Many people in South Carolina and throughout the nation procrastinate when it comes to estate planning. This is because it can be uncomfortable for individuals to contemplate their own mortality. However, it can be in a person's best interest to create a revocable living trust as soon as possible. As the name implies, the trust is in force while a person is still alive, and its terms can be changed at almost any time.
People in South Carolina and throughout the country who get divorced after the age of 50 may face unique estate planning challenges. TD Wealth conducted a survey of 112 financial professionals to determine what those challenges may be. Of those who responded, 39% said that getting divorced later in life can increase the cost of retirement. Those respondents also said that ending a marriage could make it harder to adequately fund a retirement.
A revocable living trust can help individuals hold their assets. Some South Carolina residents who have a trust may wonder if they should use it to hold a 529 college savings account for a child's future education.
While most estate owners in South Carolina probably have heard of wills and trusts, some may not understand the difference between the two. Trusts can help individuals manage their assets while they are alive. On the other hand, wills dictate how assets are disbursed after the creator dies. In some cases, a will can contain instructions to transfer assets into a trust when an individual passes. The level of control one retains over a trust depends on what type of document is created.
Ideally, a South Carolina resident will form an estate plan before they become ill or pass away. However, it can be difficult to bring up the subject of money or a person's mortality. Regardless of who starts the conversation, it should be brought up in a gentle and respectful manner. Instead of focusing on uncomfortable subjects like death or taxes, it may be best for parents to talk to their kids about their financial values.
People in South Carolina who have a revocable trust that they want to revoke should take certain steps to ensure that their wishes are carried out. For example, two parents wanted to cancel their revocable trust, in which they had placed their estate that was worth $2 million, and they wondered whether a handwritten letter of revocation would be sufficient.
There are several reasons why a South Carolina resident may procrastinate on creating an estate plan. For instance, it can be uncomfortable to talk about death with family members and potential heirs. The cost of an estate plan may also be a roadblock. However, those who have not yet created their estate plan are advised to do so as soon as possible.
Many South Carolina residents work long and hard to give themselves financial security during their working years and beyond, which includes, hopefully, a long, healthy and happy retirement. People are living longer, and retirement living is becoming more costly. Moreover, unexpected medical expenses can eat up sizeable chunks of money. However, if it is anticipated that an individual's estate assets will be considerable, estate planning becomes even more of a concern than it is for people with less property. Although a will can suffice as a means to designate which beneficiaries are to receive which estate assets, a trust can also do so but with more precision and control.
With the majority of families in South Carolina deviating from "traditional" (opposite-sex married partners with biological children), estate planning can become more complicated. People might have to consider whether or not their biological children and stepchildren will inherit similar amounts. Cohabiting couples might lack the same legal rights as legally married couples in the event of incapacity or death. Their estate plans would need to address issues that the law might not automatically cover. Modern developments in estate planning legal tools and language have emerged to help people in nontraditional families introduce flexibility into their plans and avoid unintentionally excluding loved ones.
It may be easier for special needs individuals to retain access to government services if their assets are held in a trust. However, it is important that their South Carolina parents carefully structure the trust so that it is exempt from income and resource rules. Special needs trusts must irrevocable, for the benefit of only one person and can only pay for medical or dental needs not provided by other sources.