FREQUENTLY ASKED QUESTIONS

What happens if I die without a Will?

This is what’s known as dying “Intestate.” It means your assets will be distributed according to a predetermined, rigid set of rules known as the South Carolina “Intestacy Statute.” If you haven’t planned correctly, dying intestate can create a huge mess and it takes away your rightful power to distribute your own assets the way you want to. For example, a lot of our clients believe that if they die without a will, their assets simply go to their spouse. This is not true in SC. If you have children, 50% of your assets go to your spouse and the other 50% go to your children. What if this is absolutely not what you would have wanted? Now your spouse, who just lost you, has to share ownership with your child. What if you’ve been estranged from your child? What if your spouse and your child don’t get along? What if the child has a drug or alcohol addiction? Even worse, what if there are several children? Any number of factors and scenarios would make this a completely undesirable situation. This is what makes a will such a powerful tool-it can prevent what could happen.

Who should I name as my Personal Representative?

We recommend naming a close, trusted family member or friend to serve as your PR, preferably someone who is very well-organized. While choosing the right person is most important, consider their location as well. This is simply a logistical question. Your PR will most likely have to make several trips to your home in order to adequately administer the estate over the course of a year until the estate is closed. Also, consider their availability, their health, and even their willingness to serve as your PR.

Can I name my bank or financial advisor as Personal Representative of my Will?

Probably. Most banks and financial advising firms will offer these services for a fee since, after all, they are experienced in handling client assets. Before naming either one as your PR, however, you must first check to see if they offer these services. They have no obligation to accept the appointment. If they do offer them, find out what their fees are. Most institutions set their own predetermined fees for PR appointments, which are usually based on the estate’s value. Very important: you must also find out if they require their own fee schedules to be incorporated into the will in order to serve as PR. If your current bank or financial advising firm doesn’t offer PR services, consider switching to one that does.

I signed a Will when I lived in another state. Should I update it now that I live in SC?

Well, it depends. If your out-of-state will was properly executed in that state (as in drafted by an attorney), it is likely fully valid here in SC and will be honored. If you would like us to review your out-of-state Will to make sure it is valid, we’d be happy to do that for a small fee. That said, we have found that people’s situations can and usually do change substantially over the course of even a few years. Relationships change, people move, they buy and sell homes, they acquire new assets, they have children or grandchildren, they have health problems. You name it. We want to help you create an estate plan that accurately reflects your current situation. That’s why we will usually recommend drafting a new Will.

Who keeps my original documents?

We are largely a paperless office. You will receive all of your original, ink-signed documents soon after signing them. We may need to record certain documents by mail, make copies, scan them, etc… before returning them to you, but this usually doesn’t take more than a couple of weeks. We will store electronic copies of your documents in our file management system. We would advise you to store your documents in a safe place like a fire-proof safe or even a safety deposit box.

What does the Probate process look like?

There are a lot of factors that determine how long, difficult, and expensive probate can be, but below are the minimum requirements that apply to everyone. (Whether the decedent had a will or died intestate, the process isn't substantially different.)

1. Deliver the will at death. Someone in possession of the deceased’s will must deliver it within 30 days to the judge of the probate court, or to the personal representative named in the will, who will then deliver it to the judge. A death certificate must also be filed with the court.

2. Personal representative is appointed. This person is typically named in the will and is officially appointed by the court.

3. Notice to intestate heirs is sent. Heirs can contest if they aren’t named or are treated differently.

4. Inventory and appraisement of the estate. This must be filed within 90 days of the opening of the estate. Professional appraisers may be needed to provide the values at the date of death for assets like homes, art, and jewelry.

5. Final accounting. This involves paying applicable taxes, outstanding debts, and ongoing expenses while settling the estate, such as legal and accounting fees. If there’s not enough money in the estate to pay all debts owed, creditors will be paid in order of priority according to South Carolina code.

6. Disbursements. If there’s money left over after debts and taxes are paid, distributions may finally be made to the heirs according to the will, or, if there is no will, according to the state.

7. Close the estate. The personal representative files a number of documents with the court after the above steps have been completed, and the estate is finally closed when the court issues a Certificate of Discharge.

Some factors that can affect how long this process takes and how expensive it is for the estate:

-How efficient the PR is 

-Whether the will is contested

-Whether lawsuits are filed

-How large and complex the estate is

-Whether professionals like probate attorneys and accountants need to be hired

Can I name my bank or financial advisor as Trustee of my Trust?

Probably. Most banks and financial advising firms have trust divisions that offer trust administration and management, including acting as fiduciary, agent, and trustee. Before naming either one as trustee, however, you must first check to see if they offer trustee services. They are not obligated to accept the appointment. If they do offer these services, ask what their fees are for such services. Most trust divisions set their own predetermined fees for trustee appointments. Very important: you must also find out if they require their own fee schedules to be incorporated into the trust document in order to serve as trustee. If your current bank doesn’t offer trustee services, consider switching to a local bank that does.

Who else can serve as Trustee of a Trust?

