Do I Need an Estate Plan? Why Is Estate Planning Important?

Estate planning is not one of American’s top priorities. 64% of Americans have not had a will prepared. Half of those surveyed either feel they do not need a will or they just have not found the time to make one.

You may be asking yourself, “Who needs estate planning? Do I need estate planning? If so, do I need an estate planning attorney?” 

Why is estate planning important? 

If you want your estate to end up with your loved ones after you are gone, you will want to explore various types of estate plans. Is a living trust the way to go? Or a last will and testament? 

Let’s look at some of the reasons why estate planning is important and then you can choose the right path for you. 

Why is Estate Planning Important? 

Estate planning is a term used to describe the act of making a will, choosing an executor and/or preparing other important documents such as a health care proxy and power of attorney.

Though you may not have a million-dollar estate, you will still want to have a say in what happens to it when you die. 

Consider these reasons for estate planning. 

1. Estate Planning Can Reduce or Eliminate Estate Taxes

If you are asking yourself, “Why do I need an estate plan?”, eliminating the need for paying additional taxes may be a top reason.

You have worked hard for what you have and finding the most tax-efficient way to transfer it to your children or another beneficiary is the smart thing to do. It can be a complicated process, however.

If you are asking yourself another question like, “What is an estate planner?”, you will find that you need one. An estate planner is a professional who helps you sort out all of the complicated tax laws and works to create the best plan for turning over your estate after you pass. 

2. Not Having an Estate Plan Can Cause Family Chaos

You know it happens…a family member dies and the fighting over the estate begins. One child or grandchild may think they deserve to be in charge, one may think they deserve more money, one may want all the jewelry, etc. 

An estate plan allows you to choose an executor of the estate in the event that you become incapacitated or after you die. It also allows you to explicitly state to whom you would like your assets to go. It will eliminate family quarrels if everything is spelled out for them. 

3. Peace of Mind for Families with Young Children

None of us want to think about dying and leaving behind young children, but don’t you want to be prepared in the event that it happens? 

Creating a will and naming guardians for your children will prevent the need for the court to intervene.

You can specify who will raise your children and the manner in which you would like them to be raised. You can also rest assured that your assets are transferred to them either in a trust or for their care as they grow. 

Got An Estate Plan? 

You have just learned a few of the reasons that answer the question, “Why is estate planning important?” We at Indigo Family Law can help you with estate planning and answer any questions you may have. Contact us today

  • This field is for validation purposes and should be left unchanged.

3 Most Common Estate Planning Strategies

Estate planning…something we should all do, but most of us put it off. 

Do you think about your estate planning options?

60% of Americans have not gotten around to planning for the end of life. Though, the good news is that 81% of older folks, age 72 and up, have their estate planning documents in order. 

While many people think they are too young to worry about planning for what happens to their estate after their gone, it is beneficial to plan early. 

What will happen to your home, your stocks and bonds, your life insurance, and your personal belongings? 

Estate planning is different for each individual. What are the most common estate planning strategies used in 2019? Let’s look at three plans that are often used and see which one fits for you.  

The 3 Most Common Estate Planning Strategies

Having a plan for your estate and choosing your estate beneficiaries will give you peace of mind. Estate planning will ensure that your estate ends up where you want it after you are gone. 

Revocable Living Trust

A Revocable Living Trust is a popular estate planning strategy. It is called a living trust because you create it and benefit from it during your lifetime.

If your circumstances take a different direction at some point, no worries. The trust is revocable as it can be changed if you change your mind about anything or anyone named in the trust.

The living trust contains instructions regarding what happens to your assets after you pass. It also preserves your privacy. 

It differs from a will in that it avoids probate or the court handling of your estate. The court will not control your assets, so you will avoid expensive court costs and save time. 

This strategy can help you eliminate or at least lessen estate taxes by using credit shelter provisions. 

Last Will and Testament

In your last will and testament, you will name your estate beneficiary. It is a legally binding document that allows you, rather than the state, to decide what happens to your assets. 

If you have minor children at the time of your death, your will also names who will receive guardianship of your children. 

A will goes through probate and cannot be enforced until it is validated by the court. 

