Many estate plans, such as those that include only a will, must go through the probate court. The process is long, expensive, and always has the potential to become complicated. Fortunately, South Carolina law offers many ways for people to avoid probate. Here’s what you need to know.
Navigating the South Carolina probate system comes with its own challenges, but an experienced probate lawyer can help. Contact Beth Santilli Law today to request a consultation.
What is Probate?
Probate is a legal process in which a probate court oversees the distribution of a person’s assets upon their death. The court will first appoint an executor that is responsible for ensuring the deceased’s debts are paid and that remaining assets are distributed to beneficiaries. Probate incurs many fees and can take over a year, which is why many people wish to eliminate the hassle for their loved ones. Individuals creating an estate plan have many options when they want their loved ones to avoid probate.
Living Trusts
A living trust is a legal document in which a person can place assets to protect them from probate. Any asset can be placed into a living trust, such as real estate, vehicles, bank accounts, and more. When creating a trust, the trustee must transfer ownership of the assets to themselves within the trust and they must name a successor trustee. Upon their death, the assets are transferred to the successor trustee, who then distributes it to the beneficiaries of the trust. Probate proceedings are not necessary for distribution to occur.
Joint Ownership
It is not uncommon for two people, such as a married couple, to jointly own assets together. When this is the case, South Carolina recognizes the right of survivorship that can help family members avoid probate upon someone’s death. Under the right of survivorship, when assets are jointly owned and one of the owners passes away, the property is automatically transferred to the other owner. This is known as joint tenancy. The property does not have to pass through probate first. However, a form of joint ownership must be completed to verify that the surviving individual is an owner.
The South Carolina statutes are quite clear on the language that is to be included on the deed when the property is real estate. The deed should clearly state that the owners are recognized “as joint tenants with the right of survivorship,” and not as “tenants in common.” This can help avoid confusion, and the probate process, in the event that one of the owners passes away. Regardless of the type of property that is protected under joint tenancy, each owner must have legal claim to an equal share.
Bank Accounts and Payable-on-Death Designations
Individuals can also protect bank accounts from probate in some instances. A bank account may have a “payable-on-death” designation to protect funds and certificates of deposits. The individual that owns the bank account can control it during their lifetime and can even spend or withdraw all of the money in the account. The beneficiary that is named on the designation does not have any control of the account until the owner passes away. At that time, the beneficiary can then ask the bank to provide them access to the account without the need to go through probate.
Securities Transfers
Just as bank accounts can be transferred to another person upon someone’s death, so too can securities such as stocks and bonds. Transfer-on-death forms are quite common when someone registers stocks and bonds. When securities are registered as transfer-on-death, the beneficiary named on the form will inherit the investment automatically upon the shareholder’s death without the need for probate.
Just as beneficiaries deal directly with the bank when there is a payable-on-death designation, a beneficiary of stocks and bonds will claim the investment directly from the brokerage company. The brokerage company must then immediately transfer the account.
Small Estate Affidavits
Small estates minimize probate with some estates able to be closed in thirty (30) days. To do this, the assets held within an estate after liens and encumbrances are applied must be valued at $25,000 or less. To minimize probate in this manner, the beneficiary must sign an affidavit under oath. The beneficiary must sign the affidavit in the county probate court where the deceased individual was a resident. A probate judge must also approve the affidavit and a waiting period of 30 days will apply. When these requirements are met, the asset is then released by the institution or person that currently holds the asset.
Options Not Available to Avoid Probate in South Carolina
Although South Carolina provides many options for individuals who want to avoid probate, there are some limitations. For instance, some states allow transfer-on-death deeds and registration for certain types of property, but South Carolina does not.
South Carolina does not recognize transfer-on-death deeds for real estate property. For a beneficiary to receive real estate property upon a person’s death, they must have jointly owned the property under the state’s joint tenancy laws. South Carolina also does not recognize transfer-on-death of registration of vehicles. To avoid probate on vehicles, a person could create a living trust and place the vehicle in the trust if they want their loved ones to avoid probate upon their death.
Get Legal Planning Your Estate
While the law in South Carolina outlines many ways in which you can avoid probate, it is not always easy for individuals to know which method is right for them. At Beth Santilli Law, LLC, our experienced estate planning lawyers can advise on your case, ensure your estate is protected, and help your loved ones avoid the probate process. Contact us today to schedule a consultation.