Estate Planning FAQ
What is the difference between a last will and testament and a revocable living trust?
A last will and testament directs the distribution of your assets upon your death. However, the probate court oversees the administration of your estate and ensures that the terms of the will are complied with. If you have a revocable living trust, typically your assets are titled in the name of the trust and are not subject to estate administration, which in South Carolina takes between eight months and one year to complete. A revocable living trust allows the family of the decedent to avoid probate that is time-consuming and somewhat costly and comes at a time when the family is dealing with the loss of a loved one.
Why do I need a power of attorney?
A power of attorney enables an agent you appoint to handle your affairs if you become incapacitated or incompetent. A general durable power of attorney typically refers to a financial power of attorney and provides for agents to assist you in handling financial, legal and business matters. This type of power of attorney can become effective upon execution and filing or you can execute a springing power of attorney, which becomes effective only upon certification by two physicians that you are incapacitated. We often recommend a health care power of attorney, a document that appoints an agent to manage health care decisions if you are unable to make those decisions for yourself. The health care power of attorney, in addition to appointing a health care agent, allows you to express your wishes regarding organ donation, life-sustaining treatment and tube feeding. The document also grants your health care agent authority under the Health Insurance Portability and Accountability Act (HIPAA), the privacy law related to health care information.
What happens when someone dies without a last will?
In South Carolina, if you die without a last will and testament, your probate assets pass pursuant to our state statute of descent and distribution. Under what is referred to as our intestacy statute, a spouse would inherit a portion of the estate and the deceased’s child/children would inherit the remaining portion of the estate. In situations where the children are minors, this creates a challenge. Minor children are not able to transfer real property and other assets until they reach 18, which may limit the surviving parent’s ability to manage or sell the assets. This is a major reason why having a last will and testament or revocable living trust is critical.