By Irv Condon, Probate Judge for Charleston County and Dena Byrum, Judicial Law ClerkIntroductionProper estate planning involves a trust and a will, financial and health care powers of attorney, and advance directives like the five wishes, living will, cremation pre-authorization, etc.An attorney is needed for proper estate planning.What is a trust?A trust is when one person (a trustee) has legal title to certain property but manages that property for the benefit of another (the beneficiary) according to the terms of a trust agreement.A trust protector makes sure a trustee is acting properly.

Trusts are beneficial because trusts protect and safeguard assets for spendthrifts, minors, and incapacitated adults.You can have a revocable living trust, which is a separate entity established during your life, or you can create a trust in your will (testamentary trust) which takes effect at death.Most South Carolinians can use a testamentary trust (a trust in their will) to protect and safeguard assets for spendthrifts, minor children, or an incapacitated adult.Do I need a trust?Trusts often work well for the wealthy.

Rock legend, David Bowie, died in 2016 leaving an estate of approximately $100 million.Bowie was divorced and remarried, with one child from the prior marriage and one child from his wife at the time of his death.His will created a marital trust for his second wife, while leaving 25% of his estate outright to his older child and creating a trust for his minor child with the remaining 25% of his estate.

The terms of the marital trust agreement distributed whatever was left to his two children once his wife died.By creating the marital trust and the provisions for his children, Bowie wisely provided for his wife during her lifetime while ensuring that his two children received his assets after his wifes death.Not only the wealthy benefit from trusts, though.A trust can state the minor child receives one third at age 25, one third at 30, and the rest at 35 with invasion powers for medical and educational needs.

A special needs trust can protect assets and allow an incapacitated adult to still receive their government benefits.Pet trusts are used to protect financial resources to care for our pets.In Charleston, two dogs were left $900,00 and another a beach house with instructions for the pets care with the remainder at the pets passings to the SPCA.

Trust assets must be adequate to cover the costs of administration, particularly if a non-family member, such as a bank officer, is going to act as trustee because such trustees charge for their services.What Are the Types of Trusts?A living trust is created during an individuals lifetime, and property can be transferred into it immediately after creation.Benefits of a living trust are that the trust creator can decide which property to put into it throughout their lifetime, and the living trust manages the property during ones lifetime and acts as a will substitute at death which avoids the probate process.(A living trust and a living will are often confused.

A living trust deals with property whereas a living will or declaration of a desire for natural death relates to end-of-life decision making.)A testamentary trust is a trust in a will which takes effect at death.The purpose of a testamentary trust is to protect and manage the inheritance left to your minor children or incapacitated adults.A testamentary trust provides greater control over distribution of your assets and protects your family members who are spendthrifts.Do I Still Need a Will if I Create a Living Trust?Yes! Because of the risk of leaving some property outside of a living trust, many individuals include a pour over provision in their wills.

A pour over provision directs that all assets of the deceased pour into a trust at the time of death.Such a provision is the perfect backstop to a living trust, ensuring that all property goes to the trust as the creator intended.ConclusionWe all want to help and protect our loved ones and our pets, and a trust is a good way to do so.Most South Carolinians can use a testamentary trust (a trust in their will) to protect and safeguard assets for incapacitated adults and minors.

If you have substantial financial assets, then a living trust with a pour over will may serve you better.Also consider leaving assets in trust to care for your pets.Consult your estate planning attorney.

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