If you’re having some difficulty finding suitable family members, banks, or financial firms to serve as trustee, there are “trust companies” that exclusively offer trustee services. We must note that most of the larger national trust companies only cater to high net worth individuals. These include Bessemer, Northern Trust, Glenmede Trust, and Bank of New York Mellon, among others. Consider also the local firm of Colonial Trust. They are the only private trust company in the state of South Carolina and have four offices throughout the state, including downtown Charleston. (Not an endorsement of any of these companies)

Can I name your firm as my Agent, Personal Representative or Trustee?

We do not currently accept these kinds of appointments. We do this because such appointments usually require an open-ended, long-term commitment and we simply cannot guarantee that we will be available to serve in these capacities when the time comes. We might be retired by the time you need us!

How long does it take your firm to create a Trust?

Our agreements will state a 60-day guarantee, but in most cases we can have your trust in hand in about 30 days. This assumes your active participation in the process and getting information back to us in a timely manner.

Will your firm place all of my assets into the name of the Trust?

No. Our flat fee includes our firm placing your primary SC residence (if you own your home) and all of your personal property (household items) into the name of the trust upon the signing of your trust documents. You are responsible for subsequently "funding the trust" with any other assets you own. If your goal is to completely avoid probate, this is extremely important. Assets like vehicles, boats, bank accounts, non-retirement investments like stocks, bonds, ETFs, mutual funds, and any other potential "probate asset" must be re-titled in the name of the trust before you die in order to avoid probate. After the trust is created, we will provide you with some materials and guidance on how to re-title some of these items, but ultimately it is up to you to execute. If you do need further assistance with funding the trust, like contacting financial institutions, filling out and sending in paperwork, or any other tasks we may agree to help you do so for an additional, separate fee.

I have a mortgage on my home. Can I still place it in a Trust?

Absolutely. Nearly all mortgages contain a "due on sale" clause, which essentially states that if you transfer title to the home into someone else's name, the principal balance is "accelerated" and immediately becomes due in full. Enter the Garn-St. Germain Depository Institutions Act of 1982. This is a federal law that provides protection for homeowners from due on sale clauses in specific circumstances. One of those circumstances is a homeowner transferring their home into a living (inter-vivos) trust as long as the homeowner is a beneficiary of the trust. So rest assured, placing your home into a living trust will not change anything with regards to your mortgage, your lender, or monthly payment, but see below for how it might temporarily affect your property taxes.

Will placing my home into a Trust affect my property taxes?

Technically yes, but you can "undo" the temporary change without it affecting your actual bill. In order to re-title your home into the name of the trust, we will have you sign a new deed and then send it in to your county for recording. If you were paying a 4% tax rate with the Primary Residence Exemption, your county tax office will automatically revert it back to the higher 6% rate. It's not just for trusts; they do this automatically for any change to the title of a home. If you do nothing, your next tax bill will be at the higher 6% rate, which will be approximately three times higher than your previous year's tax bill. Obviously we want to avoid that happening. We recommend waiting just a few weeks after the deed is recorded and then calling your county tax office to see if you need to re-file the paperwork for the 4% Primary Residence Exemption. If you do, be sure to submit that back to them as quickly as possible so they have time to process it before your next tax bill is issued. Even if you were to get the paperwork in too late to change the bill, the county will refund you the excess.

Should I put my vehicles into my Trust?

Yes, we recommend that any asset that could be subject to probate, which includes vehicles, be placed into the name of the trust. We’ll be honest. When it comes to “funding” the trust, vehicles always seem to generate the most confusion for people, which is understandable. Dealing with the DMV is not often very fun and can be quite frustrating to say the least. Worry not, though, friend. We will guide you through the process and provide you with some materials that will help you accomplish this.

Should I put my bank accounts into my Trust?

Yes, we recommend that any asset that could be subject to probate, which includes bank accounts, be placed into the name of the trust. This includes checking accounts, savings accounts, money market accounts, and CDs.

Why do I need a "Pour-Over Will" if I have a Trust?

Even when a trust is in place, it's possible (likely, really) that you will keep acquiring assets until you die. If an asset is not properly placed in the name of the trust before you die, it becomes subject to probate. We always recommend having a Pour-Over Will as part of creating a trust because a Pour-Over Will directs that those assets at least be transferred back to the trust, to be distributed along with the rest of the trust assets according to the terms of the trust. Alternatively, if you only had a trust and no pour-over will, the probate court will distribute those probate assets under the state's intestate rules, which may not necessarily be the way you would have wanted. A Will is also the appropriate place to nominate a guardian for any minor children.

What’s the difference between a Last Will and a Pour-Over Will?

A Pour-Over Will is a type of Last Will & Testament, so the documents look similar, but have some key differences in language and purpose. A typical Last Will is meant to serve as the last word for your wishes regarding the disposition of your assets. A Pour-Over Will is a Last Will, but its purpose is to work in tandem with a Living Trust. The trust is ultimately meant to be the last word regarding your assets and how they are distributed. A Pour-Over Will simply takes any assets that did not make it into the trust before your death, and directs them back into the trust. This fulfills the original intent of relying on the trust to dispose of your assets. Ideally, however, we want all of your assets that could be subject to probate to be in the name of the trust before you die so most of the Pour-Over Will isn't even necessary.

