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Key Estate Planning Documents

Posted on October 2, 2014 at 9:25 AM Comments comments (0)

Key Estate Planning Documents 

Laura H. Huggins


1. Will: This document governs the distribution of PROBATE property, which is generally all assets other than property owned with CORRECT right of survivorship language, retirement benefits payable to a person, life insurance payable to a person, and other investments that have a beneficiary or pay on death designation. What are some risks of not having a will?


a. Dying without a will may mean items pass in ways other than you would expect or desire. For example, if a husband or wife dies with no will and is survived by a spouse and children, the spouse gets half, and the children split the other half. If a single person dies with no will, the probate estate passes to their parents(s) or if none, to brothers and sisters in equal shares. SC Code 62-2-102 & -103


b. Dying without a will may mean that the person you trust with your finances or children may not be the one who gets assigned the responsibility. Appointing your own personal representative or trustee is generally preferable to someone who may not know and understand your needs and family dynamics. While the “best interests of the child” is the standard of care for children in our state, a court will give weight to a parent’s designation. Thoughtfully considering care of minor children and discussing with the prospective caregiver and your children can also minimize turmoil in the event of your death.


c. Dying without a will may mean your body may not be disposed of in the manner you prefer. For example, if you want to be cremated, there must be an authorization. SC Code 32-8-320


2. Deed with Survivorship Language: Joint ownership of property by long-time spouses (assuming no Medicaid problems) or by a single parent and an only child can greatly simplify transfers and allow access to assets to pay bills when individuals are elderly or infirm.


a. Joint Tenants with Right of Survivorship. SC Code 27-7-40. Right of survivorship can be terminated by act of one cotenant. Subject to partition SC Code 15-61-10.


b. Tenants in Common with Right of Survivorship. Single cotenant may NOT act unilaterally--cannot convey or voluntarily encumber her interest or destroy the survivorship without the agreement of the other. Not subject to partition. Creditors of one spouse arguably not allowed to reach property titled in both TICROS.


3. Current Beneficiary Designations on Life Insurance and Retirement Benefit Accounts


4. Durable Financial Power of Attorney: This document endures your incapacity and allows you to appoint someone you trust to manage your assets and finances.


a. A DPOA must contain “magic words” and be recorded in county where you reside at time of recordation to be durable. SC 62-5-501


b. Gifting must be specifically authorized.


5. Health Care Power of Attorney: This document allows you to appoint someone to make health care decisions on your behalf and  "springs" into effect upon your mental incompetence (except for HIPAA authorization, which is effective upon execution).


a. Living Will trumps if a conflict.


b. Consider issues if different agents amongst the various POAs/living will.


6. Living Will: This document allows you to make elections to provide or not provide nutrition and hydration if you are in a state of permanent unconsciousness or have a terminal condition.


a. Power to Revoke vs. Power to Enforce Options.

 


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