No one wants to think about passing away, but people may choose to make arrangements for their estate after their passing. An estate is all of the money and property you own. If you do not make arrangements for your estate before your passing, you have died intestate and the state has set out laws on how to disperse property when someone passes away intestate.
Who can inherit estates and assets? The decedent’s heirs, or persons entitled to inherit the decedent’s property after their passing. Heirs can be named in a descendant’s will or, if the decedent does not have a will, the line of heirs follows the defendant’s family as determined by South Carolina intestate laws. For an heir to be eligible to inherit assets, the heir must have been born while the decedent was still alive. An heir does not have to be a blood relative but can be a spouse or an adopted child. However, if a decedent has a child who was adopted by someone else and the decedent had no legal rights or obligations to the child, then the child has no right to inherit from the decedent. The line of heirs is as follows:
1. Spouse but no descendants – spouse inherits everything
2. Descendants but no spouse – descendants inherit everything, and assets are split evenly between the descendants
3. Spouse and descendants – spouse inherits half of the assets and descendants inherit half of the assets, and that half is split evenly between the descendants
4. Parents but no spouse or descendants – parents inherit everything
5. Siblings but no spouse, descendants, or parents – siblings inherit everything
6. Descendants include children, grandchildren, and great-grandchildren. If there are no living descendants, parents, spouses, or siblings, property may transfer to more distant relatives such as cousins or nieces and nephews. As long as there is a living heir, the property will not transfer to the state.
In South Carolina, there is no inheritance tax or an estate tax so, when someone passes with or without a will, their heirs will not have to pay a tax to the state on their inheritance. What is the difference between an estate tax and an inheritance tax? When the taxes are taken out. Estate taxes are taken directly out of the deceased’s estate after they pass. Inheritance taxes, however, are taken out of the inheritance that each heir receives, meaning that the individual heir is responsible for the taxes and not the estate as a whole. However, even if you are living in South Carolina, if you inherit from someone who lives in a state that does apply an inheritance tax, you will be responsible for the taxes. Another important note is that South Carolina does not tax gifts, however, remember that there is a federal tax once someone gifts more than $16,000 in a calendar year.
What assets will be affected by intestate succession laws? Those assets would have been included in a will. These assets are generally only those that are solely in the deceased’s name. Assets that are not affected by intestate succession laws include property transferred in a living trust, retirement account funds, and life insurance payments, along with property that is co-owned or had a named beneficiary.
To get started on your estate planning journey, contact King Law Offices at 888-748-KING (5464). Our knowledgeable team is here to assist you every step of the way, ensuring that your estate plan reflects your wishes and provides peace of mind for you and your loved ones.