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October 14, 2016

Tips on How to Avoid Probate in South Carolina

estate planning lawyer in Greenville SC

Probate is the legal process by which a deceased individual’s estate is settled. The probate process involves multiple steps to ensure the decedent’s wishes are carried out and the title of property passes to the intended heirs. It requires filing multiple documents with a court and having the court approve the distribution of assets. This makes the probate process fairly long and costly. In fact, it can take at least eight months (but sometimes years) to officially settle a decedent’s estate through the probate process.

 

Transferring assets outside of the probate process not only saves your estate time and expense, but it can also help your loved ones by reducing stress and keeping the distribution of your assets within the family, as opposed to subjecting your assets to the approval of an unforgiving court.

 

Below are four estate planning strategies you can utilize to pass on your property to your beneficiaries and avoid the probate process:

 

Establish a Revocable Living Trust

 

A revocable living trust is considered an effective “will alternative” where you can transfer your property to a trustee and hold it for your benefit, but preserving your right to revoke the trust. This means the trustee actually owns the property but is legally obligated to use it for your benefit under the terms and conditions you set forth when establishing the trust.

 

You may be asking yourself, “Ok, how does this avoid probate?” Simple – by transferring ownership of the designated property to the trustee, that property is therefore no longer part of your estate. This means it is no longer subject to the probate process. You can simply then instruct the trustee that, upon your death, they must transfer the property to your beneficiaries (i.e. friends and family).

 

To establish you a revocable living trust, you must draft a set of specific documents (similar to a last will and testament). This means you need to make sure you are following South Carolina law when you establish the trust. The best way to ensure your trust is legally valid is to hire an experienced Greenville estate planning attorney to oversee the drafting of the trust documents.

 

Ensure Your Property is Jointly Owned with Right of Survivorship

 

South Carolina allows property to be jointly owned with the “right of survivorship.” Basically, this means that when you pass on, the joint owner of the property assumes full ownership of the property at issue. This means the property is no longer subject to probate since the survivor automatically assumes, by law, ownership of the property.   

 

Creating a joint ownership with a right of survivorship generally requires a written document that sets out the joint ownership relationship, the property that will be held jointly between you and another individual (e.g. a relative), and the right of survivorship.

 

Tenancy by the Entirety for Married Couples

 

Tenancy by the entirety is a form of ownership only available to married couples. It works in much the same way as a joint tenancy with a right of survivorship. Basically, when you pass on, the surviving spouse assumes your ownership portion of the property.

 

Designated Death Beneficiaries

 

South Carolina enables you to designate a beneficiary upon your death on a variety of financial assets and instruments (e.g., checking accounts, savings accounts, etc.). Upon your death, these financial assets become the property of whomever you designate as the beneficiary. This means they are no longer a part of your estate and no longer subject to probate.

 

For example, you could use your retirement accounts, such as your IRA and 401(k) accounts, you avoid probate. When you establish these retirement accounts, you can name a beneficiary to the account who will assume ownership upon your death. This means if you are married, you can name your spouse as the beneficiary when you pass on.

 

ABC News published an article highlighting the importance of naming a beneficiary to your retirement accounts. The article discussed a family where the father had substantial financial assets and most of it was placed into his 401(k) retirement account. His stated desire was for his three adult children from his first marriage to be the beneficiaries of this account, but he did not have a designated beneficiary listed on the 401(k). He then married a new wife and after just two months of marriage, he passed away. In this situation, the new bride of two months received the 401(k) account.  

 

But watch out – naming a designated beneficiary to an account requires monitoring and updating (if needed). For example, if you name your spouse as the beneficiary, but get divorced and fail to update the named beneficiary on your account, you could wind up allowing your ex-spouse to become the owner of the account.   

 

Another option to consider is establishing a Payable on Death account. This type of account includes an instruction that upon your passing, the account will be inherited by your designated beneficiary.  Generally, these Payable on Death accounts are extremely simple to setup. You may even be able to set this account up by contacting a local branch of your bank and filling out a form naming the beneficiary. The beneficiary simply shows up to the bank with the proper identification and collects the account upon your passing.

 

If you own stocks, bonds, and other investment assets, you could complete a transfer on death registration. This allows you to transfer securities (e.g., brokerage accounts, mutual funds, stocks, bonds, and so forth) as well as motor vehicles without going through probate. Generally, all you have to do is sign a registration statement that declares who you want your securities and/or motor vehicles to go to when you pass on.

 

Reduce the Risk of Legal Pitfalls – Contact an Experienced Greenville Estate Planning Attorney Today

 

Effectively implementing probate avoidance strategies requires experience and knowledge of the probate process and what may be excluded from probate. That is why you should contact the Anderson Law Firm for your estate planning and probate needs. Our South Carolina probate law firm has been rated as Legal Elite of the Upstate since 2013 and is competent in estate planning, asset protection, and probate law. Contact a dedicated Greenville estate planning lawyer today.