now deplete an inherited IRA within ten years. This has significant tax implications for your heirs.

Check the following designations:

  • Primary Beneficiaries: Are they correct and living?
  • Contingent Beneficiaries: Who receives the asset if the primary beneficiary predeceases you?
  • Trusts as Beneficiaries: If you named a trust as a beneficiary of a retirement account, the trust language must be carefully drafted to accommodate the ten-year payout rule to avoid negative tax consequences.

How Can Gifting Strategies Help You Prepare for 2026?

Proactive gifting is one of the most effective ways to reduce the size of a taxable estate before the exemption drops. By moving assets to the next generation now, you not only remove the value of the gift from your estate but also all future appreciation on that asset.

You can utilize the annual gift tax exclusion to give a set amount to as many individuals as you like each year without reporting it to the IRS. For married couples, this amount can be combined to double the impact.

Strategies to consider include:

  • Cash Gifts: Simple transfers to children or grandchildren.
  • Educational Payments: Paying tuition directly to a school does not count toward your annual exclusion or lifetime exemption.
  • Medical Payments: Paying medical bills directly to a provider is also exempt from gift taxes.
  • 529 Plans: Front-loading contributions to college savings plans for grandchildren.

Using these exclusions year over year can significantly lower your taxable estate over time, mitigating the impact of the 2026 sunset.

Why is Medicaid Planning Different from Tax Planning?

While the 2026 tax sunset is a major concern for high-net-worth individuals, many South Carolina seniors are equally concerned about the cost of long-term care. Medicaid planning focuses on eligibility for government benefits rather than estate tax reduction. The rules for Medicaid are strict, particularly regarding assets and income.

South Carolina imposes a five-year “look-back” period on asset transfers. If you give away assets to your children to qualify for Medicaid within five years of applying, you may face a penalty period where you are ineligible for care.

Documents and strategies to review for Medicaid purposes include:

  • Qualified Income Trusts (Miller Trusts): Necessary if your monthly income exceeds the Medicaid cap.
  • Medicaid Asset Protection Trusts: A specific type of irrevocable trust designed to start the five-year clock while preserving the home or other assets.
  • Caregiver Agreements: Formal contracts to pay a family member for care, which can help spend down assets legally.

It is vital to distinguish between gifting for tax purposes and gifting for Medicaid purposes, as they have different rules and consequences.

What is the Role of a Fiduciary in Your 2026 Plan?

A fiduciary is an individual or institution you entrust with legal power over your assets or well-being. This includes your Personal Representative (executor), Trustee, and agents under Powers of Attorney. The choice of a fiduciary is often more important than the documents themselves.

As you approach 2026, evaluate your fiduciaries:

  • Competence: Do they have the financial acumen to manage the complexities of your estate?
  • Integrity: Can you trust them implicitly to act in your best interest?
  • Age and Health: Are your named fiduciaries aging alongside you? It may be time to name a younger generation or a professional fiduciary.
  • Relationship: Has the family dynamic shifted? Conflict between siblings is a common issue when one is named trustee over the other.

Why Is Updating Digital Asset Access Necessary?

In the modern era, a significant portion of our lives exists online. From cryptocurrency and online banking to social media accounts and photo storage, digital assets are part of your estate. South Carolina law recognizes the need for fiduciaries to access these assets, but standard forms may not be specific enough.

Your estate plan should include:

  • Digital Asset Authorization: Specific language in your Will and Power of Attorney granting authority to access digital devices and accounts.
  • Inventory of Digital Assets: A secure list (kept separate from the Will) of accounts, usernames, and passwords.
  • Legacy Contacts: Designating legacy contacts on platforms like Apple, Google, and Facebook.

Without these provisions, your family may be locked out of valuable or sentimental accounts forever.

When Should You Start the Review Process?

Waiting until December 2025 to address these issues is a risk. Estate planning attorneys, financial advisors, and accountants will likely be inundated with requests as the sunset deadline approaches. Trust administration, asset retitling, and obtaining valuations for complex assets take time.

