The Kouten Law Firm, LLC offers introductory answers to frequently asked questions about Estate Planning, Estate Administration / Probate, and Adult Guardianships and Conservatorships. Click on a subject heading below to view questions and answers relating to your selection.
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Do I need a Will?
Generally, everyone should have a Will. If you die without a Will, the State of South Carolina will draft your Will for you. If you are married, the South Carolina Probate Code will deem your spouse as heir. If you have children and are married, half will go to your spouse and half will go to your children. This can be a problem, particularly if your children are minors. The problem may be worsened if you have a child who is eighteen years old and other children are minors. The court will seek to appoint Guardians ad litem for the minor children and increase the cost of administration. The purpose of a Will is to make sure that your assets pass to the proper persons with as little time, trouble and expense as possible.
How much does a will cost?
The cost of a Will depends upon the complexity of the Will. A Will may be a fairly straight forward document between a husband and wife or may include numerous trusts. It is difficult to give the cost of a Will until you have had a chance to meet with the attorney to determine what type of Will provisions you may need in order to accomplish your goals.
How do I designate a guardian for my children?
A guardian for minor children can be designated in your Will or may be designated by a separate document. The requirements for designation of a guardian are very strict if a document other than a Will is used.
If my children are minors, how do I leave my estate to them?
Minor children cannot directly receive an inheritance. Generally, any assets left to a minor would be held under the supervision of a conservator until they turn eighteen. A better alternative is to leave the minor's share in a trust for them and designate a trustee to hold their money and make expenditures for them outside of the probate court.
What is a trust?
A trust is an entity used to hold assets for the benefit of one or more beneficiaries. The assets are managed by a trustee during the term of the trust. The trust can continue for a person's lifetime, for a particular term of years or to a particular age.
Are there different kinds of trusts?
There are many different kinds of trusts used to accomplish different purposes. A trust may be revocable or irrevocable. Some trusts begin operating during the trust creator's lifetime. Some trusts begin to operate at a person's death.
What is a living trust?
A living trust is an inter vivos trust that begins to operate during the trust creator's lifetime. It is generally revocable and amendable during the trust creator's lifetime. At the trust creator's death, the trust may then terminate and be distributed to designated persons or may continue for other beneficiaries. There are advantages and disadvantages to a living trust. It is appropriate in some cases, but not in all cases.
Is a living trust better than a will?
A living trust is neither better than a Will nor worse than a Will. It is merely a different vehicle to use for passing assets. In some cases it becomes more difficult to pass assets through a living trust than a Will and in other cases a living trust is preferable to a Will. A living trust is a tool to use in a person's estate plan, however, it should not be viewed as the solution to every problem. As estate planners, we will evaluate the assets, the objectives of the client, and the situation regarding beneficiaries. In many cases the probate of an estate can proceed quicker and be less costly through a Will than through a living trust.
Will a living trust avoid probate?
A living trust may pass some or all of the assets outside of the Will. In some regards it may act as a Will substitute; however, in some cases the cost of the probate of passing assets through a Will may be less than the cost of creating a living trust. A living trust may cause some assets to be more difficult to manage during a person's lifetime.
What is the estate tax exemption amount?
In 2009 the estate tax exemption amount was $3,500,000.00. The exemption in 2010 and 2011 will depend on which is more beneficial to the estate based on the new estate exemption.
If i die without a will, will my assets pass to the state?
If a person dies without a Will, his/ her assets will pass to heirs as determined under the South Carolina Probate Code. It is possible for assets to pass to the state, but only if no heirs can be located.
If my life insurance has a designated beneficiary, does that take precedence over my will?
A life insurance beneficiary designation naming someone other than the decedent will effectively remove the policy proceeds from the probate process. Life insurance does not take precedence over a person's Will, the proceeds are not included in the estate.
Can I use legal software to prepare my will?
The drafting and preparation of a Will is not necessarily a simple matter. A person is taking a significant risk in preparing a Will themselves since South Carolina law is very specific as to Wills. A court may determine that any defect in a Will invalidates the entire Will. The money you may save in preparing your own Will may be a small amount in comparison to the additional costs incurred in dealing with an estate using a Will that has a defect or that may not even be valid.
I have a will from another state, is it valid in South Carolina?
