How Does South Carolina Law Treat Out-of-State Properties in Estate Planning?

Estate Planning is Essential For All Families

No matter the size of your estate, creating a comprehensive estate plan is an excellent option for all of us. Though it can be difficult for some of us to face our mortality, it’s incredibly caring and kind for you to spend some time answering questions and clearing any confusion for the loved ones you leave behind.

An appealing characteristic to many regarding creating an estate plan is that doing so allows you to remain in control of how you wish your assets to be utilized long after you are gone. You likely spent most of your life accumulating assets. Let’s ensure they continue to work for you even after you have passed.

What is Probate?

Probate is the process that begins after death and includes overseeing how the estate is disbursed. This legal process can be lengthy and expensive and is almost unavoidable. All the while, your assets are typically held until the process is complete.

Courts will assist a personal representative in overseeing that all your assets are dispersed in the way you wish them to be, that all debts are taken care of through liquidating assets as necessary, and that taxes are paid. Once this is all complete, the probate process can end, and assets can be dispersed to the appropriate beneficiaries.

Out-of-State Property and Probate

South Carolina courts will have jurisdiction over all property within the state, but what if you have property somewhere outside of South Carolina? Many have property that they have accumulated throughout the years in another state. It may be a second home, a vacation rental that they invested in, or recreation land that they own in another state.

Accounting for this property through the probate process is different in South Carolina. As probate courts won’t have jurisdiction for property in other states, barring minimal exceptions, an ancillary probate process is almost always necessary. Ancillary probate is a secondary probate process within another state that must be initiated to transfer ownership properly. 

Ancillary probate is an additional process, so the idea of having two probate processes to endure may be daunting. It’s important to plan ahead and ensure that all property that is yours, regardless of the state it’s in, is carefully designed to avoid multiple probate processes, which are typically costly and lengthy.

Why Are Trusts So Appealing?

If you are considering a comprehensive estate plan, that’s the first step in the right direction to protect your assets and continue to provide for your family long after you are gone. One of the most appealing tools, amongst many options, in estate planning is a trust.

Setting up a trust typically allows you to avoid the probate process for the assets that are within that trust. What this means for your loved ones is that those assets can be transferred much more seamlessly upon your death rather than entering a court process and waiting for your estate to be settled.

Types of Trusts in South Carolina

A revocable trust can be modified or revoked at any time by the creator, referred to as the grantor. Flexibility is the main advantage of this popular tool. However, as you still maintain control over the assets within the trust until death, escaping taxes upon death isn’t likely for the assets within.

The grantor cannot revoke or modify an irrevocable trust at any time, barring minimal exceptions. Though some view an irrevocable trust’s rigidity as unappealing for lack of flexibility, they can provide some tax benefits to beneficiaries and loved ones left behind.

Additionally, several trusts meet your family’s custom needs, such as a Special Needs Trust, a Spousal Lifetime Access Trust, a Grantor Retained Annuity Trust, a Dynasty Trust, and more. Speak with your experienced estate planning attorney to help understand what options best align with your needs and the needs of future generations.

What Can I Fund a Trust With?

There are several options that many use to fund a trust. You can utilize assets such as cash, bank accounts, securities, and other liquid assets. You can also fund a trust with life insurance proceeds. Nearly any real property can also be used to fund a trust. Real property includes homes, land, commercial property, and more.

Your out-of-state property can be placed in a trust to help avoid the probate process for that asset. Furthermore, avoid an ancillary probate process by setting up your out-of-state assets in a trust for your loved ones so they can seamlessly transfer the asset as instructed through the trust and not have to wait for the assets to become available.

Decades of Experience Equates to Invaluable Legal Guidance

For nearly 30 years, we have been serving clients with multiple facets of family law, personal injury, and estate planning needs. We treat each client with patience, compassion, and respect and give them a voice when they want to be heard.

With so many estate planning tools available in what isn’t a one-size-fits-all landscape, you can fully customize your estate plan and ensure that your specific needs are met. You get to remain in the driver’s seat and create a strategy that protects what you have worked your entire life for while providing for your loved ones and generations to come long after you are gone.

Call our office today at (864) 689-4482 to learn more. Our firm is full of driven and compassionate humans, ready to assist you and your unique vision for your future and future generations.