Probate is the legal process by which an estate is settled. Literally speaking, Probate means to “prove” a Will is valid after someone passes away. That means making sure the inheritance goes to the right heirs and that all of the deceased’s wishes are carried out. Not all Wills are legally sound, so all Wills must be proven in Probate court in South Carolina. In addition, the Probate process includes:
- Identifying and inventorying the deceased person’s property
- Having the property appraised
- Paying debts and taxes
- Distributing the remaining property as the Will (or state law, if there’s no Will) directs.
Here’s the good news: It is possible to plan an estate so that all of the assets avoid Probate, and that’s generally through a Trust. Later in the blog, we’ll map additional options to help you avoid Probate.
In situations where Probate is necessary, it can occur with or without a Will. If there is a Will, a personal representative (or executor) has already been nominated to be the legal administrator of the estate during Probate. Even if the decedent died without a Will (intestate), a family member or friend can petition the court to appoint a personal representative who must follow state laws regarding intestacy. State law, rather than the deceased’s wishes, will determine how the estate can be distributed. Now that you understand a little bit about Probate in general, let’s learn more about the Probate process in Charleston.
Probate in Charleston
- The Probate court has complete jurisdiction over all matters pertaining to the estate, including protection of minors and incapacitated adults, Trusts, and survival action settlements of wrongful death lawsuits
- On average, the entire process can take eight months to a year and a half
- Easily 10% of your assets can be lost due to commissions, attorney fees and Probate fees
- The Probate court appoints the personal representative
- The personal representative administers the estate under the court’s supervision
- Presiding judge is not required to hold a law degree, or any type of degree
- Property is identified, inventoried, and appraised
- Debts are paid off
- Remaining assets are distributed according to the Will or South Carolina law
The Duties of the Personal Representative
Once the personal representative has been officially appointed by South Carolina Probate court, he or she has a number of duties to fulfill, including to:
- Open an estate checking account to receive funds and pay taxes
- Have assets appraised by professionals
- Take an inventory of all of the estate’s assets for the court
- Decide which assets should be conserved and which should be sold
- Evaluate creditor claims and pay all legitimate ones from estate monies
- Notify Social Security, banks, brokers, utility, credit card companies, etc. of the death
- File taxes, both final income tax returns and death tax returns, on a timely basis
- Distribute assets to designated beneficiaries as stipulated in the Will
- Prepare accounting for the court of income, sale of assets, debt payments, etc.
Avoiding Probate
There are a few ways to avoid Probate. In many cases the overall best option is to create a Revocable Living Trust. A Revocable Living Trust is a legal document that is created during your lifetime and determines how your property will be distributed upon your death. A Revocable Living Trust allows you to modify or cancel terms at any time. The secret is that assets of value you have will be placed within the Trust so that the Trustee becomes the owner of those assets instead of you. In the event of your death or incapacity, the Trustee can then transfer the assets directly to any beneficiaries you have designated. Because these assets are no longer under your ownership (rather the Trust’s ownership), they do not need to go through Probate.
Transfer-Upon-Death Accounts
One of the easiest ways to protect certain assets is by converting them to what are known as transfer (or payable) upon-death accounts. This is an effective option to use for estates that are primarily comprised of financial accounts. A transfer-upon-death account works by appointing a beneficiary to be the designated recipient of the funds held within an account in the event of the account owner’s death.
Joint Ownership
Joint ownership is another estate planning tool that can be implemented to bypass Probate. Joint ownership refers to the ownership of a property by two or more people as indicated by a proper title. Should one owner of a property pass away, the property automatically goes to the other owner. In order for joint ownership to avoid Probate, you must ensure the property title includes both owners. The most common forms of joint ownership include:
- Joint tenancy with right of survivorship
- Tenancy by the entirety
- Community property with right of survivorship
Gifts
Another method to avoid Probate is through gifting. Giving some of your property and assets to a family member, loved one or organization means that those gifts are removed from your estate and subsequently do not have to be submitted to Probate as they no longer belong to you. Also, gifting assets of significant value lowers the cost of Probate. Assets with high monetary value can raise Probate expenses as well as overall estate taxes. Making a gift of these valuable assets can relieve some of these costs. The annual gift tax exclusion amount is currently set at $15,000. This means that you can gift up to $15,000 a year per person without being required to file a gift tax return.
Contrary to popular belief, just because you have a Will doesn’t mean you’ll avoid Probate. Instead, Wills are forced into Probate in South Carolina, it’s unavoidable. Avoiding Probate isn’t as difficult as it may seem — it simply requires knowing a few estate planning secrets we can help you with at Wiles Law.
How We Can Help
If you do find yourself in the midst of Probate, we can help! One of our major practice areas at Wiles Law is Probate Administration and we can represent you during this process. Our team is well-versed in family Probate Administration and can advocate for your loved one’s estate from reading of the Will, to transfer of assets, to closing of the estate. We intimately understand South Carolina law and will protect the estate on your behalf and represent you through court proceedings. It is essential to have an experienced family Probate lawyer on your side during this time as state law, rather than the deceased’s wishes, can determine how the estate will be distributed. If you are seeking any Probate advice, please don’t hesitate to give us a call. One of our experienced Probate Attorneys can help you navigate the complexities of the process, and put your mind at ease.