With more than 30 years in financial planning, Melissa D. Bane, senior private client adviser with Greenwood Capital Associates, says estate planning is one of the most ignored areas by people seeking advice on managing finances and capital.
"Nobody wants to talk about leaving this world or not being able to take care of themselves," Bane said. "But, when I'm doing financial planning with clients, estate planning is a part of it. You suggest things they might want to speak with an attorney about, such as drafting wills or trusts or for advice on charitable contributions."
Essentially, estate planning is deciding how you want your belongings distributed after you die.
This type of planning helps answer questions such as: Who gets your car? Who pays any outstanding bills on your behalf? Who takes care of your children?
If your financial situation is not complex, key legal documents for estate planning can be drafted for a modest cost and be pretty straight-forward, Bane said.
"But, we live in a society where there is lots of re-marriage and blended families," Bane said. "With that, the more important it is to have things laid out, to cut back on disagreements and miscommunications."
It's a good idea, Bane said, to share with family your wishes and to go over with them about wills, powers of attorney, advanced medical directives and other key documents.
John W. Cooper, a certified financial planner and private client advisor with Greenwood Capital, seconds talking with your adult children about your finances.
Cooper recommends giving them advanced notice of the discussion, easing into the topic, selecting a neutral location for the discussion and scheduling a followup meeting to address further questions.
"The first discussion does not have to be an in-depth laundry list of everything financial," Cooper wrote, in a series of talking points. "You can begin with the easy stuff - where you keep important documents, what types of insurance you have and what type of investment accounts you own and what investment firm helps you manage those accounts."
Most attorneys who work in estate planning recommend everyone have a will, a power of attorney and a healthcare power of attorney.
Other documents to consider when estate planning include, living wills or declarations of a desire for Natural Death, trusts and beneficiary designations on assets.
"Without these, your family will have a much harder time helping you when you can no longer care for yourself," Wade Cupcheck, an attorney with The Manning Law Firm in Greenwood, wrote via email.
It's a good idea, Cupcheck wrote, to consider estate planning if you are married, if you have kids, if you are thinking about having kids, or if you own a home.
"South Carolina will recognize a valid will from another state," Cupcheck said. "Because there are variations in local laws, it's a good idea to review documents if you are moving to another state.
"When you die, at the most basic level, a will names a personal representative, sometimes called an executor, to get your property in the right hands," Cupcheck wrote. "It directs your personal representative to pay any taxes or debts you may owe at the time of your death and it directs distribution of your assets to the beneficiaries you name."
These days, even things such as online accounts you have created for social media or through your bank, figure into estate planning. Assets that can be stored on a computer or accessed via Internet are called digital assets.
The South Carolina Uniform Fiduciary Access to Digital Assets Act, enacted in 2016, lets a user specifically name a person in their will, trust or power of attorney to access his or her digital accounts, if needed.
If you do not create a will, management and distribution of your assets will be handled by what's known as South Carolina intestacy succession laws.
"The Probate Court will appoint someone to handle your affairs and the law decides where your assets go," Cupcheck wrote. "Let's say you are a married homeowner in South Carolina and you have children. The home is in your name alone and accounts for most of your net worth. If you die without a will, the law says your estate goes 50 percent to your wife and 50 percent to your children, which means your home can be sold in order to achieve an even distribution. Having a will can help you avoid unfavorable outcomes."
Cupcheck said clients sometimes seek attorneys' services for drafting various types of powers of attorney - a general power of attorney and a health care power of attorney - for their children before those children go to college.
A power of attorney is a contract that allows you to name an individual to act on your behalf for financial matters, during your lifetime, should you become incapable of doing so.
A health care power of attorney specifies who is authorized to make health care decisions on your behalf, if you are incapable of doing so.
Hannah K. Metts, an attorney with McDonald Patrick, Poston, Hemphill and Roper LLC in Greenwood, says an agent, under any type of power of attorney, can only make decisions for the person during the person's lifetime.
"Individuals should consider reviewing and possibly updating their estate plans when a spouse, child or other close relative dies or becomes incapacitated," Metts wrote in an email. "Also, estate plans should be reviewed when a person has a change in marital status, has a child, or has a substantial change in assets."
Trusts and beneficiary designations on assets are sometimes included in estate plans, Metts wrote.
"Trusts can be used in various situations, such as providing for minor children, adult children with special needs or a spouse with special needs or who has become incapacitated," Metts wrote. "Trusts can also be used for tax planning reasons or when an individual wants to put a restriction on an inheritance."