Beneficiary Designation

In this scenario, you choose a beneficiary to receive proceeds from your trust, life insurance, or IRA, for example, upon your death.

Two types of beneficiaries exist:

  • Primary – first in line to receive the asset for which they are named a beneficiary
  • Secondary – will receive the assets if the primary beneficiary is deceased at the time of your death

You should periodically review your designated beneficiaries as you experience life changes such as getting married or having a child.  

Which Strategy Will Work Best for Your Circumstances?

You have now learned the most popular estate planning strategies. Do your homework and get some advice on the best strategy for you and your circumstances.

Contact us with any questions you have or to schedule a consultation. 

  • This field is for validation purposes and should be left unchanged.

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.

  • This field is for validation purposes and should be left unchanged.

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.  

  • This field is for validation purposes and should be left unchanged.

5 Facts to Help You Understanding the Importance of Estate Planning

5 Facts to Help You Understanding the Importance of Estate Planning.

When is the last time you stayed in a castle?

That is the first thing you picture when someone starts talking about their estate, right?

It would be nice if we all had several million dollars and a boat to leave for each of our kids. But you do not need to be on a first-name basis with Bill Gates to start deciding what to do with your assets in the event of your death.

We have put together these five important facts to help you understand estate planning. Life is unpredictable, and you do not want to leave your family unprepared.

Keep reading to learn more.

You Have an Estate Even if You Rent

Your estate is everything you own and all the financial information attached to your name.

The word “estate” usually sends people daydreaming about mansions and golf courses. But if you own a car and have a bank account, those count as part of your estate, legally speaking.

Even if you are still working your way out of debt and renting an apartment, everyone has an estate worth planning.

Your Will is Just the Beginning

Estate planning is a detailed process that takes time. It is not just one document, and there is so much more to plan besides which kid gets your novelty coin collection.

Planning an estate typically includes:

  • Assigning financial power of attorney
  • Assigning medical power of attorney
  • Creating advance directives for your healthcare
  • Putting aside money for funeral expenses
  • Creating a living trust

Do not stress! Start slowly with a will, and keep scheduling the time to add more as you keep thinking about what you want.

If You Do not Decide, Uncle Sam Will

Anyone who dies without a will or any kind of estate planning leaves the future of all of their assets to the state government.

This does not mean the state government takes everything you have. But it does mean you have no way of knowing which relatives will get what.

It is Not as Expensive as You Think

You do not have to spend a fortune to plan your estate.

Though there are legal fees involved with filing these documents, paying ahead of time reduces expenses for your family after your death. While you are spacing out appointments to estate plan with your family lawyer, you will have time to save up for these fees.

You Are Never Too Young to Start

Estate planning is not just for AARP members.

Because estate planning is a process, the sooner you start, the better. And while death is not a light-hearted subject, it is still a significant financial event you need to be prepared for.

Think of it as investing in your future and investing in your family. The sooner you start the estate planning process, the more time you will have to figure out every last detail.

Still Do Not Understand Estate Planning?

For even more information to help you understand estate planning, check out more from our blog.

Better yet, do not wait.

Schedule a consultation with one of our skilled estate lawyers today.

  • This field is for validation purposes and should be left unchanged.

5 Helpful Tips of Estate Planning so You Don’t Pull Your Hair Out

Nobody enjoys thinking about their mortality, and sorting through legal documents is not what most people would call a good time. This hesitation makes sorting through legal documents about your eventual death seem dangerously stressful and, perhaps, dull.

That is probably why half of us do not have a will of any kind.

Relax. We have got some tips that help take the stress out of preparing for your future.

Keep reading to learn five essential tips of estate planning.

Know Your Worth

The most essential first step of estate planning is doing an inventory of all your assets.

Your total estate worth is so much more than just land you own. Any retirement fund, life insurance plan, Roth IRA, stock investments, collector’s items, and even your debt count as part of your estate.

Keep a detailed account of all your debts and assets in a safe place with the rest of your estate planning documents. Wherever you decide to keep these documents, make sure your family can quickly get to them.

Lawyer Up

The next thing you will need is an estate planning attorney. They will be able to help you navigate things like property taxes and drawing up your will.

