A South Carolina living trust can be an important part of your estate planning. A revocable living trust (also known as an inter vivos trust) allows you to use and control your assets during life and control their disposition after death.
Living trusts in South Carolina
When you establish a living trust in South Carolina you are the trust grantor. The trust is set up to manage your assets for your benefit during your life. To get the most out of your trust, you will want to place as many assets as possible into it. Some assets will not qualify, such as retirement accounts and life insurance. A trust must have a trustee, a person who manages and protects the assets in the trust. You can choose anyone to be your trustee, but most people prefer to choose themselves. If you choose yourself, you also need to select a successor trustee who will take over when you die. The successor will continue to manage the trust and will distribute the assets to your beneficiaries according to the terms you include in the trust. Your revocable trust can be changed at any time you wish and can even be eliminated. An irrevocable trust is different and cannot be altered at all.
One of the benefits of a living trust South Carolina is that it keeps the assets in the trust out of probate. Probate is a court proceeding used to verify and carry out a will. Probate can take months and involves costs: an attorney, executor, and court fees. Assets in a will cannot be disbursed until probate concludes, whereas assets in a trust can be distributed immediately upon death if you wish. A trust allows you to bypass probate in any state where you own property as long as you include the asset in your trust.
South Carolina has adopted the Uniform Probate Code, so its procedures are more simplified than many states. There is also a small estate proceeding available for estates valued under $25,000 with no real estate. This approach is less expensive than probate or creating a trust.
Do I need a living trust in South Carolina?
Living trusts are not for everyone, but the benefits may work for you. An important aspect of creating a living trust in South Carolina is the control is offers you. Although your assets are technically held in the name of the trust, you have total access to them during your lifetime. You live in your home, drive your car, use your money, and do anything you want without any oversight or interference. After your death, the assets remain protected in the trust until the dates you have selected for disbursement. Many people choose to pass trust assets when beneficiaries reach specific ages.
Your living trust also keeps your family business private. While a will must become public record when it is probated, a trust need not enter the public record. The names of your beneficiaries, information about your assets, and your trust terms are not revealed to anyone. Additionally, a trust is much harder to contest than a will, ensuring that your wishes are carried out.
Your revocable living trust protects you should you become mentally incapacitated. All of your assets are already controlled, owned, and managed by the trust, and a conservatorship proceeding is likely unnecessary. While a durable power of attorney can be rejected, a trust cannot be. Your financial life is protected by the trust.
Living trusts and estate taxes in South Carolina
Although South Carolina has no estate tax, the federal estate tax is applied to estates exceeding $5 million. A living trust does not protect your assets from this tax. There is a special type of trust known as a QTIP, marital, or AB trust that does divert assets from estate tax. This type of trust passes assets from a deceased spouse to a surviving spouse without incurring tax. A revocable living trust does not shield assets from Medicaid or creditors.
How to create a living trust in south Carolina
Creating a living trust in South Carolina involves creating a written trust document and signing it in front of a notary. The trust is not final until you transfer assets into it. A living trust might offer benefits that are valuable for you. Compare it with other estate planning options before deciding.
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