Category: Estate Planning

If you’re meeting with a South Carolina estate planning attorney, power of attorney will be at the forefront of the conversation. Though power of attorney is sometimes referenced in legal dramas on TV, it is rarely explained. This is your in-depth guide to the importance of power of attorney in estate planning.

The Purpose and Benefits of Power of Attorney

Consider a scenario in which your mother or father becomes incapacitated. Your parent is incapable of speaking and moving beyond slight hand gestures. A healthcare power of attorney is invaluable in such a situation. This legal tool empowers you to make health-related decisions on behalf of your incapacitated parent.

Power of attorney is also applicable to asset management. Such a financial power of attorney empowers a trusted family member or other individual to make financial decisions on behalf of yourself in the event that you become incapable of doing so. Illness, injury, or another unforeseen event, such as dementia, has the potential to prevent you from thinking and acting clearly. 

A South Carolina estate planning attorney will establish power of attorney on your behalf so you can live the rest of your life in full confidence, knowing a trusted family member or friend will make sound decisions on your behalf.

The Role of the Agent

The signature on a durable power of attorney authorizes an individual other than yourself to serve as agent. Also referred to as attorneys-in-fact, such agents act on one’s behalf to complete specific acts. Such an agent manages your affairs in the event of incompetence, ultimately preventing the need for a potentially expensive and complicated trust or guardianship. 

In short, assigning an agent to handle your affairs through a power of attorney makes it easier for trusted people to make life easier and more comfortable in your final years. In some instances, spouses provide one another with power of attorney. Others choose their children, grandchildren, or trusted neighbors to act as agents. 

When selecting a power of attorney agent, do not automatically choose your oldest son or daughter. Rather, it is better to select an individual with the intellect, time, and maturity necessary to handle your affairs exactly as you desire.

The Limits to Power of Attorney

A person with power of attorney over another’s bank account does not have full financial control over that person’s money. Rather, such a power of attorney provides authorization to write checks and pay bills yet not sell real property such as a house. However, if you trust your power of attorney agent to handle your real property on your behalf, our estate planning attorney can assign him or her the power to sell real estate.

Learn More During a Consultation With Our South Carolina Estate Planning Attorneys

If you don’t have an estate plan or haven’t updated yours in years, be proactive. Our legal team will do all the work on your behalf. Contact our South Carolina estate planning attorneys today to schedule an estate planning consultation.

Estate planning is essential for everyone, regardless of their family situation or financial means. Having an estate plan ensures that your wishes are carried out. However, it also protects your assets and provides for your loved ones. Our South Carolina estate planning attorneys discuss why estate planning is important in this guide.

Understanding the Basics of Estate Planning

At the heart of estate planning is financial management. It is the process of arranging for the distribution of your assets after your death by allowing you to designate beneficiaries and heirs. However, estate planning encompasses much more.

A comprehensive estate plan includes incapacitation planning, asset protection, and tax planning. An estate plan allows you to provide for loved ones with special needs without jeopardizing their government benefits. You can include charitable giving and provide for minor heirs in your estate plan.

The basic estate planning documents you should discuss with an attorney include:

• Last Will and Testament
• Living Will
• Durable Power of Attorney
• Trust Agreements
• Health Care Power of Attorney

Your estate plan outlines your wishes. It also gives you the power to decide what happens to your property after your death or incapacitation. Ideally, your estate plan should coordinate with your retirement plan for maximum asset protection and financial management.

The Role of Estate Planning in Protecting Your Property

In addition to minimizing taxes, an estate plan can protect your property from creditors and lawsuits. When constructed correctly, an estate plan can keep your assets within your immediate family, including protecting your wealth from in-laws and ex-spouses. It can protect your assets from bankruptcy, including the bankruptcy of an heir. Using trusts and other estate planning tools can protect assets and ensure the smooth transition of property after your death.

The Role of Estate Planning in Protecting Your Loved Ones

Estate planning benefits your loved ones in numerous ways. Having an estate plan can:

• Avoid probate for your family
• Reduce tax liability
• Asset protection
• Pass assets to beneficiaries outside of your family
• Set up trusts for loved ones with special needs
• Provide clear directions for guardianships and trusts for minors
• Preserve generational wealth

Proper planning reduces the stress and costs of dealing with an estate. It also takes the decisions off your family’s shoulders so they do not need to make tough decisions about end-of-life care.