Starting the review process now allows for:

  • Thoughtful Decision Making: You have time to consider who should inherit what and who should manage it.
  • Asset Valuation: Appraisals for businesses or real estate can be completed without a rush.
  • Stress Reduction: Knowing your plan is ready for 2026 provides peace of mind.

Securing Your Legacy in South Carolina

The shifting legal landscape leading up to 2026 presents both a challenge and an opportunity. By taking proactive steps to update your Wills, Trusts, and Powers of Attorney, you can protect your family from unnecessary taxes, probate complications, and administrative burdens. A well-crafted estate plan is a living strategy that evolves with the law and your life. At the DeBruin Law Firm, we are dedicated to helping Greenville families navigate these complex changes. We can analyze your current documents, explain how the 2026 laws affect your specific situation, and design a plan that secures your legacy.

If you are ready to ensure your estate plan is prepared for the future, please contact us at (864) 982-5930 or complete our online contact form to schedule a consultation.

Decanting an Irrevocable Trust in South Carolina: When and How Is It Possible?

/in

The term “irrevocable” suggests permanence, a legal structure set in stone, unable to be altered or revoked. For many individuals in South Carolina who have established or benefit from an irrevocable trust, this belief can lead to a sense of helplessness when circumstances change. Life is unpredictable, and a trust created years or even decades ago may no longer serve the family’s best interests due to shifts in tax law, beneficiary needs, or unforeseen family dynamics. Fortunately, “irrevocable” does not always mean “un-changeable.” A powerful and sophisticated legal tool known as decanting can often provide the flexibility needed to adapt an old trust to modern realities.

What Does “Irrevocable” Really Mean for a Trust?

An irrevocable trust is a legal arrangement where the creator, known as the settlor or grantor, permanently transfers assets into a trust managed by a trustee for the benefit of named beneficiaries. Once created and funded, the settlor typically cannot amend or dissolve the trust. This permanence is often intentional, designed to achieve specific goals like:

  • Estate Tax Reduction: By removing assets from the settlor’s personal estate, an irrevocable trust can reduce or eliminate future estate tax liability.
  • Asset Protection: Assets held within the trust are generally shielded from the creditors of both the settlor and the beneficiaries.
  • Medicaid and Government Benefits Planning: It can help individuals qualify for long-term care benefits by reducing their countable assets.

While these are powerful advantages, the trade-off is a lack of flexibility. The rules governing the trust are fixed. A revocable living trust, by contrast, can be changed or canceled by the settlor at any time. The challenge arises when an irrevocable trust’s unchangeable nature conflicts with a necessary change.

What is Trust Decanting?

The term “decanting” is borrowed from the world of wine. When a winemaker decants an old bottle of wine, they carefully pour the liquid into a new vessel, leaving the unwanted sediment behind. Trust decanting operates on a similar principle. It is the legal process of a trustee using their discretionary power to “pour” the assets from an existing irrevocable trust into a new irrevocable trust that has updated and more favorable terms.

The old, problematic provisions are left behind in the original trust, while the assets move into a new trust instrument better suited for the current situation. This is not a way to undo the trust but rather a method to restate its terms within a new framework, all while respecting the settlor’s original intent.

Why Might a Trustee Consider Decanting a Trust in South Carolina?

Trustees and beneficiaries may seek to decant a trust for a multitude of reasons. The need for modification is rarely due to a single issue but often a combination of factors that have emerged over time. Some of the most common motivations include:

