Estate planning is not only the process of sharing your property but rather the way you want to manage your wealth in the future.
In South Carolina, this process assumes special significance because of the differences in the laws of the state, taxation, and the requirement for protection from legal claims.
If you don’t have a well-thought-out estate plan, your assets may be subjected to taxes, debts, and sometimes even among the family members.
A recent online survey conducted by AARP in 2023 revealed that an astonishing 60% of Americans have not yet developed an estate plan, more reasons why everyone should start the process early.
Estate planning as a way of Wealth Protection
Asset protection is a process of safeguarding one’s property from legal claims, lawsuits, creditors, and taxes so that they are disbursed as intended.
Estate planning helps you to legally protect your property from claims by other people so that your wealth is passed to your loved ones, not strangers.
- Protecting from Creditors
In South Carolina, it is possible to shield assets from creditors by developing a good estate plan.
For example, some forms of property in trust may not be easily accessed by the creditors.
- Protecting from Taxes
Estate planning may also help avoid significant state and federal estate taxes so that your wealth can be transferred with as little a financial drag as possible.
Estate planning tools that can help protect your wealth
Some of the estate planning tools are listed below:
Wills
A will is one of the simplest forms of an estate plan and enables you to choose who should inherit your property.
If you die without a will, your estate will be governed by the laws of ‘intestate succession’ meaning that the South Carolina probate court will decide how your assets are to be divided, this might not be how you wish it to be.
Trusts
This is why trusts are such a great tool for protecting assets from creditors, lawsuits, and taxes.
There are two main types:
- Revocable Trusts
These are revocable, meaning that the individual who establishes the trust can alter the terms thereof.
They do not go through the probate process but do not protect the assets from the creditors.
- Irrevocable Trusts
When created, these cannot be changed. They offer better asset shields and can assist in cutting down the estate taxes.
Life Insurance
Making payments for life insurance can make your beneficiaries financially secure, and they do not have to make debt repayments once they are gone.
It can also be used to meet estate taxes, thus leaving more money to your next of kin.
Powers of Attorney
A durable power of estate planning attorney enables a trusted attorney to make financial decisions on your behalf in case you become incapacitated to ensure your wealth is not misused during your illness or disability.
In a 2022 study by the National Association of Estate Planners & Councils (NAEPC), 30% of estate plans included asset protection strategies like trusts and LLCs.
How to avoid paying a lot of estate taxes
These taxes can take a generous chunk out of the amount that you will be able to leave behind for your heirs, but there’s always a way to avoid this.
South Carolina has no state estate tax, but there may be federal estate taxes.
Strategies to Minimize Estate Taxes
- Gifting Strategy
The gift tax law of the IRS permits individuals to gift $17,000 per year to a specific recipient as of 2023.
- Charitable Contributions
Gifts to charities via a trust or bequest can minimize the estate tax.
Federal Estate Tax Exemption Limits (2024)
| Filing Status | Exemption Limit |
| Single | $13,610,000 |
| Married | $27,220,000 |
Ensuring Business Continuity
Family businesses have unique characteristics that make estate planning unique in these businesses.
If there are no plans made in advance the business may be subject to litigation or even shut down after the owner’s demise.
- Succession Planning
Having a successor can guarantee that the business will run as planned when you are no longer around to run it, whether you retire or die.
- Buy-Sell Agreements
They can also state what happens to the business when one of the owners dies or becomes disabled.
Protecting Wealth for Beneficiaries in South Carolina
One of the most important goals of estate planning is to make sure that your heirs receive the wealth you’ve worked hard to accumulate.
Trusts can be designed to protect assets for minor children, disabled heirs, or even for a specific purpose, like education.
- Special Needs Trusts
These trusts ensure that children or loved ones with special needs are taken care of without risking their eligibility for government benefits.
- Spendthrift Trusts
These provide a way to control how assets are distributed to beneficiaries, protecting them from potential financial mismanagement or creditors.
Advantages of Hiring a South Carolina Estate Planning Attorney
Although there are numerous resources online, as well as an abundance of legal software programs that can help a person complete a divorce without any legal assistance, these methods do not take into consideration all the peculiarities of South Carolina law and may not consider the individual needs of a family.
There are many issues involved in estate planning and a good attorney can help you comb through all the issues to ensure that everything is legal and in agreement with your desires.
- Local Expertise
A member of the estate planning lawyer will be well informed about the laws of South Carolina regarding probate, taxes, and the best ways to shield your assets.
- Custom Solutions
Our expert lawyers will assist in developing an estate plan that best meets the needs of your family, including maintaining the management of a business or preserving assets for an heir.
Let us assist you in navigating the legal complexities of the protection of your wealth to ensure it reflects your current wishes and needs in South Carolina. Contact Max Hyde Law Firm at (864) 804-6330 to schedule a free consultation and move forward with confidence, knowing your legacy and loved ones are well-protected.
