Estate planning isn’t just for the wealthy, it’s for anyone who wants to protect their family, preserve their legacy, and avoid unnecessary cost and conflict among their heirs after they’re gone. Despite its importance, many South Carolinians make avoidable mistakes that can undermine their wishes, delay distributions, and subject loved ones to probate court battles that they never dreamed would happen in their own family. Below are some of the top 10 estate planning mistakes I see as an estate planning and administration attorney in South Carolina, and how you can avoid them yourself.
1. Planning Too Late
Delays in planning are the number one enemy of effective estate planning. Many people delay planning until certain perceived benchmarks, like retirement or after a serious health event. Sadly, sometimes they are too late. Without effective planning in place before incapacity or death, your loved ones may have to seek permission from a judge in order to make decisions about your health, finances, living conditions, daily activities, the distribution of your property, and more. These procedures can be time consuming and costly, but ultimately avoidable, when you plan ahead.
A will or trust, powers of attorney, and advance health care directives work together to protect you if you become disabled and ensure your estate is distributed according to your wishes when you die. Absolutely everyone needs to have these documents prepared once they reach the age of 18 in South Carolina. It is never too soon to start, but it is often too late.
2. Failing to Designate Beneficiaries
Naming beneficiaries is critical for many assets, including retirement accounts, life insurance policies, and transfer-on-death accounts. These types of assets can pass outside of the probate procedure if you have worked with the company to establish the correct beneficiaries. This step is sometimes missed, often when it is set up through your employer during the onboarding process. If you forget to add or update your beneficiary designations, the funds may be paid to your estate and become subject to the probate process. From a timing perspective, this means your loved ones might wait months or even years and incur additional legal costs to access accounts you intended to pass directly to them. It also subjects the funds to creditor’s claims of the estate. Finally, the addition of those funds will increase the gross value of the probate estate, and in turn, increase the probate fees of the estate, since those are assessed based on the gross value of the probate estate.
3. Failing to Properly Title Assets
Preparing estate planning documents isn’t enough if your assets are not also properly titled. Depending on the types of assets you have, you will find that they are subject to different administrative procedures when you die. Jointly held assets will fall to the surviving owner and beneficiary designations will be transferred to the beneficiary, while other assets in your personal name will be subject to the probate process, unless retitled into a trust you have created.
Remember, a trust only works for assets you actually transfer into it while you’re alive. For example, simply signing a revocable trust document doesn’t avoid probate. You must retitle property and accounts in the name of the trust in order for the trust document to control them. An unfunded trust can be just as useless as having no trust at all.
4. Not Preparing a Will With Your Trust
Just because you prepare a Trust does not mean you do not need a Will. When using a Trust as part of your estate plan, it’s very important to also execute a Will. This Will should direct that the Trust is the devisee of any asset that must be probated. We call this type of Will a “Pour Over Will,” and it is essential to estate planning with Trusts.
4. Not Choosing a Backup Fiduciary
You must name fiduciaries, such as a personal representative (executor) under your Will, trustee under your Trust, agent under your power of attorney, and health care proxy, to carry out your wishes. But life happens: people move, become ill, or predecease you. Always name contingent or backup fiduciaries if possible so someone you trust steps in if the primary person can’t serve.
5. Failing to Give Your Personal Representative Enough Powers
A common mistake is not granting enough authority in your estate planning documents. South Carolina law forbids a personal representative to sell real property in an estate without that power specifically granted in their Will or permission from the Court. Most South Carolina practitioners will include this power for that reason, however, clients relocating to South Carolina may have estate plans that do not grant this power. Without adequate powers, your personal representative may need to petition the Court for approval to take seemingly routine estate administration steps like selling real estate.
6. Improper Execution of Documents
South Carolina has strict rules for signing and witnessing wills, trusts, and other estate documents. A will that isn’t properly witnessed and executed may be declared invalid by a probate judge, forcing the court to distribute your assets according to intestacy laws, regardless of your intentions. For example, a South Carolina will must be typed, signed by a testator who is over the age of 18 and of sound mind, and witnessed by two disinterested witnesses, followed by a self-proving affidavit.
7. Losing Your Original Documents
I cannot stress enough the importance of keeping your original estate planning documents in a safe place where your personal representative or agent can easily find them when the time comes to use them. The original signed documents are required at a number of junctures, including to admit a will to probate or record a power of attorney with the Register of Deeds. If your loved ones can’t find the originals, they may face delays and added legal fees to validate copies or obtain replacements. It some cases, they may be completely useless.
8. Leaving Out Your Pet
Pets are family, too. They depend on us and require time, effort, and money to maintain them comfortably. However, in South Carolina, they are legally defined as property. However, many people overlook their pets in their estate plan. Without instructions or provisions for a caregiver and funding for their care, your pet could end up in a shelter or with someone unprepared to care for them. You can, and likely should, consider the logistics of who will care for them, what instructions the caregiver will need, what kind of funding the caregiver will need through the remainder of the pet’s life, whether the caretaker should be compensated, and more. Because of this, pet trusts are a growing request in South Carolina and an important addition to many estate plans.
9. Failing to Account for All of Your Assets
Estate planning isn’t just about big items like homes or bank accounts, it includes digital assets, vehicles, business interests, personal property, and even collectibles. Missed assets might end up passing through probate and may require additional legal steps for your heirs, increasing costs and delays. It is imperative to inventory all accounts, properties, and entities regularly and update your plan as your holdings change.
10. Not Hiring a Counselor Who Will Ask the Right Questions
Perhaps the biggest mistake we see is a client choosing the wrong counsel or no counsel at all. Inexpensive online templates without personalized legal guidance can subject clients to a myriad of problems at incapacity and death. Estate planning requires careful attention to statutory requirements, tax implications, your family dynamics, and potential pitfalls unique to you and your assets.
An experienced estate planning attorney will ask the right questions to uncover issues you didn’t even know to consider, from second marriages and blended families to business interests and special-needs beneficiaries.
If you want a trusted professional who knows South Carolina estate planning law and will guide you through every step, please contact us. With the right plan in place, you can have peace of mind knowing your wishes are clear, your loved ones are protected, and your legacy is secure.
If you are in need of assistance, the attorneys at Collins Family & Elder Law Group can help.