  • Correcting Drafting Errors or Ambiguities: Older trust documents may contain ambiguous language or simple scrivener’s errors that create administrative confusion or lead to disputes. Decanting can clarify these terms without the need for costly court proceedings.
  • Updating Administrative Provisions: A trust may have outdated administrative rules. For example, it might name a successor trustee who has since passed away or become incapacitated, or it may lack provisions for appointing or removing trustees. Decanting allows for the modernization of these essential mechanics.
  • Adapting to Changes in the Law: Federal and state laws related to taxes, estates, and trusts are constantly evolving. A trust drafted under an old tax code may be inefficient or even detrimental under current law. Decanting can update the trust to take advantage of new tax-saving strategies.
  • Addressing a Beneficiary’s Changed Circumstances: A beneficiary’s life can change in unexpected ways. They might develop a disability, requiring the creation of a special needs trust to protect their eligibility for government benefits. Alternatively, a beneficiary may be struggling with creditors, divorce, or substance abuse issues, making it prudent to place assets in a new trust with stronger protections.
  • Improving Tax Efficiency: The new trust can be structured to minimize various taxes, including state income tax (by moving the trust’s location or “situs” to a no-income-tax state), federal estate tax, and the Generation-Skipping Transfer (GST) tax.
  • Combining or Separating Trusts: It can be inefficient to manage multiple small trusts for the same family. Decanting can consolidate them into a single, more cost-effective trust. Conversely, a single large trust for multiple family branches might be split into separate trusts to avoid conflicts and tailor distributions to each branch’s unique needs.

What is the Legal Authority for Decanting in South Carolina?

Unlike many states that have enacted specific statutes explicitly authorizing trust decanting, South Carolina does not have a dedicated decanting law. However, this does not mean decanting is impossible. The authority for a trustee to decant a trust in South Carolina can be found in several places:

  • The Trust Document Itself: A well-drafted trust may contain a provision that explicitly gives the trustee the power to decant. This is the most straightforward source of authority.
  • The South Carolina Uniform Trust Code (UTC): While the UTC in South Carolina does not have a specific decanting section, other provisions can be interpreted to permit it. A trustee’s broad discretionary power to distribute trust principal to or for the benefit of a beneficiary can often be interpreted as the power to distribute those assets to a new trust for that same beneficiary.
  • Common Law: Decades of case law have established broad powers for trustees acting in the best interests of the beneficiaries. A trustee’s fiduciary duty may not only permit but sometimes compel them to take action, like decanting, to better protect and manage the trust assets.

Because the authority is not derived from a single, clear statute, navigating this process requires a careful legal analysis of the original trust document and the relevant provisions of the South Carolina Trust Code.

Who Has the Power to Decant a Trust?

The primary actor in a decanting is the trustee. However, not every trustee has this power. The key requirement is that the trustee must have discretionary authority to make distributions of the trust’s principal (the assets) to the beneficiaries.

The scope of the trustee’s decanting power often depends on the breadth of their discretion. For example:

  • Absolute Discretion: If a trustee has “absolute,” “sole,” or “unfettered” discretion to distribute principal, they generally have the broadest power to decant assets into a new trust with significantly modified terms.
  • Limited Discretion: If the trustee’s discretion is limited by a standard—for example, they can only make distributions for a beneficiary’s “health, education, maintenance, and support” (HEMS)—their power to decant is more restricted. The new trust must generally retain the same limitations.

A trustee cannot decant a trust if their role is limited to making only mandatory income distributions. The power is tied directly to the ability to distribute the underlying principal of the trust.

What is the Process for Decanting a Trust?

Executing a decanting is a formal legal process that must be handled with precision to ensure its validity. While the specifics can vary, the general steps include:

  • Review the Original Trust Document: The first step is a thorough analysis of the existing trust to identify the trustee’s distribution powers, any restrictions on that power, and the rights of the beneficiaries.
  • Analyze Trustee’s Authority: A legal determination must be made that the trustee has the authority to decant under the terms of the trust and South Carolina law. This involves confirming that the action is consistent with the trustee’s fiduciary duties.
  • Draft the New Trust: An entirely new irrevocable trust is drafted. This document will contain the updated provisions and will be structured to receive the assets from the original trust.
  • Provide Notice to Beneficiaries: In South Carolina, a trustee is typically required to provide notice of the proposed decanting to all qualified beneficiaries. This notice period gives beneficiaries an opportunity to review the changes and raise any objections.
  • Execute the Decanting: Once the notice period has passed without objection, the trustee executes a legal instrument that exercises their power of appointment. This document formally transfers the assets from the old trust to the new trust.

