7 Reasons to Consider a Living Trust

A valid will is not enough to ensure the security and timely distribution of your assets in accordance with your wishes when you die.  You should consider establishing a living trust in addition to your will.

The larger the value of your estate, the greater the need to create a living trust and ensure the transfer of your significant assets into it while you are still alive.

Read on to find out more about the seven reasons to consider a living trust that will protect your estate and save your heirs time and money.

But, first…

What Is a Living Trust?

living trust is a legal, enforceable document that holds property transferred by the Grantor (aka the Trustor, which is the person or persons who created the trust) for the benefit of others (the beneficiaries) and managed by the Trustee.

It is called a “living” trust because it is established while the Grantor (Trustor) is still alive. It can be designated as either revocable or irrevocable. A revocable trust can be revoked or amended by the Grantor, who signs the trust document. 

Let’s say you have decided that a living trust is well worth the extra time and expense of setting it up (it is more complex than just making out your last will). You need professional advice in order to get it done right. Learn more here.

The primary purpose of a living trust is to manage your assets during your lifetime and to enable this property to be distributed to your beneficiaries (e.g., surviving spouse or children) easily, without having to go through probate.

What Are the Benefits of a Living Trust?

There are several reasons to have a living trust created, but it is not needed in every case. For a young married couple with few assets and no children, just having a will may be good enough. 

But, for situations where assets have been accumulated and you want to ensure timely and orderly distribution to your beneficiaries upon your death, read on.

Avoid Probate

One of the biggest reasons to have a living trust is to avoid probate.  Probate is a legal mechanism by which the decedent’s estate gets settled under the supervision of the court, or judicial authority.  Unless there is a living trust set up!

The purpose of probate is to prevent fraud after someone’s death. The court must determine the validity of the will, that all pertinent people have been notified, that all property has been identified and appraised, and that all creditors and taxes have been paid.   

Only after all that has been done will the court allow distribution of assets and closing of the estate. Until then, it is a waiting game for the beneficiaries.

Once you die, South Carolina law requires that your will is to be delivered to the Probate Court within thirty (30) days — unless you have a living trust. 

The key to avoiding probate is to ensure that the trust is “funded” before you pass away. You must transfer ownership (separate paperwork) of all your significant property, cash, stocks, and bonds to the trust — to be administered by the Trustee. 

South Carolina has a “small estate” limit of $25,000. There is simplified probate (called an out-of-court affidavit procedure)  available in South Carolina:

  • If the value of property passing by will or under the law — except for liens and encumbrances — is $25,000 or less, a probate judge may approve the affidavit
  • There is a 30-day waiting period

Decreased Estate Taxes

If you are married, the trust can provide for estate tax savings, especially if it is a joint living trust. Of course, much of the savings depend on the value of your estate at the time of your death. 

Also, any costs associated with the probate process are deducted from the estate. So are any court costs associated with contesting a will. Those costs could be avoided if a living trust is legally and properly established and funded.

Greater Privacy for Your Beneficiaries

A will is a public document and all probate proceedings associated with that will become a matter of public record (including listing your assets). A living trust is a private document and distribution of your estate upon your death is private, too.

Protects Your Interests during Your Lifetime

Once your living trust has been created and funded, if you later become incapacitated, the successor trustee you designated will be able to manage the trust assets for your benefit — without any court intervention.

This is a big benefit for people who are single or those who do not have children. The living trust arrangement ensures that you are provided for during your lifetime even if you cannot make decisions for yourself.

This is important, though. As long as it is set up as a revocable living trust, if you dispute the determination of your incapacity, you can revoke the trust and retain control yourself.

Protects Your Minor Children

Minor children are often not responsible enough to manage large sums of money themselves. The trust can be set up to disperse money to children when they get older and more mature, or even to distribute funds staggered over a range of ages.

Protects Your Adult Children

Some adult children may never be able to manage an inheritance on their own, maybe due to a substance abuse problem or just because they are frivolous with money management. The trustee can dispense funds as needed over time.

