How to Disinherit a Spouse in South Carolina Through Elective Share Waiver (Or: Pillow Talk Is Not Enforceable)
A lady came to our offices for help with her estate plan which included setting up a new trust to hold her assets. She planned to leave everything to her kids and nothing to her husband, which she said her husband had agreed to. He never signed anything on paper to that effect, but she insisted that he was okay with the arrangement.
Literally the following week, she died. Her husband then filed for elective share, which is the portion of a deceased person’s estate that a surviving spouse is entitled to by law. There was nothing barring the husband from receiving a portion of his wife’s estate, despite her wishes.
What could the wife have done differently?
Below we’ll look at elective share and how to disinherit a spouse in South Carolina.
Elective Share in South Carolina
A surviving spouse is entitled to a portion of the deceased spouse’s estate under the law regardless of the terms of the deceased spouse’s will. This portion is called the elective share, or spousal elective share. The portion the surviving spouse can claim varies by state; in South Carolina, it’s one third.
The surviving spouse may claim elective share even if the couple was estranged or in divorce proceedings at the time at the time of death. We previously covered a case on this blog in which a surviving spouse was able to claim elective share after the court granted the couple’s divorce, since the husband happened to die in between the court’s decision and the clerk filing and recording the divorce decree. [Read about that case, Hatchell-Freeman v. Freeman (2000) here.]
What the Surviving Spouse is Entitled To
In South Carolina, the surviving spouse is entitled to one third of the deceased spouse’s estate. This third includes assets that are not subject to probate, such as life insurance proceeds, retirement accounts, property owned jointly with right of survivorship, and assets in revocable trusts. The value of these and other interests due to the surviving spouse count towards the elective share first, along with the value of anything that was renounced or disclaimed. Only then is the balance due taken from the probate estate.
Claiming elective share usually means a surviving spouse will inherit assets that would otherwise have gone to other heirs named in the deceased spouse’s will. Because of this, the surviving spouse has a duty under South Carolina code Section 62-2-205(b) to inform recipients of the probate estate whose interests are adversely affected of the time and date of the hearing set to determine elective share.
Disinheriting a Spouse in South Carolina: A WRITTEN Waiver of Elective Share
The laws regarding elective share ensure that a spouse is not easily disinherited.
But an individual can fully disinherit a spouse in South Carolina. This may happen, for example, in blended families when each spouse wants to leave their assets to their own children and knows that the other spouse is financially secure. Or an individual may wish to disinherit a spouse because of estrangement or separation.
Whatever the reason, it’s important to know that drawing up a will or creating an estate plan that intentionally leaves out the spouse is not enough. The couple must take active steps to disinherit a spouse in South Carolina.
Written Waiver of Elective Share
A spouse may voluntarily agree to give up all or part of their elective share. The spouse who is to be disinherited must agree to waive the right to elective share in writing. Such a waiver is often part of a prenuptial or postnuptial agreement but may be a standalone document.
The spouse waiving their right to elective share in whole or in part must be fully aware of what they are giving up. South Carolina code Section 62-2-204 requires that the disinheriting spouse provide “fair and reasonable” disclosures of their property and financial obligations in writing to the waiving spouse.
Schedule a Free Consultation with Estate Planning Attorney Gem McDowell
For legal help and advice on waiver of elective share, prenuptial or postnuptial agreements, probate, or other estate planning concerns, call Gem McDowell of the Gem McDowell Law Group of Mt. Pleasant and Myrtle Beach. Gem and his team help families in the greater Charleston and Myrtle Beach areas create and review estate plans to help ensure their wishes are carried out.
Gem can also help you understand the consequences and potential downsides of your estate plan. Sometimes estate plans created with the best of intentions can lead to unintended consequences, disputes, and fractured relationships between family members and heirs.
If you have a complicated family situation, a large estate, or you simply want a basic estate plan put in place for your peace of mind, call Gem and his team today at 843-284-1021.
