Estate Planning in South Carolina: Why Waiting Can Create Unnecessary Risk

If You Don't Create an Estate Plan, State Law May Make Important Decisions for You

When a South Carolina resident dies without a valid will, he or she is generally described as dying intestate. For assets that are part of the intestate estate, South Carolina law determines who inherits those assets — and that can produce results families do not expect.

For a married person with surviving descendants, the surviving spouse generally receives one-half of the intestate estate, with the remainder passing to descendants under South Carolina law — which can be very different from what someone assumed would happen.

A Will Gives You an Opportunity to Provide Direction

A properly prepared will can be an important part of an estate plan. Working with a qualified South Carolina estate-planning attorney, a will can help provide direction regarding matters such as:

• Who should receive property passing through your estate.
• Who you want to nominate to administer your estate.
• How property should be distributed among beneficiaries.
• Whether certain inheritances should be held in trust.
• Planning involving minor children.
• Blended-family considerations.
• Charitable gifts.
• Other wishes that are important to you and your family.

South Carolina law establishes priorities for appointment of a personal representative. Without proper estate documents, the person you would have chosen may not necessarily be the person with first priority to administer your estate.

Having a Will Does Not Necessarily Avoid Probate

People sometimes believe "I have a will, so my family won't have to deal with probate." A will generally provides instructions regarding assets passing through the probate estate. It does not, by itself, cause all of your assets to avoid probate.

South Carolina Probate Courts have jurisdiction over matters involving estates of deceased individuals, along with certain matters involving trusts, guardianships, conservatorships and powers of attorney. Depending on the circumstances, estate administration may involve determining whether a valid will exists, appointing a personal representative, identifying estate assets, identifying heirs and beneficiaries, addressing valid creditor claims, managing or transferring property, and distributing remaining estate assets.

Good estate planning is not necessarily about avoiding probate at all costs. It is about considering in advance which planning structure is appropriate for your family, assets and objectives.

Could a Revocable Living Trust Be Appropriate?

For some families, a revocable living trust may be an appropriate component of an estate plan. A trust can provide instructions for how property held by the trust should be managed during life and distributed after death. Depending on the circumstances and how the trust is established and funded, a trust may also help certain assets pass outside the traditional probate administration process.

• Minor beneficiaries.
• Financially inexperienced beneficiaries.
• Blended families.
• Beneficiaries with special circumstances.
• Real estate.
• Privacy considerations.
• Management of assets following incapacity.
• Continued management of an inheritance after death.
• More detailed instructions regarding when beneficiaries may receive assets.

Simply signing a trust document does not necessarily complete the planning process. Assets intended to be governed by a trust may need to be properly titled, transferred or otherwise coordinated with the trust based upon the advice of your attorney. Your legal documents, investment accounts, beneficiaries, property ownership and overall financial plan should be reviewed together.

Your Beneficiary Designations Can Be Just as Important as Your Will

One of the most important concepts in estate planning is that your will does not necessarily control every asset you own. Certain assets may transfer according to beneficiary designations or ownership arrangements rather than through your will.

• IRAs.
• 401(k)s and other employer retirement plans.
• Life insurance policies.
• Certain annuities.
• Transfer-on-death accounts.
• Payable-on-death accounts.
• Certain jointly owned property.
• Property already owned by a trust.

An outdated beneficiary designation can potentially produce a result that is inconsistent with the rest of an estate plan. Beneficiary designations and account ownership should be reviewed periodically and especially after significant life events such as marriage, divorce, the birth or adoption of a child, the death of a spouse or beneficiary, remarriage, retirement, a significant change in financial circumstances, moving to another state, purchasing significant real estate, or starting, acquiring or selling a business.

Estate Planning Isn't Only About What Happens After Death

One of the most overlooked parts of estate planning is incapacity planning. What happens if you are alive but temporarily or permanently unable to make financial or healthcare decisions? Consider who would have authority to:

• Handle financial matters.
• Pay bills.
• Deal with financial institutions.
• Manage property.
• Address business matters.
• Communicate with insurance companies.
• Make healthcare decisions.
• Coordinate care.
• Handle other important personal affairs.

A qualified estate-planning attorney can help determine which powers of attorney, healthcare directives and other legal documents are appropriate for your circumstances. Without appropriate planning, family members may face additional legal and administrative steps to obtain authority to act on your behalf.

Don't Leave Your Family a Financial Puzzle

Ask yourself a simple question: If something happened to me tomorrow, would my family know what to do? Would they know:

• Where your financial accounts are held?
• Who your financial advisor is?
• Which attorney prepared your estate documents?
• Where the original documents are located?
• Which insurance policies you own?
• What real estate you own?
• What business interests you own?
• Who your beneficiaries are?
• What recurring bills or obligations need attention?
• Who has authority to act?
• Where important digital information is maintained?
• What steps they should take first?

If answering those questions is difficult for you today, consider how difficult they could be for your family during an already stressful time. Organization is an important part of estate planning.

Estate-Planning Checklist

Every family's situation is different, but items to discuss with your estate-planning attorney, financial advisor and tax professional may include:

• Last Will and Testament
• Whether a revocable living trust or other trust planning is appropriate
• Durable financial power of attorney
• Healthcare documents and advance directives
• Primary and contingent beneficiaries
• Retirement-account beneficiary designations
• Life-insurance beneficiary designations
• Investment-account registrations
• Transfer-on-death or payable-on-death arrangements, when appropriate
• Real-estate ownership
• Business ownership and succession considerations
• Planning involving minor children
• Blended-family considerations
• Beneficiaries with special circumstances
• Digital assets and important online accounts
• Location of important financial and legal records
• Contact information for your attorney, CPA, insurance professional and financial advisor
• Instructions family members may need following death or incapacity

And once everything is completed, review it periodically. Major changes in your family, finances, residence, business interests or applicable law may create a reason to revisit the plan.

Common Questions

Start the Conversation Before You Need the Plan

Estate planning rarely feels urgent when everything is going well. Taking a few practical steps now — reviewing beneficiaries, organizing records and connecting with a qualified estate-planning attorney — can give your family clarity later.