Keeps Your Assets Out of Unwanted Hands

Say you have a child who is marrying a person you do not care for. What if they were to divorce? You do not want half of your assets winding up with your child’s ex-spouse.  

These Are Great Reasons to Consider a Living Trust

At Indigo Family Law, we are experienced at creating living trusts. Our team can help you go through the complexities of getting one in place to benefit you and your heirs. 

Now that you know why you should consider a living trust, contact us today and let us help you get all your questions answered.

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Facts You May Not Have Known About Estate Taxes

Thinking about passing on your estate to your children or grandchildren? 

You best cross your “t”s and dot your “i”s.

If you are thinking about passing on your estate, you have probably heard rumors about taxes. But what do they mean for you and your family? 

Here, we will dive into 5 fascinating facts about estate taxes so you have a better idea of what to expect. 

South Carolina Is an Ideal State to Pass Away In

Estate taxes vary from state to state. Some states enforce estate taxes, although the amounts change. Others do not enforce them at all. 

South Carolina is one of the states that does not impose either estate or inheritance taxes. Prior to 2005, the state had a “sponge tax” which took a portion of estate taxes given to the federal government. 

Now, however, the state does not impose any “death” tax. 

Other citizens are not so lucky and must pay careful attention to tax laws. Regardless of how carefully individuals have drawn up a will, inheritors may face stiff taxes depending upon location. 

Estate Taxes Do Not Apply to Most Americans

Put your fears to bed: the estate tax does not affect most Americans. In fact, you must be in the wealthiest tier of citizens to experience the tax. 

Prior to 2017, only 2 in 1,000 estates faced a tax. That number fell to 1 in 1,000 after exemptions doubled.

More than likely, the estate tax will not affect you or your family. Of course, that does not mean you should not partake in estate planning

Many Families Might Be Shocked in 2025

In 2025, exemption rates will drop to half what they are now, affecting estates worth approximately $5.5 million per individual.

Because the rates increased recently, many families assume the tax will not ever apply to them. The change may come as a nasty shock to many. 

This, again, is why estate planning is so important. Changes in tax laws mean individuals should update wills regularly, otherwise they may find themselves in a similar situation as actor Philip Seymour Hoffman’s family

Hoffman left his estate to his only child at the time he drafted his will but failed to update it after tax laws changed and he had additional children. Consequently, his wife and remaining children suffered. 

Other Countries Tax More

America has an estate tax rate at 40%. Does that sound steep? Not compared to some other countries. 

Japan has the highest rate of all at 55%. South Korea follows with 50% and France comes in third with 45%. 

America falls fourth in line when determining which countries have the highest estate taxes.

It Is Nothing New

The estate tax has existed for centuries. In fact, it was common during the medieval era. 

During this period, kings demanded payment in the forms of “reliefs” from heirs who received property. It was from this notion that many European countries created the idea of inheritance and estate taxes. 

Protect Your Family’s Future

Estate taxes may not concern you. However, it is important to understand the changing laws regarding wills, property and more so that your family is secure. 

Changes in your personal life as well as in the government may have unforeseen results, which is why our professionals are available to help. We will ensure your family is protected from these changes, and we will work to create an estate plan that reflects your legacy. 

Call us today to discuss strategies and to secure your family’s future.  

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4 Reasons Why Choosing Beneficiaries is a Good Thing

Having a family is one of life’s greatest joys. There is so much to look forward to — graduation, marriage, grandkids. Of course, these things require a lot of financial planning like 529 savings plans for college, or trust funds.

One thing we hate to think about, however, is how to plan for our loved ones’ financial well-being when we pass on. One of the ways you can make sure that your loved ones are taken care of is to set up beneficiaries for things such as life insurance and your estate.

Want to learn more about choosing beneficiaries? We have got you covered. Read on to learn about the reasons for selecting beneficiaries!

It Gives You More Control

You have control over your financial assets now, why would you not want control over their distribution when you pass on? 

If you pass without having a will or beneficiaries set up, then it is ultimately up to your next of kin to decide how to divide up your assets. In the event that there is a dispute over who should get what, then it will be up to a judge to make that decision.