What is Family Malpractice™, and Have You Committed It?
Have you committed Family Malpractice™?
If you’ve neglected your legal responsibilities regarding your family, then yes, you have.
What is Family Malpractice™?
You’ve heard of attorney malpractice, where an attorney’s misconduct causes problems for a client, and you’ve heard of medical malpractice, where a doctor’s error or negligence causes problems for a patient. Similarly, Family Malpractice™ is when an individual causes problems for his/her family members, usually because of failure to take action on a legal matter.
Problems that are created can be legal, financial, and/or familial in nature. I’ve seen a decedent’s heirs have to go through years of expensive and stressful legal battles over how to divide up assets. I’ve seen people take a huge financial hit because of how property was handled after the owner’s death. I’ve seen families torn apart and relationships permanently ruined due to Family Malpractice™.
While it’s not something you can be prosecuted for, Family Malpractice™ is something to avoid. You can easily do so by knowing some of the common pitfalls that put your family in peril legally and financially, and how to avoid these easily avoidable situations yourself.
When You Have Children but Have No Will, That’s Family Malpractice™
Do you know what happens in South Carolina if you die without a will, leaving behind a spouse and children? When I ask this question in consultations or at live, in-person seminars, most people believe that 100% of the deceased’s probate estate goes to the spouse. This is incorrect. By state statute, the deceased’s probate estate is divided evenly between the spouse, who gets 50%, and the children, who share the remaining 50% among themselves.
This sounds reasonable and fair. But, as straightforward as it sounds, this simple arrangement can cause a lot of problems, usually for the spouse. For instance, if a husband and father dies intestate (without a will), his half of the house is divided equally between his surviving wife and children. So his wife now owns 75% of the house and the children own the other 25%. If she’s not able to keep up with the house payments and wants to downsize, she can’t sell unless her children agree. They then have leverage and can demand more than the 25% of the sales price of the home, or else simply refuse to sell.
Who would do this to their own mother, you ask? Plenty of people, unfortunately. I’ve seen scenarios like these play out many times in my 30+ years of being an attorney. Situations like these can ruin a person financially in their later years and destroy family relationships irrevocably.
The situation becomes even more complicated in blended families where one or both spouses have children from a previous marriage. Imagine then, the surviving spouse may own 75% of the house and the children from a previous marriage own the other 25%. The children from the previous marriage are not required to cooperate with the surviving spouse. They can veto a sale, refinance, etc. They essentially control the property. That is not what the decedent wanted, and that decedent committed Family Malpractice™ with regards to the surviving spouse.
In short, the way an estate is passed along and divided up according to South Carolina law may not be what an individual wants, but if they die intestate, they don’t get a choice – and their heirs have to live with the consequences.
The solution: Have a will drawn up. This is vital if you have a family and especially if you have anything other than a small estate. Dying without a will can potentially create a lot of problems for your heirs that could have been avoided with a current estate plan.
When You Don’t Probate Your Deceased Mom or Dad’s Estate, That’s Family Malpractice™
The idea of a family home being passed down from generation to generation is something many people aspire to. Passing on wealth in the form of real property to your children, and to their children in turn, and so on, is a wonderful gift.
At least, it can be. It’s not uncommon for property passed on after death to become “heirs property,” which can cause a lot of problems for the heirs. This can happen when the surviving children of the original, now-deceased homeowner continue to live in the home but don’t go through the proper legal process to put the property in the new owners’ names. That is going through the probate process. If the same situation repeats for a few generations in a row, you can end up with literally dozens of people (typically, the grandchildren or great-grandchildren of the original owner) who all have legal claims to the property, all while the property is still technically in the original owner’s name.
Why is this such a problem? Because it’s very difficult to sell a house like this, when there are so many owners and a cloudy title. A buyer interested in the property risks having the deal fall through if one of the many owners decides they want more than their proportional share of the sales price or refuses to sell altogether. Getting the title cleared takes extra time and money. Meanwhile, the family members who own the house cannot sell and take the equity in the house, and they may be barred from accessing things that require clear title of ownership, like mortgages, loans, and government programs.
