The simple will is the most commonly used estate planning document, but a lot of people that use them overlook better options. In this post, we will provide an overview so you can make informed decisions when you are planning your estate.
Asset Transfers and Guardian Designation
The simple will essentially serves two different functions. You use the document to state your final wishes with regard to the distribution of your assets after you are gone. If you are the parent of a dependent child, you can designate a guardian to care for the child if it becomes necessary.
From a legal perspective, any competent adult can create a simple will. In South Carolina, you must sign or acknowledge the will in front of two witnesses, and the witnesses must sign the document.
A will does not necessarily have to be notarized, but there is a reason why this can be a good idea, and we will explain in the next section.
A Will Is Subject to Probate
If you create a will, you name an executor in the document that will act as the estate administrator after your passing. The executor would admit the will to probate, and the court would provide supervision during the administration process.
There is a proving of the will during probate, and the court will contact the witnesses that were present when the will was signed by the testator. If the document has been notarized, this step can be skipped, and this streamlines the process.
The executor is required to publish a notice to creditors in a local newspaper, and they are given time to come forward. An Employee Identification Number (IEN) will be obtained from the IRS for tax purposes, and the executor will establish an estate bank account.
Assets that comprise the estate will be secured and identified, and they will be inventoried and prepared for distribution to the heirs to the estate. When everything is in order, the court will close the estate, and the executor will distribute inheritances to the heirs.
Wills Can Be Challenged
If someone feels as though an invalid will has been presented to the court, they can present a challenge if they have acceptable grounds. The four grounds for a will challenge are undue coercion, improper execution, fraud, and the incapacity of the grantor.
There Is an Ideal Alternative to a Simple Will
The last thing we want to point out is the fact that a living trust is an alternative that is far more effective, and the first benefit is probate avoidance.
Probate will typically take eight or nine months at minimum, and no inheritances can be distributed while the estate is being probated by the court. There are expenses that reduce the value of the estate before it is passed along to the heirs, and the records are available to the public.
If you use a living trust instead of a simple will as the foundation of your estate plan, the trustee would be able to distribute assets to the beneficiaries outside of probate.
Unless you include a testamentary trust, the people named in a will receive lump sum inheritances all at once, and there are no controls going forward. This can be a source of concern if you are uncertain about the way the inheritors would handle a windfall.
On the other hand, if you utilize a living trust, you can include a spendthrift clause to provide safeguards. The trust would become irrevocable after your passing, and the beneficiaries would not be able to directly access the principal. Their creditors would be in the same position.
You would control the nature of the distributions, so you could instruct the trustee to distribute a certain amount each month, or you could dictate some other arrangement. In this manner, you can make sure that the beneficiaries do not burn through their inheritances too quickly.
We Are Here to Help!
Today is the day for action if you are going through life without an estate plan. We can gain an understanding of your objectives and help you create a tailor-made plan that is ideal for you and your family.
You can set up a consultation 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 like to send us a message.
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