South Carolina is one of 38 states that does not levy an estate or inheritance tax on beneficiaries after a loved one has passed away. However, the state does have its own inheritance laws that govern which beneficiaries will receive portions of an estate after a loved one dies. It is important that everyone understands the state’s intestate and testate laws, and how they apply to any inheritance a loved one has left behind.
Consulting an experienced estate planning attorney can bring you peace of mind knowing your wishes will be honored after the passing of yourself or a loved one. Beth Santilli Law has vast experience crafting secure, detailed trusts, wills and more for South Carolina residents.
Inheritance Tax & Estate Tax
Many people confuse an inheritance tax for an estate tax, but there are differences between the two. An estate tax is placed on the estate of the deceased immediately after they pass. Inheritance taxes, on the other hand, are imposed on the beneficiaries of the deceased after they have received an inheritance. Like estate taxes and inheritance taxes, South Carolina also does not have a gift tax. Still, individuals who are gifted more than $15,000 in one calendar year are subject to the federal gift tax.
Individuals should also know about the federal estate tax. If an estate is valued over a certain amount ($11.58 million in 2020), the estate is subject to an estate tax. Contrary to what many people think, federal estate taxes do not apply to the total value of the estate, but only the value that exceeds the maximum federal limits. However, the rate of these taxes is high and can sometimes reach 40 percent.
Dying Testate vs. Dying Intestate in South Carolina
It is always beneficial to loved ones when a person has a will when they pass away. This is known as dying testate. A valid will gives a person the utmost control over their estate, how it is distributed, and the beneficiaries that receive a portion of the estate. When a person dies and they do not have a valid will in place, it is known as dying intestate. Dying intestate removes control from the deceased, and instead, the estate is subject to the inheritance laws of South Carolina.
A common misconception is that when a person dies without a valid will in place, their estate does not have to go through probate. Unfortunately, this is not true. Typically, an estate can only minimize the probate process when it is valued at less than $25,000 in South Carolina. According to the Uniform Probate Code, there are many different ways an estate can pass through probate, such as informal or formal probate. However, there are some estate planning documents that can help a person’s beneficiaries avoid probate, such as trusts.
Spousal Inheritance Laws in South Carolina
Even when a person dies with a valid will in place, it is very difficult to disinherit a spouse in South Carolina. This remains true even when a person’s will was created prior to the marriage, or while they were married. A surviving spouse is entitled to the elective share, or one-third of the decedent’s estate by law. Of course, a spouse can leave more than the elective share as the elective share is only a minimum. The elective share can be waived through a valid pre-nuptial agreement. If a person dies intestate and has a surviving spouse but no children, the spouse will receive the entire estate. When a person does have a surviving spouse and children and they die intestate, the spouse will receive half of the estate and the children will receive the other half.
Inheritance Laws for Children in South Carolina
When a person dies intestate and has both a surviving spouse and children, the children receive half of the estate collectively. The half of the estate that goes to the children is then divided among them, depending on how many children the deceased had. Only children who have been legally recognized are entitled to a portion of a deceased’s estate. A child must have been legally adopted, born during the marriage, or born before the marriage with paternity already established. In the event that the deceased had a child but the child died before the decedent, grandchildren are also eligible to receive a portion of the estate.
Inheritance Laws for Unmarried Individuals in South Carolina
Intestate laws also apply to individuals who are unmarried and do not have children, or who are unmarried and do have children. If the decedent did have children, those children will receive the entire estate and each will receive an equal share. If the decedent was unmarried and did not have any children, the estate is passed on to their parents, if the parents are still living.
When a person does not have a surviving spouse, children, or parents, the siblings will then inherit the estate. If a person does not have any surviving siblings, the estate is distributed among the person’s closest living relatives. These individuals can include grandparents, the children of grandparents, great-grandparents, or the children of great-grandparents.
Sometimes, a person passes away without any surviving loved ones. In this case, the estate becomes the property of the state of South Carolina.
It is important to note that these inheritance laws only apply to individuals who die without a will. When a person has a will, it supersedes the intestate succession laws of the state.
Get Legal Help Today
Inheritance laws in South Carolina are complex. At Beth Santilli Law, LLC, estate planning attorneys can explain how they apply to your case. Contact us today to schedule a consultation so we can provide the sound legal advice you need at this difficult time.