The solution: Ensure your deceased parent’s estate goes through probate. The probate process does not happen automatically; it’s something the executor named in the will must carry out. If there is no will, the probate court names an executor, usually a child or close relative of the deceased.
There are a few roadblocks keeping people from ensuring a deceased parent’s estate goes through probate. One is simply not knowing that it’s needed; they may incorrectly assume that the ownership of the house legally passes from the parent to the child(ren) without having to do anything. Another reason is an aversion to having to pay a lot to probate the estate. But in SC, probate fees are not very high. For instance, probate fees on an estate worth $1 million is just $1,845, which is paid out of the estate, as are attorney’s fees. Finally, some people want to avoid dealing with the government altogether. While this may be understandable, it’s not a good reason to avoid probate. Working with an experienced probate attorney you trust can help you and ensure that your estate is handled legally and fairly.
Read more about probate here on our blog.
When You Don’t Take the 1014(e) Step-Up in Basis, That’s Family Malpractice™
A step-up in basis occurs when the cost basis of an asset, like a home, is adjusted from the original cost basis to the current fair market value upon the death of the owner.
Let’s say your parents bought a house 20 years ago for $150,000, and when you inherited it upon their deaths, it was worth $350,000. If you don’t take the step-up in basis and proceed to sell it, you’ll have to pay capital gains tax on the difference, which is $200,000. If instead you do take the step-up in basis, and have the cost basis of the house increased to $350,000 (the fair market value at the time of your parents’ deaths), then you’ll only pay capital gains tax on the difference between $350,000 and whatever you sell it for in the future.
Depending on the value of the house, and how much that value has grown over time, that can mean saving a lot of money in taxes. When someone does not take this step-up in basis, it can lead to very large tax bills when the time comes to sell the property. There are a few reasons a person may fail to do so; they may not even know that the option exists, or they may mistakenly assume that it happens automatically.
The solution: Take the step-up in basis on property in an estate that you are executor of, or ensure that the executor of your parents’ estate does so. The probate attorney handling the estate can help you. As a probate attorney, my goal is to get the largest step-up in basis possible for my clients in order to reduce their tax liability in the future.
Work with Estate Planning Attorney Gem McDowell
Wills, probate, and step-up in basis are things that most people don’t think about because it’s outside the scope of daily life. But failing to take care of these matters is what I call Family Malpractice™, and it can lead to major legal and financial hassles in the future. Even more devastating, it can cause rifts between family members as they fight over assets in and out of court. Fortunately, these issues are completely avoidable. Work with an estate planning attorney and probate attorney to ensure your estate plan is solid and current and that you’re handling your deceased relatives’ estates correctly.
If you have questions about creating or revising your own estate plan in South Carolina, or you want advice or assistance handling the estate of a deceased relative, contact Gem McDowell at the Gem McDowell Law Group today. Gem has over 30 years of experience as an attorney and has helped countless families in South Carolina create estate plans, avoid mistakes, and fix problems. He and his team can help you understand and avoid committing Family Malpractice™ that can harm your family. Call him at his Mount Pleasant office today at 843-284-1021 to schedule a free consultation.
9 Reasons You Need a Will
We all know we “should” have a will. But why, exactly? Here are 9 good reasons to have a will.
1 To Maintain Good Family Relations After You Die
The main reason to have a will is for your family. After you pass, what happens to your assets won’t matter to you, but it will matter a lot to those who survive you. Many families have been torn apart by squabbles over an estate. Family members may spend years in court, and untold money, to get what they think they’re due. Meanwhile, those relationships fall apart. This doesn’t just happen after the death of people with large estates, but those with modest estates, too. A clear, current will can prevent many of these squabbles from happening in the first place and maintain the peace.
