Estate Planning and Probate 101 A Quick Overview for the Non-Probate, Estates and Trusts Practitioner, 0321 SCBJ, SC Lawyer, March 2021, #26

AuthorVictor Alexandru “Alex” Dorobantu
PositionVol. 32 Issue 5 Pg. 26

Estate Planning and Probate 101 A Quick Overview for the Non-Probate, Estates and Trusts Practitioner

No. Vol. 32 Issue 5 Pg. 26

South Carolina BAR Journal

March, 2021

Victor Alexandru “Alex” Dorobantu

When discussing estate planning it is important to consider your client’s intentions. Each individual client’s goals should completely shape the advice that attorneys provide and will also likely impact the final legal documents that are prepared to accomplish their unique objectives. In general, estate planning can be described as passing one’s assets to one’s beneficiaries. Most often this process will involve some balancing of the grantor (the person executing the document/your client) controlling all the property while alive and competent with attempts to save as much in taxes and fees as possible at the time the property is ultimately transferred. There are different ways to plan for the transfer of one’s assets with one of the largest variables always being the nature of the assets.

There are also a variety of beneficiary types that can be involved in any potential client’s plan, and it is important to consider the tax ramifications of the transfers and distributions to such individuals or institutions as well as any potential creditor risk that they may be exposed to at the time of the theoretical transfer.

For the attorney who does not focus on estate planning, it is important to remember to get as much information on the front end as you can. A robust intake form listing all assets, heirs and other beneficiaries is something that can be tremendously helpful for the practitioner to have during the initial meeting.

Intestate succession – Why Does this occur? And ways to avoid

In South Carolina any part of a person’s estate that is not disposed of via a will passes under intestate succession (SC Code Ann. § 62-2-101). This is in fact an over simplification of sorts. Many times clients can accomplish their individual planning goals by using proper titling of assets and beneficiary designations. Exactly what the correct titling will be is something t hat is completely determined by the nature of the assets involved as well as the intended beneficiary.

The addition of another name to an individual’s assets can have a significant impact as to how they are factored into the individual’s estate. Certain titling techniques can be used to avoid probate completely for some assets. One common example of this is the use of the phrase, “joint tenants with rights of survivorship and not tenants in common” behind a husband and wife’s name on a home deed. This “magic language” will allow a surviving spouse to avoid probate as to any real property that has this wording.

An example for the non-practitioner:

A home owned by two individuals listed as “joint tenants with rights of survivorship” will avoid probate if one individual is alive and takes the death certificate of the deceased individual to the local Register of Deeds Office, along with a fling fee, to remove the decedent’s name. However, if the two individuals were simply listed on the deed together, without the words “joint tenants with rights of survivorship” this would necessitate probate as to the deceased individual’s 50 percent interest. This applies even if the two individuals are a married couple or a parent and child.

Another way to avoid probate is adding the word “or.” On some accounts or vehicle titles listing another person’s name makes these assets transfer immediately to the joint title holder upon the other title holder’s death.

On the other hand, adding additional owners to any assets, regardless of the relationship between the original asset holder and the proposed additional owner, can be risky. By adding another name to a bank account or car title, the original owner of the asset may be exposing his/her asset to existing or potential creditors tied to the additional new title holder.

Other assets such as life insurance policies, 401ks, IRAs, 403bs, SEPs, and Roth type accounts can be set up to pass directly to an individual’s beneficiaries. All financial institutions have their own internal forms for beneficiary designations that can and should be on file for every...

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