People in South Carolina who are creating an estate plan may want to include a number of documents. They may need a will, a power of attorney that appoints someone to make financial decisions on their behalf in case of incapacity, and a health care proxy or living will that outlines their desires for end-of-life care. This document can also appoint someone to make health care decisions.
While a will should be a part of every estate plan, not every estate plan needs a trust. Because the estate tax exemption is so high for 2020, the vast majority of people will not need a trust to avoid estate tax. However, a trust can have a number of uses and is not just for wealthy individuals. A trust may be used to protect assets for a minor child or from creditors. It can provide for a loved one who has special needs without affecting that person’s eligibility for benefits. A trust can also allow some control over how assets are distributed or spent by specifying when or for what reason payments can be made.
Trusts bypass probate and can be less costly to administer in some cases. They also allow for privacy that wills do not. They are more difficult to challenge than wills, and they can help preserve family wealth and values.
People who are creating an estate plan may want to talk to an attorney about what documents they might need and whether a trust would be appropriate. An attorney may be able to help ensure that documents are error-free and their instructions are clear and written in the correct legal language. An attorney may also help ensure that all elements of an estate plan are consistent. For example, beneficiary designations override wills or trusts, so they should be kept up to date.