Estate Planning Reduces Family Conflicts

Your estate plan clearly explains your wishes for distributing your wealth after your death. Your loved ones do not need to guess what you want. An estate plan reduces arguments between family members. If there are disputes, legally enforceable estate planning documents can resolve them according to your wishes.

The Consequences of Failing to Have an Estate Plan

If you do not have an estate plan, the South Carolina intestate laws govern your estate. The state decides who inherits your property and their shares of your estate. You cannot protect your assets from creditors and other parties without an estate plan. Furthermore, you do not have any plan in place for incapacitation, which means your loved ones may need to petition the court for the appointment of a conservator and guardian.

Why Professional Guidance Is Essential for Estate Planning

The role of professionals in estate planning is to provide guidance and expertise. An estate planning lawyer ensures that your legal documents are drafted according to the law and are executed correctly. Your attorney also ensures that your estate documents comply with the current law and accomplish what you intend to do with an estate plan.

However, attorneys are not the only professionals who have roles in estate planning. Financial advisors and tax lawyers help you maximize and manage your assets throughout your life and retirement. They also help ensure that you distribute assets to heirs in the most financially beneficial way.

Get the Help You Need: Work With a South Carolina Estate Planning Attorney

Estate planning protects your property and loved ones if you become incapacitated after your death. Contact our South Carolina estate planning attorney to schedule a consultation to discuss your estate plan. We will help you develop an estate plan that meets all your needs.

Although estate planning may seem daunting, it’s really about organizing your affairs and planning your financial future. By consulting an experienced estate planning attorney, you can avoid some common estate planning mistakes.

Common Estate Planning Mistakes

1. Not Having a Will 

A will is the most basic estate planning tool that establishes how your property will be managed and distributed to your heirs after you die. Additionally, a will is the only way to name a guardian of your minor children. If you and your spouse die simultaneously without naming a guardian, the court will intervene to name someone who may not share your values. Similarly, without a will, your assets will be distributed according to South Carolina’s laws of intestacy, which means that the wrong people may inherit your assets.

2. Not Updating a Will

If you have a will in place, you should know that it’s not a once and done situation. Instead, your will needs to be kept up-to-date with inevitable lifestyle changes, such as buying a home, starting a family, acquiring wealth, and retiring. A general rule of thumb is to revisit your estate plan every 2-to-3 years so that it reflects these and other events. It is also important to align your beneficiary designations on retirement plans and life insurance policies with your estate plan. 

3. Choosing Incapable Heirs

While we’d like to believe that our heirs are capable of managing an inheritance, some individuals lack financial skills, are spendthrifts or may have substance abuse or gambling problems. One way to protect an incapable heir from squandering an inheritance is to establish a spendthrift trust in which you designate a trustee to supervise the assets and make payments to the beneficiary according to the terms of the trust.

4. Appointing the Wrong Executor

It is common for estate planners to name a relative (e.g. a spouse, adult child) or trusted friend to act as the executor. If this person is not trustworthy or capable, however, the beneficiaries may challenge the appointment, which can become a lengthy and costly court battle. For this reason, it is critically important to select someone with the skills, judgment, and integrity to carry out the important duties of an executor.

5. Not Planning for Incapacity

A well-conceived estate plan will prepare you for the unexpected as well as the inevitable. In the event that you sustain an injury or an illness and become incapacitated, it is necessary to give powers of attorney to trusted individuals to manage your affairs and coordinate your medical care. By failing to create a durable power of attorney and a health care proxy, your loved ones will need to ask the court for permission to do so, which could lead to disputes and avoidable delays during an emergency. 

Avoid These Common Estate Planning Mistakes with Willcox, Buyck & Williams

In the end, the best way to avoid these common estate planning mistakes is to work with an experienced trust and estate lawyer. Your attorney can tailor a plan to your needs, prepare the foundational estate planning documents, and provide ongoing counsel to ensure your plan is up-to-date.