What Are the Limitations on a Trustee’s Decanting Power?

Decanting is a powerful tool for modifying irrevocable trusts, but it is not without significant limitations. A trustee cannot exercise this power to make changes that fundamentally violate their fiduciary duties or the core purpose for which the trust was established. Understanding these key limitations is crucial for any trustee considering decanting.

  • Fiduciary Duties: Paramount among these limitations are the trustee’s fiduciary duties. Any decanting action must be undertaken in good faith and, most importantly, in the best interests of all beneficiaries. A trustee is strictly prohibited from decanting a trust to benefit themselves, such as by increasing their own compensation, or to favor one beneficiary over others without a valid and compelling reason that aligns with the settlor’s original intent. The trustee’s loyalty must remain with the beneficiaries as a whole.
  • Beneficiary Rights: The rights of the beneficiaries are also a critical constraint. The new trust created through decanting cannot eliminate or diminish a beneficiary’s vested right. For instance, if the original trust explicitly grants a beneficiary a current, mandatory right to receive all trust income, the decanted trust cannot alter this provision to make income distributions discretionary. Such a change would fundamentally impair a vested interest.
  • Adding New Beneficiaries: A trustee does not have the authority to introduce entirely new beneficiaries who were not initially included in the original trust instrument. The pool of beneficiaries for the new, decanted trust must either be identical to the original beneficiaries or constitute a subset of those original beneficiaries. This limitation ensures that the trust’s scope remains consistent with the settlor’s initial charitable or familial intentions.
  • Respecting the Settlor’s Intent: One of the most significant overarching limitations is the requirement to respect the original settlor’s probable intent. Decanting should be employed to further or clarify the settlor’s original goals, not to completely rewrite the purpose of the trust in a way that contradicts those goals. While decanting can address unforeseen circumstances or adapt to changing laws, it cannot be used as a means to fundamentally alter the settlor’s foundational wishes regarding the trust’s objectives and beneficiaries.
  • Rule Against Perpetuities: Finally, the new trust established through decanting cannot extend the duration of the trust beyond the period allowed by law. This is typically governed by the rule against perpetuities, which prevents trusts from existing indefinitely and tying up assets for an unreasonable length of time. Adherence to this rule ensures that trust assets will eventually vest in identifiable beneficiaries within a legally defined period.

How Does Decanting Compare to Other Methods of Trust Modification?

Decanting is one of several ways to alter an irrevocable trust, and it is often the most effective when unanimity is not possible. Other common methods include:

  • Judicial Modification: This involves petitioning a court to approve changes to the trust. It can be effective but is also public, time-consuming, and expensive.
  • Non-Judicial Settlement Agreements (NJSAs): Under the South Carolina Trust Code, trustees and beneficiaries can enter into a binding agreement to modify a trust. However, this requires the consent of all parties, which can be difficult or impossible to obtain if there are minor beneficiaries, uncooperative family members, or unborn future beneficiaries.
  • Trust Protector Actions: Some modern trusts name a “trust protector,” a third party with the specific power to amend the trust. If the trust has a protector with this authority, their action may be a simpler path than decanting.

Decanting is particularly valuable when a trustee needs to act, but obtaining the consent of every beneficiary for an NJSA is not feasible.

Navigating Complex Trust Matters with Confidence

The ability to decant an irrevocable trust provides a vital solution for families whose financial and personal situations have outgrown the confines of an older estate plan. It allows for the thoughtful and strategic adaptation of a trust to protect beneficiaries, improve tax outcomes, and ensure the trust functions as intended for generations to come. However, given the lack of a specific decanting statute in South Carolina, the process demands careful legal guidance from attorneys familiar with state trust law.

The DeBruin Law Firm is committed to providing knowledgeable counsel to trustees and beneficiaries across Greenville and the surrounding communities. We can help you evaluate whether decanting is a viable option for your trust and guide you through every step of the process, ensuring compliance with all legal and fiduciary requirements.

If you are managing or benefiting from a trust that no longer meets your family’s needs, please contact us at (864) 982-5930 or send a message online to schedule a consultation.

