Estate Planning

When one believes his or her estate is in jeopardy because of an imminent prospect of placement in a long-term care nursing facility, improvident decisions are often made out of fear, or upon erroneous, but well intentioned advice. The costs of nursing home placement can be devastating to any estate, costing between $60,000 to $90,000 per year. So there is reason for concern,

A recent case in Ohio illustrates the dangers of gifting upon

Yes. And No. It depends on what you are trying to protect your assets from.

Does a Revocable Trust protect my estate against taxes? Not necessarily.

First, there are no South Carolina Estate taxes. Federal Estate Taxes are imposed only on larger estates (in 2009 that amount was $3,500,000. Congress will soon decide on a new level of estate taxation)(article amended 3/11/10). Estate taxes are a concern for a relative small segment of population (less than 1%) and only high net worth individuals need to engage in trust tax planning. It is unlikely that the average resident needs such "asset protection" from estate taxes. But married couples can, if they elect to do so, use specialized Living Trusts to shelter large amounts from taxes. But, A Revocable Living Trust is not

This is the most frequently asked estate planning questions I'm asked. Understandable, since so many clients in the area are from other states.

The standard answer sounds easy, but is not as simple as it seems.

The basic rule is: If a Will would be legal and valid in the state where it was signed, it is valid in SC. So, for the most part, just because you move to SC from another state you do NOT need another Will prepared.

But here's the rub...in order to know whether an out-of-state

There is no doubt that the REVOCABLE Living Trust (RLT) has wide ranging popularity in South Carolina.  The probate process can be onerous and expensive, and a REVOCABLE Living Trust is oftentimes (not ALL the time) the best way to avoid the probate process. But there is another type of trust that can provide the benefit of probate avoidance, and add an extra layer of protection to your assets- The IRREVOCABLE INCOME TRUST.

The best way to understand the IRREVOCABLE TRUST is to compare it against the REVOCABLE LIVING TRUST (RLT).

A frequent request from clients is “Can you please add my children to my Deed”.

Of course having updated and professionally prepared estate planning documents is important.  As important, and often overlooked, is choosing the right place to keep your signed Will located.   With Attorney- Some clients believe that keeping a Will in the drafting attorney’s office is required, or, is always the best location. This is not necessarily true. An attorney may offer to safekeep your Will but it is not required.  If the attorney does keep the original Will, a copy ought to be provided to the client. Attorneys (like clients) move, retire, and pass away unexpectedly. This can make tracking down a Will very difficult.                                                                 Read More Below

Lesson:  For Attorney- ask your clients about their health

               For client- tell your estate planning attorney about your health. 

The Supreme Court of South Carolina ruled that an attorney's failure to draft a will and arrange for its execution before a client's death does not give prospective beneficiaries of the will a cause of action for legal malpractice. Rydde v. Morris (S.C., No. 26619, March 23, 2009).

On Dec. 23, 2008 federal legislation was passed that changed the rules for required minimum distributions from traditional IRAs and 401(k) plans. Taxpayers over 70 1/2 are normally required to make annual withdrawals ( also know as distributions) from IRA accounts. IRAs are funded with untaxed earnings and, are allowed to grow tax deferred until a person reaches the age of 70 1/2.

NO MINIMUM WITHDRAWAL IS REQUIRED FOR 2009 TAX TEAR.

Folks, don't get too excited about this just because the law was passed before the beginning of tax season. If you didn't take your 2008 required minimum distribution, a tax penalty will be imposed. This law will only impact the 2009 tax year, and the return you file in 2010.

The initial purpose for encouraging use IRA accounts with untaxed  earnings, and allowing the account to grow tax deferred, was to have IRAs supplement other retirement income, NOT as a means of passing untaxed income on to heirs. The account holder is required to take the annual distributions of a certain percentage of the account into their income each year after age 70 1/2 . The rates of withdrawal are related to life expectancy tables. If the withdrawal rules are followed, the IRA is withdrawn before death of the taxpayers. Taxpayers who ignore the annual distribution requirement usually face a penalty in the form of a 50 percent excise tax on the amount they failed to properly take. These rules do not apply to defined benefit pension plans and Roth IRAs.