Speaking of attorneys… Identify who you want to have power of attorney over you medically and financially.

Okay, so having power of attorney does not make you a lawyer. But whoever you assign power of attorney will be able to make decisions for you if you become unable to make those decisions for yourself for any reason.

Ex: If you are rendered unconscious in an accident, someone needs to be able to give consent for critical medical procedures.

Where There is a Will…

Your living will and last will might be the most important parts of your estate planning.

living will is also called an advance directive. It gives detailed instructions for your medical and financial power of attorney, so they know how to meet your needs best while you are still alive.

Your last will and testament give detailed instructions for what to do immediately following your death.

Plan Your Funeral, So They Do Not Have To

One of the most helpful tips of estate planning is putting money aside for your funeral arrangements in advance.

Do you want to donate your organs to people who need them? Would you prefer to be buried, or cremated?

Spell out your preferences, so your family has less to worry about.

Trust Your Beneficiaries

You get to pass on everything you own to the people you love two different ways:

With a trust; this dictates exactly who gets your property without going through a public court. Your trust determines who gets your car, your house, etc.

The people you name as beneficiaries will inherit the assets you own that are not physical pieces of property; including, bank balances, stocks, investments, etc.

More Tips for Estate Planning

For even more helpful legal information and tips of estate planning, stay tuned for more updates on our blog.

Do not be shy. Ask for a consultation with one of our skilled legal professionals today.

  • This field is for validation purposes and should be left unchanged.

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!

  • This field is for validation purposes and should be left unchanged.

3 Tips for a Paying a Low South Carolina Estate Tax

You love your family more than anything, and you want to ensure that they have every opportunity to thrive–even after you are gone.

Life happens in the blink of an eye. You have no way of knowing what will happen tomorrow, but you can take steps to protect your family in the future with your estate. 

Of course, it is not as simple as naming your family members as beneficiaries of your assets. You also have to deal with the South Carolina estate tax.

Here are three tips to help you sidestep the estate tax and ensure that your family gets the maximum benefit. 

Generation-Skipping

Generation-skipping, sometimes done via a generation-skipping trust, is when you transfer a portion of your estate assets to your grandchildren rather than passing the assets to your children. 

Typically, your assets are taxed twice on the way to your grandchildren: first, when they pass from you to your children (second generation), and again when your children later transfer them to their children (third generation). 

Generation-skipping sidesteps the intermediate tax. The downside, of course, is that your children cannot access assets that get designated to your grandchildren (which your children may not be happy about). 

Most people take a moderate approach. They designate as many assets to their children as they think they will need and elect the excess be apportioned to their grandchildren. 

Lifetime Gifts

If you are not entirely comfortable with generation-skipping, you can take a more proactive approach with lifetime gifts to your children and grandchildren.

This is precisely what it sounds like: rather than waiting for your assets to pass when you die, you directly gift part of your assets to your children and grandchildren. 

Every year, a person can make a gift of up to $12,000 without incurring a gift tax. If both you and your spouse give the maximum amount, you can collectively gift away $24,000 per year per recipient. This gift, in turn, reduces your taxable estate. 

It does require you to be comfortable giving away a portion of your assets while you are still alive–or have the financial bandwidth to do so. If you are worried about running out of money, though, this may not be the right choice for you, as it is inordinately difficult to reclaim this money once you have gifted it away.

Put Your Assets in a Trust

Ultimately, the only real way to protect your whole estate against taxes is to put it in a trust, though most people are wary of this option since it signs control of your assets over to someone else. 

First, keep in mind that there are many different types of trusts you can create, and you can designate almost anyone to manage the trust for you, including a family member. 

If you do decide to establish a trust, though, it is essential to work with an estate planner, as there are many rules and exemptions attached to trusts that you may not be aware of. 

Need Help Figuring Out South Carolina Estate Tax?

At Indigo Family Law, we know that family is the only thing that matters. We also know that time flies, especially for busy parents.  That is why we are here to help you figure out the South Carolina estate tax–or whatever else you might need.

If you would like to speak with a lawyer about your options, use our contact page to get in touch.

  • This field is for validation purposes and should be left unchanged.