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Bluffton South Carolina Estate Planning Law Blog

The benefits of having a living will

Many estate owners in South Carolina have heard that they should have a living will. However, they may not be fully clear about what this document represents. A living will is also called an advance health care directive. This document provides specific details about how a person's health care needs should be addressed if he or she is incapacitated and unable to make decisions about treatment. It can be a complex and emotionally challenging process to draft a living will because people will need to consider difficult topics about death or serious illness throughout the process.

At the same time, creating an advance health care directive is often very important. Many people have strong convictions about what they want to happen in case of a severe injury and reliance on life support. Because of the document's name, many people think a living will is part of a will, the document that specifies how property should be divided after death. However, a living will deals with health care decisions. There are other kinds of documents, such as a living trust or a financial power of attorney, that people may want to create so that their assets and funds will be properly managed.

Trusts provide flexibility in future planning

Trusts have helped many people in South Carolina plan for the future. By creating a trust, people can develop a plan that not only cares for their assets at the present time but can distribute them after death. Trusts give people much greater levels of control and flexibility in determining how their assets will be handled after they pass away. They allow people to make plans for legacies of generational wealth or create a mechanism for charitable giving and philanthropy. In addition, people who create trusts have much higher levels of privacy, as they are not considered public documents and do not go through the probate process.

Trusts also provide a more secure, trustworthy method of passing assets on to minor children. By naming a trustee, parents can ensure that their children have access to funds but will not receive their full inheritance until they are able to handle it. They may also be able to create conditions to give people access to these funds. They can also be very important for family members of people with special needs. Certain types of trusts allow people to pass on assets without hurting their loved ones' eligibility for key government programs.

Pet care provisions in estate plans

About two out of three households in South Carolina and around the country own a pet. Many people see their companion animals as cherished members of the family. Pets may be placed in shelters when their owners die, and they are often euthanized if they are not adopted. Adding pet provisions to a will is not a solution to this dilemma because a will provides no ongoing control over how animals are treated. It could also be several months before a will is probated.

Pet owners who wish to ensure that their companion animals enjoy a happy life after they are no longer able to provide care may wish to consider a pet trust. Placing animals into a trust avoids probate and allows the creator to set strict guidelines for how their pets will be cared for. Pet trusts can be separate documents or incorporated into existing trusts.

Confusion continues to muddle estate planning efforts

There are no shortages of reasons why many South Carolina residents fail to complete the estate plan the vast majority of them fully understand they should and intend to establish. Of course, there is the uncomfortable thought of dealing with one's own mortality, but sooner or later everyone needs to confront that reality. And for many, there are difficult decisions or perhaps no good choices when it comes to dividing up assets among beneficiaries. But it's also true there is simply a common lack of understanding regarding what purpose individual estate planning documents serve and how they work together to protect the individual's interests.

Legal commentators point out a great deal of confusion exists because the terminology that has developed over the years has been anything but clear. For instance, a common form of trust that an average person or couple can employ may properly be called a 'living trust," but a 'will" and a 'living will" are two entirely different documents. Additionally, although a will and a trust are two distinct documents, both can accomplish many of the same estate planning objectives.

Trusts for young beneficiaries

People in South Carolina who have young children should not limit their estate plan to just a will. In order to ensure that the assets they set aside for their children will be properly managed, the inclusion of a trust is necessary. A trust can be used to manage the assets so that they can be long-term resources for the intended beneficiaries.

A trust can be used to create financial guidelines and boundaries for young beneficiaries. A trustee can help the beneficiaries create an income flow that will not only address their needs but also ensure that the principal in the trust remains intact. One of the trustee's duties can also be to instruct the beneficiaries on financial literacy so that when the beneficiaries are allotted more responsibility of the assets, they will have the skills necessary to properly manage them.

How to protect a business through estate planning

Estate plans can help anyone protect assets or ensure that his or her final wishes are carried out. However, those who own businesses in South Carolina or anywhere else should have an estate plan in place to protect their companies. Creating a plan may help ensure that the surviving spouse will have the financial resources that he or she needs after the business owner dies or becomes incapacitated.

In some cases, it may be best to sell the business and give the money to the surviving spouse. The other spouse could also be allowed to run the company and keep it in the family. If another person partially owns the company, it is a good idea to consult with that individual when making an estate plan. This is because a business partner might not want to be involved with the decedent's spouse.

The uses of a spendthrift trust

Some people in South Carolina might be considering using a trust as part of their estate plan. A spendthrift trust can help ensure that assets are protected against a beneficiary's irresponsible spending. It can also protect assets against creditors.

A trustee is placed in charge of a spendthrift trust. The trustee may be an individual or may be a corporate entity. The trust outlines how distributions are supposed to be made, and the trustee is responsible for making those distributions. A beneficiary would be unable to use the assets in the trust as collateral on a loan. If the beneficiary defaulted on a loan, creditors would be unable to access the principal of the trust.

Why people should keep only one signed will

When people in South Carolina make a will, they may know just how important it is to keep a signed copy of this key estate document safe and secure. People make wills to determine how their assets will be distributed after they pass away. By planning for the future, they can specify the use of their property without relying on the state law standards. Estate planning is especially important for wealthy people, but it can help people of any means. Family members will find that dividing assets is an easier process if a clear, legal will is available, and they will generally spend less time and money in probate court.

However, because people know that their will should be accessible and available in the event of their death, some may be tempted to keep or distribute several signed copies. People may want to pass copies to their children or to trusted advisors. However, many estate planning lawyers advise against this practice. After all, a will can be edited and changed by the creator as long as he or she is competent. This means that people may wind up with several different versions of their will floating around and even being entered into probate court.

Why a pour-over will can be important

People in South Carolina who are using a trust in their estate plan may also want to create a pour-over will. The purpose of a pour-over will is to place all assets not already in the trust or passed using other methods, such as beneficiary designations, into the trust.

A pour-over will can be useful because it is not uncommon for people to forget to add new assets to a trust. If a person dies and there are assets that are not covered by a will, a trust or other means, the assets will go the next of kin. This is generally the spouse and children. It can mean that a family member from whom a person is estranged might receive an inheritance while another family member who was supposed to receive it might get nothing.

Tips for choosing a trustee

A trust can be a powerful tool in an estate plan by protecting assets from creditors or in a divorce. When shares of a family business are placed in a trust, the voting rights are held by the trustee instead of the beneficiaries. This may help ensure that votes are made with the good of all beneficiaries in mind instead of the self-interest of just one person. Some people in South Carolina may want to build their estate plan around a trust, but it is important to have the right trustee.

People often default to appointing a spouse. However, a spouse who is close in age might become incapacitated or die soon after. A spouse could be unduly influenced by some family members. Or, the spouse could remarry, and the assets in the trust might pass to the new spouse's family. In a blended family, appointing a spouse as trustee could create a rift with the stepchildren and end up in litigation. Some of the same dangers could arise if an adult child is appointed as trustee. The child might simply have no interest in acting as trustee.

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