What Does It Mean To Actually Fund A Trust?

/in

Funding a trust simply means taking assets that are titled in your name, and transferring them to your trust. By way of an example, if you have a car, you have a title. The car is titled in your name. If you were to put that car into a trust, you would go to the DMV and have the car re-titled from your name to the name of your trust. Funding a trust can also mean that you take an asset that requires a beneficiary designation, and re-establish a beneficiary in the trust name. For example, if you have a life insurance policy, you have a designated beneficiary. You can change that beneficiary’s name to the trust, and that re-titles the proceeds from that life insurance policy to the trust.

Who is ultimately responsible for funding a trust?

The person making the trust is ultimately responsible for funding the trust and ensuring that the assets are transferred to the trust.

What happens if someone does not fund a trust? Does it cease to exist?

A trust does not come into being until it’s funded. A trustee, or the person that’s responsible for controlling the trust, can only control assets that have been titled in the name of the trust. If the assets are not transferred to the title of the trust, then the trust cannot pass control to the trustee, and the assets will be probated just like any other probate.

What are the assets that I can put into a trust?

Almost any type of asset can be put into a trust. However, the common assets that are placed in trusts under normal circumstances include real estate holdings, bank accounts, non-retirement accounts at a brokerage that would stock bonds, tangible personal property, business interests, life insurance policies, and debts that are owed to the trust maker from some other source.

Is there anything that can absolutely not go into a trust?

One asset that should not be placed in a trust name is a qualified retirement account. There are tax implications of titling your 401K or your IRA in the name of a trust. When you take that asset and put it in the name of the trust, the IRS and the government takes that as a sale, or as a distribution of that asset, and so it becomes a tax. For qualified retirement accounts, you want to make sure that you just re-establish a beneficiary designation as the trust. That way, you’re not actually making a distribution. A health savings account is another asset that you don’t want to put in a trust name. Additionally, anything under the Uniform Gift to Minors Act, or the Uniform Transfers to Minors Act should not be placed in a trust name because those accounts technically belong to the minor. Since they belong to the minor, they cannot be transferred into someone else’s trust.

As I stated earlier, you don’t want to put a life insurance policy in the name of the trust, but instead you would put the beneficiary designation as the trust.

You can put any vehicle with a title into a trust, such as cars, boats, motorcycles, and airplanes.  We think of cars as the easiest assets to transfer, but in order to transfer title of those types of assets into a trust, you have to go to the DMV and get a new title in the name of the trust. There are fees associated with this, so if it’s a valuable that has some kind of tax or transfer tax attached, you want to look at that and say, “Maybe I don’t want to put that in the trust because of the transfer tax.”

Do I always need to re-title assets to add them to the trust?

With the exception of beneficiary designations which we’ve discussed, the purpose of the trust is to acquire the title of the assets. That’s what makes the trust a viable entity. Because a trust exists as an entity, the death of the trust maker does not affect the trust. The trust survives, and that’s why there is no need to probate the assets in the trust. So, because of the purpose of the trust, you must re-title your assets in the name of the trust.

For more information on Funding A Trust In South Carolina, a free initial consultation is your next best step. Get the information and legal answers you are seeking by calling (864) 982-5930 today.

What Actually Is a Trust?

/in

A Trust is a fiduciary relationship between parties, and it allows a Trustee to hold assets on behalf of a beneficiary of those assets. Specifically, a Trust can be created to direct how your assets are utilized and how they pass to the beneficiary. Normally, Trusts are created to reduce an estate tax liability or to protect property in an estate to avoid probate and to direct the use of your assets.

What are the benefits and disadvantages associated with a trust in estate planning?

The most common Trust is a living Trust. Assets placed in a living Trust are for the benefit of a person during their lifetime, and then those assets are transferred to the Trustee’s designated beneficiaries at the time of your death. The largest benefit of having a living Trust is avoiding probate. A Will must be probated, and a Trust is an entity that survives the maker’s death so it doesn’t have to be probated. A living Trust can be more cost effective than the cost of probating a Will. The living Trust can be named as a beneficiary for things such as life insurance policies, 401(k)s, IRA assets, etc.