If your Will was validly executed in another state, it will be recognized as valid in South Carolina. There are, however, differences from state to state relating to the procedures and court supervision of personal representatives. If you have a Will executed in another state, it is best to review your Will and revise it if necessary.
How often should I update my will?
You should update your Will whenever this is a significant change in your assets or family situation. You should also review your Will with an estate planning attorney every 3 to 5 years to make sure that there are no changes in federal or state law that may impact your estate. Other events that may impact you regarding your Will are changes in family and financial circumstances.
What is probate?
Probate is the process that transfers legal title of property from the estate of a person who has died to his or her proper beneficiaries or heirs. The purpose of a probate proceeding is to settle every possible claim so that title to the assets of the estate passes to the rightful beneficiaries/ heirs free and clear of adverse claims.
How does probate start?
In South Carolina, the probate process begins when a petition and original last will and testament are submitted to the Probate Court in the county where the decedent lived, died or owned property. Included in the petition is the decedents date of death, the name of the personal representative, the beneficiaries named in the will or the heirs if there is no will, and the estimated value of probate property and assets passing through the estate.
How long does probate take?
In South Carolina, there is no set timeline for the probate process. There is a mandatory eight month waiting period for creditors to file a claim against the estate, but this does not necessarily mean an estate will be closed shortly thereafter. The length of time is dependent on factors such as the amount of probate cases backlogged in the county, amount of time it takes to locate and notify all heirs, and whether or not there are objections to the process by beneficiaries/ heirs. The process will take much longer if there are objections to the will or to the appointment of the personal representative.
Who is in charge of the probate process?
If there is a will, the person named as personal representative will usually be appointed as one with authority to administer the estate. This person is responsible for managing the estate and following probate rules and procedures. If there is no will, or if the will doesn't name a personal representative, or the person named as personal representative in the Will is unable or does not want to be personal representative, the probate court will appoint someone to handle the process.
Can I handle probate without a lawyer?
While there is no requirement to use a lawyer, probate is a formal procedure and can be complicated. A personal representative can be personally liable if he or she does something wrong. In the case of complex estates or complicated family matters, however, an attorney should be retained. Typically, transfer of deeds for real estate are best handled by an attorney.
What happens if I just ignore probate?
Ignoring the need for probate is not a good idea. Failing to probate an estate may lead to complex problems years later when properties need to be sold or assets need to be converted. South Carolina will not accept the provisions of a Last Will if ten (10) years has passed since the decedent's death. Estate administration and transfer of property in these circumstances potentially create difficulties which can cost far in excess of what a timely probate would have cost.
Does all property have to go through probate?
No. The South Carolina Probate Code defines what property is considered probate property and which assets of the decedent pass to beneficiaries free of probate. Real and personal property owned with a joint tenant passes to the surviving co-tenant(s) without going through probate. Other types of benefits, such as a life insurance policies or annuities payable directly to a named beneficiary bypass probate. Additionally, money from IRAs, Keoghs, and 401(k) accounts transfer automatically, outside probate, to the persons named as beneficiaries. Any of the above assets/ benefits with the decedent named as beneficiary or those having no named beneficiary become assets of the estate.
What is a guardian?
A guardian is an individual or agency appointed by the County Probate Court to exercise powers and rights over an alleged incapacitated person. Any competent person or suitable institution may be appointed to act as guardian. Although family members are preferred, certified and trained third parties may be considered when necessary.
Why might a person need a guardian?
A person will need a guardian if he/she is declared legally incompetent to make certain decisions. However, a guardianship should never be the only form of decision-making support. The ward should be included in any plan that addresses decision-making support. How involved a ward will become depends on his/her capabilities.
What is the guardianship process?
A guardianship is a formal proceeding, and as such, it is important to retain an experienced elder law attorney to assist in the guardianship process. A person applies for guardianship by filing a petition with the Probate Court in the county in which the ward resides. Once the petition has been brought before the Court, the judge will appoint a Guardian Ad Litem (GAL) to review the case and to make recommendations to the Probate Court. The GAL must inform the proposed ward of his/her right to contest the petition. The judge will also appoint two (2) designated examiners, one of whom must be a medical doctor, to evaluate the ward and each must submit a report to the Court.
The petitioner or his/her attorney must notify all interested parties of the guardianship petition and notice of court hearing. The Court will make a ruling on the guardianship petition at the hearing.
What if there is an emergency and I need a guardianship right away?
