Most young parents think estate planning is something they’ll handle “someday.” You’re busy paying the mortgage, raising kids, and building your career. But here’s what every South Carolina estate planning attorney will tell you: if something happens to you without a proper plan, the state decides what happens to your children and your money.
This isn’t meant to scare you, but it’s important to understand the reality. If both parents die unexpectedly, someone must step in to care for your children. If you haven’t chosen that person, a judge will pick from whoever shows up at court and applies for guardianship. It might be a family member who doesn’t share your values, or someone who simply isn’t equipped to raise children.
How South Carolina Handles Families Without Estate Plans
When someone dies without a will in South Carolina, the state follows specific rules about who inherits what. If you die and leave behind a spouse and children, the division depends on how many kids you have. With one child, your spouse gets half and your child gets half. With multiple children, your spouse only gets one-third while the children split the remaining two-thirds equally.
This creates serious problems because children inherit their share immediately, even if they’re minors. Your eight-year-old could legally own part of your house while your spouse struggles financially with just a fraction of the estate. Even worse, your spouse might need court approval to make decisions about the family home since the children are now co-owners.
South Carolina law also requires that heirs survive the deceased person by 120 hours (five days) to inherit anything. Additionally, any estate worth more than $25,000 must go through probate court, and this includes almost any family that owns a home. The probate process takes months and costs money your family doesn’t need to spend during an already difficult time.
It’s also important to know that stepchildren cannot inherit anything through South Carolina’s intestacy laws. The law only recognizes biological children and legally adopted children. If you want your stepchildren to inherit from you, you absolutely need a will.
Choosing Guardians for Your Children
Selecting guardians is one of the most emotional decisions you’ll make. You’re basically choosing who will raise your children if you’re not around, and many parents avoid this decision because it feels overwhelming, but it’s crucial to your children’s future.
Start by thinking about your values. Do you want your children raised with specific religious beliefs? What about education priorities or discipline styles? Make a list of what matters most to you, then consider who in your life shares those values and has the ability to take on additional children.
Remember to name both a primary guardian and a backup option. You should also consider naming a separate person to manage any money you leave for your children’s care. The best parent isn’t always the best financial manager, and this separation creates helpful checks and balances.
One important note: guardian nominations in your will aren’t automatically binding on the people you choose. Courts typically honor these nominations unless there are compelling reasons not to, but your chosen guardian can still say no. That’s why it’s essential to have conversations with potential guardians before naming them in your documents.
Financial Protection and Life Insurance
Life insurance becomes especially important when you have children depending on you. A term life insurance policy can replace your income if you die while your kids are young. The good news is that young, healthy people can typically get substantial coverage for relatively affordable monthly payments.
Consider buying enough coverage to pay off your mortgage and cover your children’s living expenses until they become adults. You might also want to set up trusts for your children rather than leaving money directly to them. A trust gives you the ability to control when and in what way your children receive their inheritance. For example, they might get money for college at 18, more at 25 for a house down payment, and the remainder at 30.
Don’t forget about disability planning either. You’re actually more likely to become disabled than to die while your children are young. Powers of attorney let someone else make financial and medical decisions if you become incapacitated. Without these documents, your family might need to go to court just to access your bank accounts or make medical decisions on your behalf.
Avoiding Common Mistakes
Many couples think that if one spouse has a will, they’re covered. This isn’t true. What happens if you both die in the same accident? Each spouse needs their own will that covers what happens to both separate property and jointly owned property.
Some parents rely only on beneficiary designations for things like bank accounts and retirement plans. While these work for those specific accounts, they don’t cover everything else you own, and they don’t address guardian nominations for your children.
Also, avoid naming minor children as direct beneficiaries on life insurance policies. The reason for this is that insurance companies won’t pay large sums directly to children, so the money gets tied up in court proceedings. Instead, name your spouse as the primary beneficiary and, as a backup, your revocable trust or a custodian under the South Carolina Uniform Transfers to Minors Act (UTMA).
Also, don’t forget about digital assets. Your family will need access to online accounts, password managers, and digital photos. These types of digital assets require specific provisions in estate plans.
Getting Started Without Breaking Your Budget
Estate planning for young families doesn’t have to be expensive. Many attorneys offer flat-fee packages for basic documents like wills and powers of attorney.
Start now, even if your situation isn’t perfect. Good planning today beats perfect planning that never happens. Don’t leave your children’s care and financial security to chance. Contact us today to learn more. Contact us today to learn more.