In short, you don’t get a will for yourself. You do it for your family.
2 To Ensure Your Assets Go to a Particular Individual
The primary purpose of a will is to determine where your assets will go after your death. If you don’t decide, and die intestate (i.e., without a will), the state will decide for you. In South Carolina, if you die without a will, your assets that are subject to probate will pass to your children, your spouse, your parents, and/or your siblings, depending on your family situation. You may not want your assets to go where the state wants them to go. Having a will lets you decide.
3 To Prevent Your Assets from Going to a Particular Individual
Just as your will allows you to ensure assets are going to the individuals you want them to go to, it also allows you to keep assets from individuals you don’t want to inherit anything through your will.
There may be several reasons for doing this. Perhaps you choose not to leave anything to an individual in your will because they’ll receive other assets directly outside of your will, such as life insurance payouts, pensions, retirement accounts, real property held as joint tenancy with right of survivorship, and assets held in trust of which they are the beneficiary.
Perhaps you and your spouse have mutually agreed to leave all of your property to your children rather than each other, especially if this is not your first marriage and there are children from previous partners. (Read more about estate planning in “Brady Bunch Marriages” here.)
Other times, you may choose to disinherit a child or other dependent because of strained familial relations. This is your choice, and a legally binding document will help ensure your wishes are carried out after your death.
4 To Make One Last Donation
So far, we’ve considered how a will can help you divide assets among surviving family members. But a will allows you to leave assets to organizations, too. If you’ve supported a particular cause, charity, or church during your lifetime, you can use your will to leave one final gift. (And depending on the size of your estate, a qualified donation can help reduce taxes, too.)
5 To Appoint a Guardian of Your Minor Children
If you’re the parent of a minor child, you should have a will in order to name your child’s guardian. This is the person who would take physical custody and care of your child after you die. (This assumes that there’s not another parent who would take custody.) If you don’t decide, then the state will, and it may choose someone you don’t want raising your child.
6 To Choose Your Executor
Similarly, the court will appoint an executor or personal representative to administer your estate after you die if you don’t name one in your will. You want to choose someone competent, trustworthy, and fair to settle your estate. It’s also a smart idea to speak with this person first to get their agreement, and to list alternatives in case your first choice is unavailable or declines the position after you’re gone.
7 To Speed Up the Process
Having a will can shorten the time it takes to settle your estate for the simple fact that it’s clear what should happen to your assets. Dying without a will invites family arguments over who should get what, and these arguments can last years and ruin relationship. (See #1.)
8 To Avoid Probate Altogether
What if all your assets are in trusts, so that when you die you have no assets to your name that are subject to probate? You should still have a will, specifically what’s known as a “pour-over will.” This dictates that any assets that are not in trust at the time of your death are to be distributed to the trust. If you don’t have a pour-over will, the assets still in your name when you die that are subject to probate will go through probate.
Learn more about the probate process here in South Carolina.
9 To Minimize Estate Taxes
Smart estate planning can reduce your estate taxes. However, this is not a big concern for most people. The only people who need to take into account estate taxes when drawing up a will are people with very large estates (worth over $11,180,000, as of 2018, or double that for married couples) and people in states that impose estate tax.
If you’re in this situation, you may want more than a simple will, and should speak with an estate planning attorney about your options.
Draft or Review Your Will with Mt. Pleasant Estate Planning Attorney Gem McDowell
If you don’t have a will, hopefully the nine reasons above convinced you that you need one. Call Gem McDowell at his Mt. Pleasant office to schedule a free consultation so you can get started on your estate plan right away. Gem has over 25 years of experience in estate planning, and he’s helped individuals with estates large and small with the planning they need. Call (843) 284-1021 or use this contact form to get in touch today.
Should Your Estate Go Through Probate? Why or Why Not?
Last time we cleared up confusion around probate in South Carolina and looked at what probate is and isn’t.
