The estate plans of some South Carolina residents may be affected by a rule that has passed the U.S. House of Representatives and which is likely the pass the Senate unanimously. The Setting Every Community Up for Retirement Enhancement Act will require most beneficiaries to withdraw the entire amount of an IRA within 10 years of the owner's death. The previous rule offered significant tax savings to beneficiaries by allowing them to take distributions over a much longer period of time.
A trust may be a better choice than a will for some South Carolina residents. It can offer a number of advantages over a will, including more privacy since a trust does not have to go through probate. A trust can protect an estate from taxes, provide charitable contributions and protect assets from an irresponsible beneficiary as well as from creditors and divorce. A trust can provide for a spouse but ensure that children receive assets if the spouse remarries. It can allow assets to be left for a beneficiary with special needs without affecting that beneficiary's receipt of government benefits.
While it may seem like a minor step, it can be important for those in South Carolina with an IRA to name a beneficiary. Failing to name a beneficiary could result in a lot of stress and lost money for surviving family members. The same could be true if a person fails to update the beneficiary designation. There are many questions that an account holder should ask prior to deciding who will be the beneficiary.
People in South Carolina should make sure that they review their estate plans every few years. They should also reexamine their plans if they experience a significant life event, such as a divorce.