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Bluffton South Carolina Estate Planning Law Blog

About revocable living trusts

People in South Carolina may consider using a revocable living trust as part of their estate plan to address issues that cannot be rectified with a will. A living trust is one that is created during an individual's lifetime and is useful in helping them with asset management and with ensuring that their wishes are carried out if they become incapacitated.

The majority of living trusts are created so that an individual has the option to revoke them or change the provisions at their discretion. Because they can be revoked or amended, and thereby included in the estate, they cannot be used to avoid being assessed taxes on the estate. However, they can be used to bypass the probate process.

Popularity of pet trusts growing

If you ever wanted a great trivia question to break out at cocktail parties, just ask what Gail Posner, Alexander McQueen, and Leona Helmsley all had in common. After getting past the quizzical looks you’ll probably receive, you can reveal that all of them (who were wealthy individuals) all created trusts for their pets. After they passed away, the trio left an average of $13 million for the care of their dogs.

Like many aspects of estate planning, creating pet trusts is not exclusively left to the wealthiest of Americans. In fact, more pet owners of meager means are leaving money to care for their pets. The American Pet Products Association reports that 12 percent of dog and cat owners made provisions in their wills for this purpose in 2016.

What is Trust Decanting?

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.

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.

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