If there’s one thing people do know about probate, it’s that they want to avoid it when the time comes. But is that really the best advice for everyone? Let’s look at the common reasons why people work to avoid probate, and why it may not be worth the effort to avoid probate after all.
Avoiding The Cost Of Probate
By avoiding probate, you avoid the associated costs. In South Carolina, the cost of probate as of 2017 is:
$1,845 for the first $1,000,000
$2,500 for every $1,000,000 thereafter
For an estate worth $2 million, for example, the total cost of probate would be $4,345, while an estate worth $10 million would have a fee of $24,345. Many people choose to avoid probate to skip paying these fees.
What to consider: Keep in mind that it can be costly to set up an estate plan that keeps assets out of probate in the first place. For smaller estates, it may not be worth it.
Maintaining Privacy
When a will is filed with the probate court, it becomes a public document. In contrast, the details of an estate handled through a trust do not become public.
What to consider: Most people do not need to worry about this. Public figures facing curiosity and business owners wanting to keep company financial info private may have a valid reason for concern, but for most people this is a non-issue.
Making Disbursements To The Heirs More Quickly
Making sure heirs get their inheritances more quickly is another reason people choose to avoid probate. Theoretically, the trustee of a living trust can begin disbursements to heirs immediately upon death. In practice, trustees will ensure that the estate’s debts and taxes are paid before disbursing money to heirs. Whether this actually means beneficiaries get their money more quickly depends on the situation.
What to consider: Estates passing outside probate are subject to creditors’ claims for three years compared to just eight months given to creditors through the probate process. This increases the chance that a creditor will make a claim after disbursements have been paid out from the trust, which can lead to lawsuits against the trustee and/or beneficiaries. The shortened time creditors have to make a claim is an advantage of going through probate.
Is Your Estate Set Up To Pass Through Probate or Avoid Probate?
Estate planning is complex. Laws change and family situations change, making old estate plans obsolete or imprudent. It’s difficult to know the long-reaching consequences of estate planning unless you speak with an experienced estate planning attorney like Gem McDowell of Gem McDowell Law Group. He don’t just provide wills and trusts, but the insight and advice from years of experience on the real-world consequences of estate plans. Call Gem today at their Mount Pleasant office at (843) 284-1021 or use this contact form to set up a consultation.
Clearing Up Confusion About Probate in South Carolina
Updated 11/27/2022
For some people, “probate” is a dirty word. Much of this attitude comes from not understanding the process, so let’s clear up the confusion.
What Probate Is and What Probate Isn’t
There are some myths out there about probate, so here’s what it’s not: Probate is not a way for the government to take the estate of someone who dies without a will. Probate is not a way to avoid any applicable estate taxes. Probate does not take many years (except in rare cases).
Probate is simply a process, overseen by the court, in which a person’s estate is settled. It’s a way for ownership of assets to be transferred from the decedent to other people and for final taxes and debts to be paid.
For an estate to go through probate, no estate planning is required. A person’s estate can pass through probate whether they died without a will or with one, as long as it has assets that are subject to the process.
For an estate to avoid probate, the deceased must own no assets subject to probate at the time of death. A common way to do this is to put all those assets in a living trust (an inter vivos trust), which stays in someone’s name and control during their lifetime and immediately passes to the named successor trustee upon death. The assets owned by the trust are not subject to probate.
What’s subject to probate and what’s not?
Assets subject to probate in SC include:
- Real estate held as a tenant in common
- Property owned solely in the deceased’s name
- Interest in a partnership, corporation, or LLC
Assets not subject to probate in SC include:
- Real estate held as a joint tenancy with right of surviorship
- Retirement accounts with named beneficiary
- Insurance accounts with named beneficiary
- Pension plan distributions
- Assets held in a trust
- Assets that are payable-on-death or transfer-on-death
Now that we know what probate is and isn’t, let’s look at the process.