A Will is made public when it’s probated, but a Trust is not made public. The Trustee can take over Trust responsibilities immediately upon the death of the maker; however, in a Will, there are procedures that must be followed for the executor to take control of the assets. The assets must pass from the deceased’s name to the executor’s control. The living Trust is most popular because it is the most cost effective.

The only major disadvantage to a Trust is that a living Trust is limited in what application it can serve. In a Trust, you can’t arrange for the care of minor children, announce guardians for minor children, grant rights to an unmarried partner, or make funeral arrangements. These things are all handled by the Will.

Why would you recommend a trust as an effective method of estate planning?

When we recommend a Trust, it is often because it avoids probate and because it is private. Also, if you have minor children, or a child with disability, you can set aside the assets that can benefit the child in your Trust, giving you the ability to decide how that money is allocated.

If you have family members that are going to be the beneficiary of your Trust, and that family member is not adept at handling money, you can make provisions in your Trust to control how much money they will receive, how they will receive it, and what the money is for.

Trusts are also used for out of state real estate properties. If you own a property out of state, that property will have to go through probate. If that property is held by a Trust, because it doesn’t go to probate, it passes by the direction of the Trust and it doesn’t have to go through probate. For Trust purposes, it’s much easier for a Trustee to handle the finances of a Trust than it is for an executor of the estate from the Will to take control immediately upon the death of the maker. If you have complicated assets, or the distribution of your assets is very complicated, it’s much better to have outlined that in a Trust than to try and have it outlined in a Will after death.

By forming the Trust before your death, you can set up exactly how you want those procedures to be done.

For more information on Trusts In South Carolina, a free initial consultation is your next best step. Get the information and legal answers you are seeking by calling (864) 982-5930 today.

10 Steps to Making a Will — And Why You Need a Lawyer to Help

/in

Have you written your will yet? If the answer is no, this is something you should not ignore.

Every adult should have a written will to protect their assets and family from the unexpected

If you think making a will is complicated, we’re here to help. Keep reading to learn how.

1. Understand Why You Need a Will

There’s a common misconception you need to be rich in order to make a will. However, failure to do so will result in a difficult time for your loved ones in the event of your passing.

Maybe you don’t have millions of dollars or many properties, but you still need to designate who will keep your possessions.

A will dictates your last wishes. If you promised your younger brother your motorcycle but don’t leave a will, who is to say there won’t be many family disputes over it.

Having a will is important for any person, not just rich individuals.

2. Inventory Your Estate

Making an inventory of your material possessions is quite simple. If you have a living spouse, you could simply leave any properties, trusts, and insurance policies to your spouse.

Then if you want to leave other material possessions to other family members, you should specify it in the will. This part is simple, but it does get a bit tricky when you have more financial affairs.

You might not be aware of other aspects that should be included in the will. Consulting a lawyer is the best way to get some guidance on things like trust accounts, insurance policies, 401K or IRA accounts, and more.

A lawyer will ensure there are no loopholes left when you make the inventory of your estate.

3. Appoint an Executor

You will need to appoint an executor. An executor is not necessarily a beneficiary, it can be anyone you fully trust.

The job of an executor is to ensure your last wishes are fulfilled when you pass away. Your executor will distribute the property, pay the taxes, and perform other legal duties on your behalf.

If you don’t have a family member or friend to be the executor, you can leave it in the hands of your lawyer.

4. Decide Who Will Get Custody of Your Kids

If you have underage children, it’s even more important you have a will. In order to avoid your children ending up without a guardian, or with the wrong one, you should appoint on in your will.

Remember, the person you pick to be your guardian should be fully aware of the commitment.

Pick a relative or close friend who you trust and will match your parenting style and values.

5. Designate a Power of Attorney

If you decide to draft a will, you should also designate a power of attorney.

A power of attorney is someone who will act on your behalf should you become physically or mentally disabled and unable to make your own decisions.

