How Can I Avoid Inheritance Tax in South Carolina?

Having a loved one pass away is an extremely emotional and overwhelming time in a person’s life. On top of that, having to navigate the division of assets or any inheritances left behind can make things even tougher. Between dividing assets, handling finances, and closing an estate, you may find yourself worried about additional debts and asking questions like, “How can I avoid inheritance tax in South Carolina?”

Luckily, as of 2025, South Carolina doesn’t enforce a state inheritance tax. In fact, only five states currently impose an inheritance tax. However, this doesn’t necessarily mean that the process of inheriting South Carolina assets is free from all taxes. Depending on the size of the estate and where the decedent lived, federal taxes or taxes from another state could still apply to your case.

Understanding how these different taxes work and how they may apply to you can help you navigate this difficult process more effectively and efficiently. Having an experienced Chester estate planning attorney on your side can lessen the stress of your loved one’s death, and the team at Mack & Mack Attorneys is prepared to guide you through the process.

Understanding Probate in South Carolina

Between 2023 and 2024, Chester County saw around 5,535 estate caseloads, many of which came with inheritances. It’s important to understand what probate is and how it affects the inheritance you may receive. Probate is the legal process of validating a deceased person’s will or estate plan, settling debts, paying taxes, and distributing any assets to heirs. Probate helps ensure that all obligations, debts, and taxes are handled properly before any inheritance is given out.

The term “estate” refers to all assets and/or debts that a person leaves behind when they pass in South Carolina. This includes any real estate, bank accounts, retirement accounts, investments, personal property, and outstanding debts. Whether an estate is subject to federal estate tax or probate depends on its total size and value.

What Is the Difference Between Inheritance Tax and Estate Tax in South Carolina?

Inheritance taxes and estate taxes are often confused with each other, but they are two distinct legal terms. An inheritance tax is a tax that an individual receiving an inheritance must pay. An estate tax is a tax that must be paid by the entire estate before any assets are given to beneficiaries.

Fortunately, South Carolina doesn’t impose either of these kinds of taxes. Since 2005, when the state decoupled from the federal estate tax system, both estate and inheritance taxes have been dissolved. However, depending on the size of the estate or in certain cases, federal estate taxes may still apply to your case, making it crucial that you consult with an attorney.

When Do Federal Estate Taxes Apply to Your South Carolina Inheritance?

As of 2025, the federal estate tax exemption is $13.99 million. This means that if the total monetary value of the deceased person’s estate falls below this amount, no federal estate taxes are owed in South Carolina. If the estate exceeds this amount, then federal estate taxes will be applied.

Certain types of deductions can reduce the taxes owed by the estate. For example, a marital deduction allows spouses to inherit an unlimited amount from each other without incurring any estate taxes. However, individuals with high-value estates, family businesses, or real estate portfolios should carefully plan their estates to ensure their assets are protected.

The Importance of Estate Planning Before You Pass

Estate planning is one of the smartest ways to make sure your assets and loved ones are protected after you pass. Without a valid estate plan, your assets could be distributed according to state law and not according to your own personal wishes, plus taxes could be applied.

A well-crafted estate plan can:

• Ensure that your property is passed on to your chosen heirs.
• Minimize or eliminate potential federal estate taxes.
• Help avoid probate or streamline the process, making it easier on your loved ones.
• Designate guardians for minor children.

There are a few more ways to help reduce or eliminate taxes on your assets after you pass. In 2023, the median property value in Chester County was $143,800. Even if you think your estate is minimal, creating a plan now can help avoid any confusion or legal costs later on. Setting up an irrevocable or charitable trust can help reduce taxes on your estate. The IRS also allows you to gift up to $18,000 per recipient per year without tax consequences.

FAQs

Q: How Much Can You Inherit in South Carolina Without Paying Taxes?

A: You can inherit any amount of assets in South Carolina without owing any state inheritance or estate taxes. The state does not impose estate taxes as of 2025. However, federal estate taxes may still apply to larger estates, particularly those exceeding $13.99 million. If you’re unsure of the total value of your loved one’s estate, or if they lived out of state, it’s crucial to consult with an attorney to determine your potential tax obligations and next steps.

Q: Can You Avoid Inheritance Tax in South Carolina?

A: Since South Carolina does not impose an inheritance tax, there’s nothing to avoid at the state level. To reduce or avoid federal estate taxes, individuals may consider trusts, lifetime gifting, and charitable donations as part of their estate plan. Working with a Chester estate planning attorney at Mack & Mack Attorneys is the most effective way to explore these options.

Q: Can a South Carolina Estate Planning Lawyer Help You With an Inheritance?

A: Yes, an experienced South Carolina estate planning lawyer can help you with a variety of estate-related issues, including receiving an inheritance. While you do not legally need to hire a lawyer when you receive assets or an inheritance when someone passes, working with a skilled lawyer can help to ensure you receive what you’re owed efficiently and that your assets are protected.

Q: How Does Probate Affect My Inheritance in South Carolina?

A: Probate is a legal process used in every state where the government verifies the estate plan that was left by the deceased. During this process, all estate plans are read, all debts are paid off, and all estate-related issues are addressed before assets can be distributed. Once the estate has been addressed in probate, inheritances can then be passed to beneficiaries.

South Carolina Estate Planning Attorneys Who Care

If you’ve recently inherited assets or want to plan your estate to minimize tax burdens for your heirs, the team at Mack & Mack Attorneys is prepared to help. Serving Chester County and surrounding South Carolina areas, our legal team provides experienced, personalized guidance and superior legal aid. Schedule a consultation today to learn more about estate planning and inheritances in South Carolina.