The Probate Process in South Carolina
The probate process consists of a series of steps:
1. Deliver the will at death. Someone in possession of the deceased’s will must deliver it within 30 days to the judge of the probate court, or to the personal representative named in the will, who will then deliver it to the judge.
2. Personal representative is appointed. This person is typically named in the will and is officially appointed by the court.
3. Notice to intestate heirs is sent. Heirs can contest if they aren’t named or are treated differently.
4. Inventory and appraisement of the estate. This must be filed within 90 days of the opening of the estate. Professional appraisers may be needed to provide the values at the date of death for assets like homes, art, and jewelry.
5. Final accounting. This involves paying applicable taxes, outstanding debts, and ongoing expenses while settling the estate, such as legal and accounting fees. If there’s not enough money in the estate to pay all debts owed, creditors will be paid in order of priority according to South Carolina code (as described in Section 62-3-805).
6. Disbursements. If there’s money left over after debts and taxes are paid, distributions may finally be made to the heirs according to the will, or, if there is no will, according to the state.
7. Close the estate. The personal representative files a number of documents with the court after the above steps have been completed, and the estate is finally closed when the court issues a Certificate of Discharge.
Probate Fees in South Carolina
An estate going through probate is subject to probate fees as laid out in South Carolina Code Section 8-21-770. Fees are based on the gross value of the decedent’s probate estate and are set/calculated as follows:
| Gross Value of Probate Estate | Fees |
| Less than $5,000 | $25.00 |
| $5,000-$20,000 | $45.00 |
| $20,000.00-$60,000 | $67.50 |
| $60,000.00-$100,000.00 | $95.00 |
| $100,000.00-$600,000.00 | $95.00 plus 0.15% of the property valuation between $100,000 and $600,000 |
| $600,000 or higher | $95.00 plus 0.15% of the property valuation between $100,000 and $600,000 plus ¼ of 1% (0.25%) of property valuation above $600,000
= $845 plus ¼ of 1% (0.25%) of property valuation above $600,000 |
Here’s a table with sample probate fees calculated based on the value of the estate:
| Gross Value of Probate Estate | Fees |
| $150,000 | $170.00
$95.00+(0.0015*($150,000-$100,000)) = $95.00+$75.00 = $170.00 |
| $300,000 | $395.00
$95.00+(0.0015*($300,000-$100,000)) = $95.00+$300.00 = $395.00 |
| $500,000 | $695.00
$95.00+(0.0015*($500,000-$100,000)) = $95.00+$600.00 = $695.00 |
| $750,000 | $1,220.00
$845+(0.0025*($750,000-$600,000)) = $845+$375 = $1,220 |
| $1,000,000.00 | $1,845.00
$845+(0.0025*($1,000,000-$600,000)) = $845+$1,000 = $1,845 |
| $3,000,000 | $6,845.00
$845+(0.0025*($3,000,000-$600,000)) = $845+$6,000 = $6,845 |
| $10,000,000 | $24,345.00
$845+(0.0025*($10,000,000-$600,000)) = $845+$23,500 = $24,345 |
How Long Does Probate Take in South Carolina?
How long it takes an estate to go through the probate process depends on a number of things, including:
- Whether the deceased had a valid will or not
- How large and complex the estate is
- Whether the will is contested
- Whether lawsuits are filed
- How efficient the personal representative is
Under good conditions, a relatively simple estate can take approximately a year from open to close. More complex cases will take longer.
(Note that “small estates,” which contain no real property and total less than $25,000 in value, may qualify for a summary administrative procedure, a quicker and cheaper process than the regular probate process. A small estate can be settled in a matter of a few days or weeks.)
Is It a Good Idea to Avoid Probate?
Now that you know more about probate in South Carolina, you may be wondering whether it’s smart to approach estate planning with the intent of avoiding probate altogether. There are many things to consider, so that’s the subject of the next blog.
For help with your estate plan, contact Gem McDowell Law Group in Mount Pleasant. Contact Gem today at (843) 284-1021 to set up a consultation.