Whoever you designate will have the financial responsibility of paying your bills, managing debts, and other critical financial decisions you’re unable to make for yourself.

Consult an attorney to get more information or what kind of power of attorney you would need.

6. List All Your Debts

In the event of your passing, your debts don’t go away. Since your executor will be the person responsible for paying all of your debts, you should leave them a list to guide them in the process.

Make a detailed list of all your financial obligations including car loans, mortgages, credit cards, medical bills and more.

7. Choose Your Beneficiaries

If you have a simple family dynamic, your estate will probably go to your spouse or children. At least that is how a judge would decide it if you don’t leave a will behind.

If this is your wish, you should leave a will to make sure is in writing an no one can try to take from your family what is rightfully theirs.

However, if you don’t have immediate family or are estranged, you should designate a beneficiary. In doing so, it will speed up the probate process.

8. Pick a Place for Your Will

Your will is an important legal document, therefore, you need to make sure store it in a safe place.

Leaving it in one of your drawers at home is not a good idea. In a will, you included your last wishes and should only be read in the event of your passing. No one should have access to this document.

It should be stored in a fireproof place away from prying eyes, like a bank safe deposit box. Just make sure someone you know knows the location.

9. Review and Update Your Will

Once a copy of your will is drafted, you have to make sure it says what you meant for it to say.

This is the time to make changes and be as specific as possible.

Even once your will is done, you’re not done with it. You should pull your will out of the safe place where you keep it to review and update it.

You should aim to pull your will out of hiding every four to five years just to verify those are still your wishes.

If you fell out of touch or someone you included in your will passed, then you want to make sure they’re removed from the will.

10. Don’t Forget the Importance of a Lawyer

Although there are some will DIY resources, hiring a lawyer to write your will is one of the safer choices.

Hiring a lawyer means there will be no confusion on your will because they know the law and know how to navigate complex cases and situations.

Making a Will Doesn’t Have to Be Difficult

Making a will is not only for rich people. If you have belongings, property, or children, is a smart move to leave a will behind.

A will is the record of your final wishes and it’s important you leave those instructions in the right hands. Are you in the South Carolina Area and would like help in your estate planning? Don’t hesitate to contact us.

Aaron De Bruin Named to Greenville’s Legal Elite

/in

Aaron De Bruin Selected As One of Greenville’s Elite Attorneys for Estate Planning and Tax Law

Congratulations attorney Aaron De Bruin of the De Bruin Law Firm was named by Greenville Business Magazine as one of Greenville’s elite attorneys for Estate Planning.

“Winning any award is an honor, but winning this award makes me feel very undeserving,” Aaron says, “It’s humbling to be awarded a title by your peers.”

In his work in estate planning, Aaron assists clients throughout South Carolina who need wills and trusts. Estate planning primarily entails protecting your assets upon your death and making sure they are distributed according to your wishes. Estate plans are essential to taking care of your family after you die.

A will is anything that goes through the probate process, whereas a trust can avoid probate by assigning an asset to the trust, eliminating the need for probate. Trusts are protected against creditors and government agencies, and can be used as a shield for family members to maintain eligibility in government programs.

Aaron primarily focuses his practice in the areas of  Estate Planning, Probate and Criminal Defense at De Bruin Law Firm. Located just off Wade Hampton Boulevard at 16 Wellington Ave,  near the new NorthPointe Develpment Project  in Greenville, South Carolina.

De Bruin Law Firm: A Family Centered Law Firm

Aaron began his legal career in the Marines as a judge advocate, helping deploying marines and their families set up estate plans. From here, he began his career as a prosecutor and eventually transitioned into private practice with his father Gary De Bruin and his brother Bryan De Bruin at De Bruin Law Firm. Aaron can be contacted at 864-982-5930 or my visiting the De Bruin Law Firm website at DeBruinLawFirm.com.

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, 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.

 

5 Estate Planning Myths Debunked

/in

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?

/in

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.

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.

Our Services

Quick Links

    Contact Us