Will a Trust really avoid Probate entirely?

You will only avoid probate entirely if you have no probate assets when you die. Probate assets are those not placed into the name of the trust. Because you will most likely keep acquiring assets after you create a trust, sometimes assets that require a legal designation of ownership (like a vehicle) can slip through the cracks and become a probate asset (in your individual name) instead of a trust asset. Those assets would then have to be probated. This is why it is so important to stay up to date with your trust and remember to transfer as many assets as you can to your trust before you die if you want to truly avoid probate completely. A Pour-Over Will, which is included with our trusts, helps "catch" any non-probate assets and directs them back to the trust, but does not in itself avoid probate. Our firm will help guide you with properly funding your trust so your family actually does avoid probate.

How do life insurance policies and retirement accounts factor into a Trust?

Because life insurance policies already avoid probate, the only question is whether to name the trust as a beneficiary of the policy, versus naming only individuals like a spouse or children. The answer will depend on your particular situation as there are several things to consider. With retirement accounts, we never recommend attempting to retitle the accounts into the name of a revocable living trust as there may be serious tax implications. There is a very good chance the IRS would consider this a 100% withdrawal; thus, it would be taxable on your next income tax returns, which defeats the main purpose of such tax-deferred accounts. In addition, you may also be subject to the 10% early withdrawal penalty if you have not yet reached age 59 ½. However, just like insurance policies, you can name a trust as a beneficiary and whether to do so will depend on your situation. We can help you decide how to use beneficiary designations to coordinate with your overall estate plan and goals.

What does the term "Durable" mean when talking about a Power of Attorney?

The word "durable" simply means that your agent's powers continue even if you, the principal, become incapacitated. In estate planning, most people explicitly want their Power of Attorney to be durable so their agent can handle their financial affairs if they have some type of medical event that renders them unconscious and unable to act on their own. Even when acting while the principal is incapacitated, the agent owes the principal a fiduciary duty, which means they must act in the principal's best interest.

Should I give copies of my medical directives to my doctors?

Absolutely. You should give copies of both your Living Will and Health Care Power of Attorney to your primary care physician and any other medical professionals you regularly see so they can add them to your file. We also recommend having a Docubank membership which comes with a wallet card that directs health care professionals to a 24/7, online depository of all of your important medical directives. Both the Will Package and the Estate Planning Package come with a complimentary 1-year membership to DocuBank. Also, if you have already been diagnosed with a serious illness, please ask your doctor about filling out a DNR (Do not Resuscitate) order and/or POST (South Carolina Physician Orders for Scope of Treatment) order.

Does your firm offer Probate Administration?

We do not currently offer probate administration services. This includes any type of probate litigation and estate administration.

Does your firm offer Tax Preparation?

We do not.

Basic Estate Planning Terms:

  • Intestacy or Dying Intestate - when a person dies with no will, no trust, and no plan. The South Carolina state laws take control and determine how the person's property passes to others.

  • Decedent - the person who has passed

  • Estate - the sum whole of a person's assets, debts, and other property or interests which they own or control and which must be dealt with or distributed at death

  • Probate - the process in South Carolina Probate Court by which assets and debts are handled and distributed after death

  • Personal Representative - the person who is appointed to handle the matters of probate

  • Incapacitated person - someone who is unable to manage their own affairs due to some impediment

  • Guardian - (in probate context) is someone who appointed to handle the healthcare decisions of an incapacitated person

  • Conservator - someone appointed to handle financial decisions of an incapacitated person

  • Bond - is an 'insurance premium' the Personal Representative needs to pay to ensure trustworthiness and skill to represent the estate

  • Will -identifies who will be your personal representative, who will receive your assets, nominate guardian for minors, express wishes for burial and cremation

  • Health Care Directives – documents which allow others to act and make decisions on behalf of someone for health care purposes

  • Power of Attorney – typically a document which allows another person (agent) to handle financial matters on someone’s behalf (principal)

  • Escheatment – when property is not properly disposed of in an estate or plan, goes unclaimed and transferred to the State of South Carolina after a period of time

  • Grantor – someone who creates and places assets within a trust

  • Trustee – person who manages the trust and holds title to assets

  • Beneficiary – recipient of the assets of a trust

  • Successors - persons or entities, other than creditors, who may be entitled to receive property from a decedent

Contact the Carr Law Firm, LLC

If you would like a free consultation, please contact us or call (843) 619-2222.

Summerville*:
201 Sigma Drive
Suite 300
Summerville, SC 29486
Mt. Pleasant**:
1156 Bowman Road
Suite 200
Mt. Pleasant, SC 29464
North Charleston**:
6650 Rivers Avenue
North Charleston, SC 29406

*Principal office **By appointment

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