Probate is the legal process of estate administration, and it is necessary if you use a will to transfer personally held assets. If you do not have any estate planning documents at all, the probate court would preside over the estate administration process.
There are some exceptions to this rule in South Carolina. Property can be claimed with a simple affidavit if the overall value of the estate is $25,000 or less. We also have a simplified probate process for small estates.
If you draw up a will, you would name an executor in the document to act as the administrator, and the executor would admit the will to probate. During this process, creditors are notified, and they are given time to come forward seeking satisfaction while the estate is in probate.
There is a proving of the will, so if anyone wants to contest its validity, they can make a case before the court. Acceptable grounds include undue coercion, fraud, the incapacity of the testator, and improper execution.
The executor will identify and inventory the assets and prepare them for distribution to the heirs, and this will typically include appraisals and liquidations. When everything is in order to the court’s satisfaction, the estate will be closed, and the assets will be distributed to the heirs.
All the above may sound innocent enough, but there are some drawbacks. Probate will typically take at least eight months to run its course, and no inheritances are distributed during this interim.
The expenses that are incurred during probate reduce the value of the estate before it is transferred to the heirs, and probate records are available to the public, so there is a loss of privacy.
Some types of asset transfers are not subject to the probate process at all. Property held in joint tenancy is inherited by the surviving joint tenant, and the probate court is not involved.
A payable on death account is a bank or a brokerage account with a beneficiary. The beneficiary would have no access to the account while the primary account holder is living. After the death of the account holder, the assets would be transferred to the beneficiary outside of probate.
The probate court is not a factor when life insurance proceeds are being transferred, and distributions from inherited individual retirement accounts are not subject to probate.
Proactive Probate Avoidance
Probate serves a purpose, so it is not inherently negative. At the same time, the estate administration process is simply more efficient if you use a living trust as the centerpiece of your estate plan.
You would act as the trustee while you are living, so you would retain total control of the assets, and your heirs would be the beneficiaries of the trust. After your passing, the trustee would distribute the resources to the beneficiaries outside of probate.
This is just one of the advantages. You can include a spendthrift clause that will protect the principal from the beneficiary’s creditors. When you establish the trust, you can instruct the trustee to provide limited distributions over time to prevent reckless spending.
Many elders become incapacitated at some point, and with this in mind, you can name a disability trustee to assume the role in the event of your incapacity.
Schedule a Consultation Today!
There is no single estate plan that is right for everyone, and there are many tools in the estate planning toolkit. Personalized attention is the key to a properly constructed plan, and this is what you will receive when you choose our firm.
You can schedule a consultation at our Bluffton, SC estate planning office if you call us at 843-815-8580. There is also a contact form on this site you can use to send us a message, and if you reach out electronically, you will receive a prompt response.
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