There is a legal process that enters the picture when you record your final wishes in a simple will. You name an executor to act as the administrator, and the will is admitted to probate after your passing.
The probate court will supervise while the estate is being administered. Final debts are paid, and the assets are identified, protected, and prepared for distribution to the heirs.
After all the tasks are completed, the court will close the estate and the beneficiaries receive their inheritances.
This is the process that applies to probate property, but there are some types of transfers that are not subject to probate, and we will look at them in this post.
There are some probate shortcuts that can be used to transfer property that would otherwise be subject to the full process.
In South Carolina, property can be claimed with an affidavit if its value does not exceed $25,000. There is also a simplified summary probate procedure available for estates that are valued at $25,000 or less.
Payable on Death Accounts
When you open an account at a bank or brokerage, you can add a beneficiary. This is called a payable on death or transfer on death account.
The beneficiary would have no access to the funds while you are living. After your passing, the beneficiary would present the death certificate to the institution and assume ownership of the account.
Some people think that a payable on death account can be part of a homemade estate plan, but there are limitations. Depending on the rules of the institution, you may be able to add multiple beneficiaries, but you would typically have to allow for an equal split of the resources.
Sometimes a person will add one beneficiary and tell them to distribute the assets in a certain way. These verbal instructions would not be legally binding, so this is a very risky approach that is hard to justify.
Joint Tenancy With Right of Survivorship
Property that is held in joint tenancy is owned by more than one party. If you own a home with another joint tenant, the surviving joint tenant would become the sole owner of the property.
This transfer would not be subject to probate, but the process would be looming after the death of the sole owner.
Transfers Through the Terms of a Living Trust
Living trusts are widely utilized for a number of reasons, and efficiency is one of them. The estate administration process is streamlined, because there is a consolidation of asset ownership.
If you establish a living trust, you can act as the trustee while you are alive, so you retain access to the assets. You can include spendthrift protections for the beneficiaries, and you control the nature of the distributions that they will receive, so you can spread them out over time.
Another advantage is the ability to account for possible incapacity. Many elders experience cognitive impairment late in their lives, and you can name a disability trustee to assume the role if it ever becomes necessary.
After your passing, the successor trustee that you name in the trust agreement would distribute assets to the beneficiaries in accordance with your wishes. These distributions would not be subject to probate.
Take Action Today!
We are here to help if you are ready to work with an attorney to put an estate plan in place. As you can see, there are a lot of things to think about, and we can explain your options so you can make informed choices.
You can set up an appointment at our Bluffton, SC estate planning office if you call us at 843-815-8580, and you can fill out our contact form if you would prefer to send us a message.
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