You might think estate planning is only for wealthy people with multiple properties and large investment portfolios, which is a common misconception that keeps many South Carolinians from protecting their families. The truth is, if you own anything of value or have people who depend on you, you need a basic estate plan. Even a South Carolina estate planning attorney will tell you that some of their most important work involves helping families with modest assets.
Estate planning is less about how much you own and more about making sure your loved ones are taken care of and avoiding unnecessary complications when you’re gone.
What Exactly is an Estate?
Your estate includes those things that you own when you die. This means your personal belongings, your car, house, bank accounts, life insurance policies, and retirement accounts. And the real truth is, most people have more than they think.
Consider this: a modest home with $50,000 in equity, a $15,000 car, $5,000 in savings, and a $50,000 life insurance policy adds up to a $120,000 estate. If you decide your assets aren’t worth planning for, your family might face months of court proceedings to gain access to these assets. This is because South Carolina requires probate for estates with personal property worth more than $25,000, which includes almost anyone who owns a home or has life insurance. Additionally, if the estate includes real estate, it must go through probate.
The Four Essential Documents Everyone Needs
A simple estate plan doesn’t require dozens of complicated documents. For most people, four basic documents provide essential protection.
Last will and testament: This tells the court who should receive your property and, if you have minor children, who should serve as their guardian. In South Carolina, your will must be signed by you and witnessed by two adults who are not beneficiaries or otherwise interested in the estate. While notarization isn’t required for validity, having it notarized makes it “self-proving,” which speeds up the probate process.
Financial power of attorney: This allows someone you trust to handle your financial affairs if you become unable to do so. In South Carolina, all powers of attorney are considered “durable,” meaning they remain in effect even if you become incapacitated.
Healthcare power of attorney: This document identifies someone who will make medical decisions for you if you can’t make them yourself. South Carolina provides a standard form that walks you through different scenarios.
Living will: In South Carolina, this is called a “Declaration of a Desire for a Natural Death.” This document specifies your wishes about life-prolonging medical treatment if you’re terminally ill or in a persistent vegetative state.
Creating Your Will: What You Need to Know
Many people delay making a will because they think it’s complicated or expensive. South Carolina doesn’t require you to use a lawyer to create a valid will, though working with an attorney is often recommended.
The law requires that you be at least 18 years old and of sound mind when you sign your will. The will must be in writing and signed by you in the presence of two witnesses who are at least 18 years old. These witnesses must also sign the will, and they should be people who won’t inherit anything under your will.
After you sign your will, consider having it notarized along with your witnesses. According to the South Carolina Code of Laws, a self-proving will can be admitted to probate without requiring the witnesses to testify in court, saving time and money.
Understanding Probate vs. Non-Probate Assets
Not all property is controlled by your will. Probate assets are things you own alone without a beneficiary designation and must go through court. Non-probate assets transfer automatically when you die, including jointly owned property, life insurance with named beneficiaries, and retirement accounts with beneficiary designations.
You can sometimes avoid probate by properly structuring asset ownership. Adding your spouse as a joint owner on bank accounts means those accounts automatically become theirs when you die.
Planning for Incapacity
According to the Social Security Administration, you’re more likely to become incapacitated than to die during your working years. Without proper planning, your family might need to go to court to access your accounts or make medical decisions on your behalf.
Financial and healthcare powers of attorney let you choose who will make decisions for you, rather than leaving it up to a judge.
Common Estate Planning Mistakes to Avoid
Don’t rely only on beneficiary designations. While naming beneficiaries on retirement accounts and life insurance is important, these don’t cover everything you own. You’ll still need a will for your house, car, and personal belongings.
Update your documents when your life changes. Marriage, divorce, children, and financial changes all warrant a review of your estate plan.
Don’t forget digital assets. Your family will need access to your online accounts. Consider using a password manager and including access instructions in your estate planning documents.
Getting Started
While you can create basic documents on your own, consider working with an attorney if you have minor children, own a business, or have concerns about family conflicts.
Remember that estate planning isn’t a set-it-and-forget-it type of event. Review your documents every few years or when major life changes occur. The most important step is to start. Even a simple plan is infinitely better than no plan at all. Contact us today to get started.