Estate planning is a crucial process through which you make arrangements for your property and the members of your family after you die. 

No matter how many assets you own or how little, an excellent estate plan will help you avoid legal issues and pay as little taxes as possible while providing you with a sense of security. 

Estate planning in South Carolina involves various stages and each of them is aimed to solve certain issues regarding your finances and your person. 

This guide will guide you through the seven essential steps when making an estate plan in South Carolina.

Step 1: Evaluate Your Present Position

Estate planning starts with an evaluation of one’s financial status. Always it is relevant to know what you possess and what you owe before organizing the best estate planning strategy to meet your objectives.

To determine your financial worth, first of all, it is necessary to make a balance sheet of the current assets and liabilities. This refers to houses, cars, businesses, accounts in banks, retirement benefits, shares or bonds, furniture, and any other valuable items. On the liabilities side, record down mortgages, loans, credit card balances, and any other balances that are owed. 

It is important to understand your net worth so you can properly plan out how your assets will be divided and whether or not your estate can pay for any expenses that may come up after you are gone.

Knowing your financial profile is especially crucial in South Carolina because of the unique probate laws and rules regarding property ownership. 

Furthermore, if you own real estate with someone else as tenants in common, you should also know how the real estate will pass upon your death through probate or through the operation of law. 

Knowledge of your financial environment enables you to address these state-specific factors in your planning proficiently.

Step 2: Where to Begin Setting Up Your Estate Planning Goals

Now that you’ve outlined your financial position, the next thing you need to do is to determine your goals in estate planning.

Of course, your goals may differ due to your personal situation and what is important to you. People use estate planning to help their families, maintain wealth for their descendants, avoid high taxes, protect children, and name guardians in case of disability. 

These objectives have to be arranged in order to make sure that your estate plan corresponds to your intentions. The definition of objectives will help to align your assets to your values and to check if you have taken into consideration any specific personal or family circumstances.

For instance, South Carolina has no estate tax, which makes a difference when it comes to the division of property or to the management of wealth. 

If you have a worry about supporting a spouse, children, or other dependents, be sure to assimilate the rules governing elective share and spousal rights.

Step 3: Choose Your Beneficiaries

The selection of your beneficiaries is one of the most critical aspects of the process of estate planning. Beneficiaries are the people or companies who will benefit from your property in the event of your demise and this decision helps you determine how your property will be divided.

In choosing the beneficiaries one has to go beyond the mere preparation of a will and testament. For many of the assets, you should name both the first-choice and second-choice beneficiaries, which include life insurance policies, retirement plans, and payable-on-death accounts. 

It is crucial that your property is transferred to those who are supposed to inherit it in order to avoid problems with probate or inheritance.

There are certain legal requirements that one has to meet in South Carolina when naming beneficiaries. For instance, elective share laws In South Carolina guarantee that a surviving partner possesses rights to some share of your property, even if they are not in the will. 

It affects your assets and again if you want to provide for or discourage a spouse this law has to be considered. 

Moreover, some other property such as property owned by others, life insurance, or tangible personal property may also be transferred directly to the beneficiary without going through probate as provided by the law of the state. 

Step 4: Develop Essential Legal Papers for Wealth Management

Drawing of the legal documents is one of the most important processes of estate planning. These documents guarantee that your intentions are well communicated, and most importantly, that the distribution of your property will be done as per your instructions.

The core documents of an estate plan include a will, trust, power of attorney, and advance healthcare directive:

Will

This is a formal legal document that spells out how you want your property to be divided and who should take care of the best child support.

Trust

Trust is similar to a will and enables you to pass property to beneficiaries while you are alive or after your death and may assist in avoiding probate. 

Trusts can also shield property and cater to the young or the disabled on matters concerning the property.

Power of Attorney

This document specifies who will be in charge of your financial decisions in case of disability.

Advance Healthcare Directive

This comprises of a healthcare power of attorney and a living will, in the event that your preferences about your health cannot be expressed.

These documents should be drafted by an experienced estate planning attorney as each is tailored to the client and properly prepared.

South Carolina also honors health care powers of attorney which enable you to appoint an individual to make healthcare decisions and express your wishes concerning your treatment when you are in a terminal condition.

Step 5: Minimize Estate Taxes

Estate taxes are an important component of estate planning and saving on estate taxes is the main goal. 

While federal estate taxes may only come for a limited number of estates, there are still strategies that can help to minimize potential tax burdens and make sure that even more of your property gets to the intended heirs.

The following are possible ways of reducing estate taxes; you can give out portions of your wealth to your loved ones while you are still alive, you can open trusts and you can donate to charity. For instance:

Gifting

You can also lower the amount subject to taxation by giving up to the exclusion amount to your beneficiaries during your lifetime. 

Trusts

There are different types of irrevocable trusts such as bypass trusts or charitable remainder trusts which can protect assets from estate taxes and at the same time facilitate wealth or charity distribution.

Charitable Donations

By contributing a proportion to charity, not only do you benefit your estate by minimizing the amount that can be taxed but you also support causes you believe in.

All of these strategies need to be well thought out in order to support the overall estate objectives and to meet the legal requirements.

Unlike some other states, South Carolina has no estate or inheritance tax to discourage lawmakers from changing that.

Step 6: Select the Executors and Trustees

It is, therefore, necessary to select the right executor and trustee in order to meet the desired intentions of the will. 

Such people or organizations will perform the functions of managing your property, making payments on your behalf, and distributing the inheritance.

Executor

The executor is the person that you nominate in your will and who is legally responsible for the administration of your estate once you are gone. 

Some of the responsibilities are; submitting your will to the probate court, collecting your property, paying the debts and other legal fees, and dispersing the remaining property to the beneficiaries. 

A good candidate should be honest, highly organized, and should be able to perform complicated accounting operations.

Trustee

When you establish a trust, the trustee is liable for the administration of the trust property as well as the distribution of the same. 

It can involve one or more people, and the selection of a trustee can be a family member, a friend, an attorney, a bank or other financial institution. 

South Carolina law also permits the nomination of co-executors or successor executors in the event that your first choice is unable to act. In the same way, the way that trusts are administered in South Carolina is regulated by the South Carolina Trust Code. 

This appointment may last for years or even decades depending on the type of trust that has been created.

Step 7: It is recommended that you review and update your estate plan at least once a year

An estate plan is not something that may be developed and then left dormant. There are many reasons to review your estate planning documents; life events, changes in finances, and updates to laws. 

Most plans need to be reviewed and updated periodically to ensure they are still relevant to the current needs and objectives.

Any major life change like marriage or divorce, birth of a child, or death of a beneficiary should make you review your estate plan. Some of the changes that need to be made include; changes in financial status, for example, receiving an inheritance or selling a major asset. 

Also, changes in tax legislation or estate planning provisions may affect your plan in one way or the other. 

Also, a shift in the federal tax laws will have an impact on taxes for the estate. Having an estate plan reviewed periodically by a South Carolina attorney can help to make sure that the estate plan is in compliance with the laws of the state and has incorporated any recent changes in the laws. 
Don’t navigate the estate planning process on your own. Contact Max Hyde Law Firm today for peace of mind at (864) 804-6330 to schedule a free consultation. Our knowledgeable attorneys are ready to guide you through each step of creating a comprehensive estate plan, ensuring your assets are protected and your wishes are honored.