Information on Living Trusts in South Carolina
South Carolina residents have a number of different tools available to help with estate planning, including wills and living trusts. A will is primarily used to distribute your property after your death while a living trust is used to manage your assets during your lifetime. Title 62 of the S.C. Code of Laws specifies the guidelines for who may establish a living trust and how trusts may be used.
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Establishing a Trust
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Under South Carolina law, a living trust may be created by any adult 18 years of age or older who is of sound mind and free of undue influence. South Carolina law recognizes the creation of an oral trust. However, it is recommended that you establish your trust through a written declaration. In your living trust you must identify yourself as the property owner. You must also identify the trustee responsible for managing the trust and at least one beneficiary. State law prohibits anyone from serving as trustee who is the sole beneficiary of the estate unless one or more additional trustees is also appointed. Once the trust is created, you must legally transfer ownership of your property to the trust. Transferable property includes real estate holdings in South Carolina or other states, bank accounts, stocks, bonds, life insurance policies or other financial instruments.
Living Trust and Probate
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Probate refers to the process by which the state inventories the contents of your estate and distributes your assets to beneficiaries following your death. The length of the probate process varies based on whether you have a will. The primary drawback of probate is that it can last months or even years and be costly for your family members. The advantage of a living trust is that any property included in the trust does not have to go through probate. This means that your beneficiaries receive their inheritance in a much shorter time frame with less cost to the estate.
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Incapacitation
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A living trust can also offer you financial security in the event you become incapacitated. Typically, if you become unable to manage your affairs, the South Carolina probate court will hold a hearing to appoint a conservator to your estate who will assume full responsibility for managing your finances. Unless you have previously specified someone to act as your representative, you do not have a say in who becomes conservator. With a living trust, the trust assumes full responsibility for managing your financial affairs should you become temporarily or permanently incapacitated. The trustee also has the power to make decisions regarding your long-term care.
Considerations
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A living trust offers many benefits but it is not without its limitations. If you owe money to creditors, a living trust does not protect your assets from a civil lawsuit. A living trust also cannot be used to disinherit a surviving spouse, although you may exclude any or all of your children. Establishing a living trust also does not guarantee that you will be able to reduce or eliminate any federal or state estate or inheritance taxes.
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References
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