If you have filed a petition for guardianship and there is an immediate need for the court to appoint someone due to an emergency, you may file an ex parte petition for emergency temporary guardianship of the alleged incapacitated person. An emergency temporary guardianship is granted only if there is a true emergency, such as the abuse of the ward or a need for immediate medical treatment. The emergency temporary guardianship is only in place until a temporary guardianship hearing is held.
What do I do when I get a call from the police saying that my mother or father has been taken somewhere?
Elder intervention on behalf of a municipality or county is a serious matter. In the event this occurs, you must immediately seek legal counsel who is versed in handling probate issues of guardianship, conservatorship, and competency.
If you do not, often times, things will happen without your knowledge, and you will struggle gaining control over the outcome.
What are the powers and duties of a guardian of the person?
In general, a guardian of the person is a fiduciary and is held to the high standards to which all fiduciaries are held in caring for the ward. Unless the guardian's duties are restricted by the court, the guardian of the person is entitled to the charge and control of the ward and has the right to establish the wards' domicile, the duty of care, control and protection of the ward, the duty to provide the ward with clothing, food, medical care and shelter and the power to consent to medical treatment.
South Carolina Code of Laws § 62-5-312 sets forth the general powers and duties of Guardian.
How is a guardianship terminated?
Sometimes it becomes apparent that a guardianship never should have been granted for the person with a disability. Additionally, that person may no longer need a guardian and has regained the ability to make some or all life decisions. In such cases, it is appropriate to approach the probate court with a motion to terminate a guardianship, or a motion to reduce a guardianship to a limited guardianship.
The court will look to medical documentation indicating the prior incapacity has ceased or lessened.
What is a conservator?
A conservator may be an individual person, institution or agency appointed by order of the Probate Court to make financial decisions and handle financial affairs when an individual lacks the capacity to manage them on his or her own. The conservator must make periodic reports to the court and petition the court for additional expenditure authority under certain circumstances.
Who may need a conservator?
It may be necessary to petition a court to appoint a conservator for a person who has a physical or mental problem that prevent him/her from managing his/her own financial affairs and who has no person already legally authorized to assume responsibility for him/her. At times, it may be found that those authorized to make financial decisions do not consider the best interest of the alleged incapacitated party. In these cases, a conservator may be appointed to assistance with financial management to adequately protect him/her.
What is the conservatorship process?
A conservatorship is a formal proceeding, and as such, it is important to retain an experienced elder law attorney to assist in the conservatorship process. A person applies for conservatorship by filing a petition with the Probate Court in the county where the ward resides. Once the petition has been brought before the Court, the judge will appoint a Guardian Ad Litem (GAL) to review the case and to make recommendations to the Probate Court. The GAL must inform the proposed ward of his/her right to contest the petition. The judge will also appoint two (2) designated examiners, one of whom must be a medical doctor, to evaluate the ward and each must submit a report to the Court. The petitioner or his/her attorney must notify all interested parties of the conservatorship petition and notice of court hearing. The Court will make a ruling on the conservatorship petition at the hearing.
What are a conservator’s duties?
The first duty a conservator has is to take an inventory of the legally incapacitated person's assets, and to report those assets to the court in the form of an initial accounting. If the conservator will be paying money on behalf of the legally incapacitated person, it will be necessary to open a special checking account reflecting the conservatorship. The conservator will be responsible to account for all expenditures, and for the assets of the estate, typically on an annual basis or more frequently if ordered by the court.
South Carolina Code of Laws § 62-5-424 sets forth the powers of a Conservator in administration.
What is the purpose of court supervision?
The court supervises the Conservator's actions by requiring that permission be obtained in advance of certain major transactions (such as the sale of a legally incapacitated persons home or other real estate), and through annual accountings, in order to ensure that the legally incapacitated person's assets are being properly managed, bills are being paid, funds are not misappropriated, and the estate is not being wasted.
How can a conservatorship be ended?
A conservatorship can be terminated by the court in which it was created. This ordinarily happens if the legally incapacitated person recovers from the incapacity that necessitated the conservatorship. A conservator’s role may be terminated by the court or by resignation of a conservator. In the case of resignation, the court will ordinarily appoint a successor conservator to take over management of the legally incapacitated person’s assets. A conservatorship also ends upon the death of the legally incapacitated person.