Choosing beneficiaries now ensures that you are in complete control of your assets.

Choosing Beneficiaries Makes Distribution of Assets Less Stressful

We want to think that our family will be able to divide up assets in a civil manner. Unfortunately, that is not always the case. The stress of the loss of a family member and dividing up their assets can do a lot of damage to relationships.

By pre-planning who gets what, your loved ones can avoid the stress and hurt feelings of dividing up your assets. 

Your Beneficiaries Can Avoid a Lengthy Probate Process

Probate is a notoriously long process by which the executor or administrator of the estate manages the assets of the estate to make sure that all assets are collected, debts are paid, and all property is distributed. Probate is more complicated when there is not a will, or an existing will needs verification.

Not all property must go through probate. Most states will allow a certain amount of your estate to get passed on to your loved ones without going through probate first. Life insurance policy payouts can bypass the probate process entirely so long as there are designated beneficiaries.

Peace of Mind

If nothing else, setting up beneficiaries will give you the peace of mind that you have done everything that you can to make sure your loved ones will continue to prosper, even if you pass.

Estate planning may not be a fun thing to think about, but it is still incredibly important if you want your loved ones to enjoy financial stability after you pass on. When it comes to estate planning, it is never too soon to get started.

Ready to Set Up Your Beneficiaries?

Choosing beneficiaries for your estate and insurance is an incredibly important step in planning for your family after you pass on. Not only does it give you control of who gets what portion of your policies and estate, but it also prevents tension among family members.

Ready to start planning for your family and loved ones after you pass on? We can help guide you through the process. Contact us today to see how we can help you!

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7 Tips for Making a Will That Benefits Your Children

Did you know 60% of American adults do not have a will? That seems like a significant oversight for a document of such magnitude.

It is the one document that can prevent your estate from falling apart after you pass.

When making a will, there are a few key components to keep in mind. Here are seven tips that will benefit your children. 

Name Your Spouse as Guardian

Sure, this sounds like common sense. If one spouse dies, the other spouse will remain the guardian of the children. However, believe it or not, there have been cases where, when one spouse dies, an outside party makes a play for custody of the children. When this happens, it is up to a judge to decide where the children shall remain.

Name an Alternate Guardian

If the worst case scenario, both parents should die, or you do not have a spouse, you will want to have an alternate guardian in place. Who in your life is well-positioned to care for the children, provide for them, and love them? Think about that and put it down in writing.

Designate a Trustee

After the children’s future guardian is secured, it is time to consider the property. Name a trustee to manage your estate until the children become of legal age.

This person will have full control over the money, real estate, and any assets. So, make sure you trust this person beyond a shadow of a doubt. 

We often see the guardian go on also to become the trustee. But, this is not a hard and fast rule. You will want someone who is fiscally responsible and supremely trustworthy.

Pay Your Trustee

The person you select to guard your property will spend a lot of time and resources handling the estate’s affairs. As such, it might be nice to compensate them for all their efforts. 

This does not have to come in the form of assets through the will. Instead, you can set aside an amount to compensate them.

Each state has a set of provisions in their probate codes, indicating how much a guardian can be paid. Your attorney can guide you on local law. 

Consider a Family Trust

Before you dive into probate law, ask your attorney about a family trust. In some cases, a trust can help your loved ones avoid probate and even save money when it comes to inheritance taxes. Of course, this will depend largely on your unique situation. 

Consider Conditional Gifts

In your will, you can include gifts that come with a prerequisite. This will allow you to rest assured that some of your wishes are being granted before your children inherit the estate. For example, you can condition a gift after the children reach a certain age or graduate college. 

Appraise Your Property

While specific property values fluctuate i.e., homes and cars, you can have other items appraised. Perhaps you have certain antiques or heirlooms. Including these amounts in your court documents allows you to be as specific as possible. 

Making a Will for Your Children

Sure, it is hard to consider a world where you do not exist. But, you can do so much to tie up loose ends and make sure everyone is provided for even after you are gone.

Making a will is not the most straightforward task but, here at Indigo, we put the family back in family law. Contact us today!

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