Estate Planning – At A Glance

Charleston Estate PlanningOur Charleston estate planning attorneys are frequently asked, “What is estate planning.”  South Carolina estate planning is more than just having a simple will. Broadly defined, “estate planning” is the process of planning for the accumulation, conservation, and ultimate distribution of a persons estate.

The most popular definition of estate planning is the process of planning for the life-changing events of disability and death. This perspective also includes an emphasis towards estate tax reduction and probate avoidance. While this is a foundational perspective, our Charleston estate planning attorneys believe clients should also be mindful the broader goals and purpose of estate planning.

Regardless of an individuals or family’s income level, estate planning is as important as holding health or life insurance.  Estate planning may seem like an overwhelming and unnecessary undertaking for those with modest income and assets, but it does not need to be.

Goals of estate planning include, but are not limited to:

  • gauging whether lifetime goals are being pursued in the most direct and balanced way;
  • identifying opportunities to enhance and leverage personal and family situations;
  • providing an opportunity to create safeguards for the protection and preservation of assets;
  • identifying difficult areas or issues and providing opportunities to cure and resolve them now (rather than placing the burden on someone else later);
  • assuring family members that the appropriate mechanisms are in place for their future security; and
  • providing an orderly and fair means of managing and distributing property in case of disability or death.
Estate planning, in the long run, costs little or next to nothing, and amounts to a present investment to provide current and future accumulation and conservation of assets through maximizing opportunities and lowering risk exposure, estate planning costs, and unnecessary taxes.  Estate planning yields benefits for family and loved ones in the short-term and substantial long-term advantages when tragic life-altering events do strike.  In general, estate planning extends a persons intentions, values, patterns, and priorities to future circumstances in which he or she will not be able to actively participate. It produces a plan that will strengthen and preserve financial security and order for family and loved ones.

The Importance of Estate Planning

The primary motivation for many of our clients is the protection of their loved ones. Everyone understands that it is possible that a tragic life-changing event could happen at any time, such as illness, incapacity or even death. These tragedies are rarely predictable, but they are almost always inevitable. Many times these life-altering tragedies can bring about distress, chaos, anxiety and confusion among family members — not to mention the added burden of legal fees and involvement. Without a proper estate plan, these life-changing events may fall under the discretion of court-appointed government official rather than under the care and consideration of a loved one. A poorly constructed or hastily devised estate plan might also incur unnecessary administrative fees, frivolous court costs, unnecessary attorney and accounting fees and avoidable taxes. Additionally, clients with a properly developed estate plan will have ensured their minor children are cared for by those who are best suited to provide the best home rather than letting a judge decide.

The South Carolina state legislature has established policies and procedures for estate administration in the event that an individual experiences physical or mental incapacity and becomes otherwise incapable of carrying typical estate duties. These statewide plans though rarely work for the benefit of a client. In many cases, the lack of an estate plan and the obligation to follow these state procedures can result in a costly and unpleasant process for a client and their family.

The most important lesson in any of these events is that clients should always be proactive when establishing an estate plan. Corrective or retroactive estate plans are an uncommon and difficult ordeal, which is why it is important to consider events such as inheritance, incapacity, asset protection, trust administration, guardianship or business succession ahead of time. Our attorneys offer guidance and legal expertise for the entirety of the planning process so that clients can focus on understanding, communicating and protecting their interests.

Our Charleston estate planning attorneys provide legal counsel to individuals, families and businesses to facilitate inheritance processes, to encourage estate tax savings, to promote asset protection, and to establish legal protections for client objectives.

Estate Planning for Small Estates

Some people believe they don’t need to concern themselves about “estate planning” because their estate does not have great value, but estate planning actually has much less to do with estate size than one would assume. Estate planning focuses on the value of people, relationships, special concerns, and efficient and effective administration. The size of an estate is actually secondary to most estate planning issues.

When considering the value of an estate, it is important to include privately owned life insurance, employer-provided life insurance, travelers life insurance, double indemnity-type life insurance, other accidental death life insurance, workers’ compensation coverage, personal injury claims, wrongful death claims, other employer-provided benefits, mortgage insurance, and other resources to which a persons estate, family or loved ones might become entitled by reason of death. The value of these “side items” adds up fast.

Essential Estate Planning Documents to Consider

Suppose you needed surgery and when you were wheeled into the operating room the surgeon who was performing the operation asked you if you had brought the surgical and anesthesia tools and equipment. This may be absurd as a medical example, but it is an analogous legal estate illustration. In an estate situation, the lawyer looks to you to have prepared the tools and equipment to be used in your estate settlement. The lawyer’s ability to do better “surgery” on your estate is most often limited by the tools and equipment you have prearranged.

An estate planning attorney, probate attorney, trustee or personal representative, when assisting with an estate situation, needs to have the proper tools available, which you must provide for him or her to use. So the question is, what are the essential tools to consider for estate planning?

Simple wills, Living Trusts, a Durable Power of Attorney, a Health Care Power of Attorney, and Living Wills are usually considered the most important estate planning devices to preserve assets, facilitate inheritance, invite estate tax benefits, and create legal protection for personal, family and business objectives. Some clients wish to establish three estate planning documents for simplicity, but many others find added-value in the additional protection of four or five estate planning tools.