Decanting is a new statute in South Carolina that was effective January 1, 2014. The concept of decanting is codified at S.C. Code Section 62-7-816A. Technically speaking, decanting is the ability of a trustee to make a distribution from one trust to another trust - rather than to a beneficiary of the first trust. While this sounds quite mundane, it is quite a powerful concept because the second trust need not have identical terms as the first trust. This allows the trustee to modify a trust that is otherwise irrevocable. Decanting gets its name from the concept of pouring wine into a decanter (a new vessel) in order to improve the wine. The trustee of the original trust is pouring the assets of the original trust into a new vessel, the second trust in order to improve the trust.
What is Trust Decanting?
LLC vs. S Corporation
In order to truly understand the difference between limited liability companies ("LLCs") and corporations taxed pursuant to Subchapter S of the Internal Revenue Code ("S Corporations" or "S Corps"), it is important to realize that businesses exist within two different realms. The first realm is the state law realm which governs the interactions between the owners, the board of directors, the managers, and the like. The second is the realm of federal and state taxation, which have their own sets of guidelines that focus not on what the business can do, but the tax consequences of what the business does. The two sections below describe the similarities and differences between S Corps and LLCs for state law purposes and tax purposes.
How long does the probate process take?
The probate process is the process by which an estate is administered and property is transferred to the beneficiaries of the estate. If there is a will, the person who has died (often called the "decedent") is said to have died testate, and if there is no will, the person is said to have died intestate.
Member-Managed LLC vs. Manager-Managed LLC
One way limited liability companies ("LLCs") are classified, for state law purposes, is either member-managed or manager-managed. This classification clarifies who may legally bind the LLC. The easiest way to explain these concepts is to discuss what an LLC is not and therefore, why it is necessary to clarify who may act for and bind the LLC.
What is a Durable Power of Attorney?
A power of attorney is a document whereby one individual, referred to as a "principal," authorizes another individual, referred to as an "agent" or "attorney in fact," to act on behalf of the principal. In most cases, the agent must act in the best interest of the principal, but an agent is given substantial power.
Do I need a revocable trust?
Revocable trusts are marketed by financial planners, accountants, and estate planning attorneys as being the solution to the burdens of probate. While revocable trusts are beneficial, depending on the size and composition of the estate, they may not be right in every situation. This post will outline the benefits of a revocable trust and the costs associated with a revocable trust to help you, the reader, understand whether or not they are worth the time and expense.
