Source: https://www.hiltonheadestateplanning.com/2014-probate-code-changes
Timestamp: 2019-10-18 19:40:34
Document Index: 535964364

Matched Legal Cases: ['art 1', '§ 62', '§ 62', 'art 5', '§ 62', '§ 62', 'ART 4', '§ 62', 'ART 2', 'ART 6', 'ART 12', 'ART 13', '§ 62', 'art 9', 'ART 4', '§ 62', 'ART 9', '§ 62', 'ART 10']

Probate Lawyer - South Carolina Probate Code Changes — The Law Office of Michael J. Howell
This summary is from the South Carolina Legislative Website, where you can also find a copy of the changes with a redline edition showing what was removed and what was added to the Probate Code.
ARTICLE I. GENERAL PROVISIONS, DEFINITIONS, AND PROBATE
JURISDICTION OF COURT (5 PARTS)
Most of the provisions in Part 1 are not changed. The changes to § 62-1-106, concerning the effect of fraud and evasion, clarify that a person injured by the effects of fraud can obtain relief against the perpetrator of the fraud and anyone benefiting from the fraud, and the person does not have to choose between the two, as existing law could be read. The change to § 62-1-107 clarifies that the SC Rules of Evidence that apply in circuit court apply in a probate court, unless specifically excluded by a provision in the SC Probate Code. The provisions related to evidence as to the status of death are deleted and the other provisions are incorporated into Article 1, Part 5, dealing with Uniform Simultaneous Death provisions. A new provision, § 62-1-111, is added to clarify a probate court’s authority to award attorneys fees and costs and to conform to the provisions of the SC Trust Code in § 62-7-1004, which provides for attorneys fees in a similar manner.
PART 4. NOTICE, PARTIES, AND REPRESENTATION IN ESTATE LITIGATION
This act substantially changes the method of calculating the elective share. Currently, only probate assets offset an elective share, but the changes in this act allow non-probate transfers to a surviving spouse to be included in any calculation of an elective share. It confirms that the value of an illusory revocable trust is still subject to the elective share (as per the 1991 Seifert case, which is discussed in more detail in the Reporter’s Comments). It also gives the surviving spouse the right to allow a trustee to convert a trust in which a surviving spouse has only a life estate/income interest to a unitrust, which is explained in more detail in Article 7. This could provide an annual payout of 3 to 5% of the trust value, which could be needed with the much lowered interest rates currently offered. This provides further protection for a surviving spouse in the current economy when fixed-rate investments produce little income. Also, § 62-2-207 clarifies that the elective share is a pecuniary, rather than a fractional, amount, which makes it less burdensome for the surviving spouse as to the income and appreciation during the administration of the estate. Section 62-2-205 changes the time limits for presenting a petition for an elective share from 8 months after death or 6 months after probate of the will to also include an opportunity for a surviving spouse to claim an elective share if a surviving spouse is served with an action challenging a will. This prevents an unfair result for a surviving spouse who relies on a will only to have it challenged and a different will probated after the current time period for presenting an elective share claim has expired.
PART 2. VENUE FOR PROBATE AND ADMINISTRATION; PRIORITY FOR
ADMINISTRATION; DEMAND FOR NOTICE
PART 6. PERSONAL REPRESENTATIVE, APPOINTMENT, CONTROL, AND
PART 12. COLLECTION OF PERSONAL PROPERTY BY AFFIDAVIT AND
PART 13. SALE OF REAL ESTATE BY PROBATE COURT
Sections 62-3-1302 through 62-3-1310
ARTICLE IV. LOCAL AND FOREIGN PERSONAL REPRESENTATIVES;
ANCILLARY ADMINISTRATION (4 PARTS)
This article concerns the coordination of administration of nonresident decedents’ estates when those estates have interests in the state.
Section 62-4-101
Sections 62-6-101 through 62-6-106
Section 62-6-103 explains that an account may be for either single or multiple parties and establishes that the Probate Code now allows for accounts to have or not have rights of survivorship, POD (payable on death) designations, or agency designations. Section 62-6-104 provides forms for single and multiple party accounts and provides that financial institutions are protected if the language in these statutory forms are essentially the same as those used by the financial institution. Section 62-6-105 allows agency designations on accounts, but those agents have no beneficial interests in the accounts.
Section 62-6-201 establishes that beneficiaries and agents have no rights to an account during the lifetime of a party. Section 62-6-202 substantially changes existing law so that accounts with multiple parties or beneficiaries automatically contain a right of survivorship arrangement unless the account specifically provides otherwise, such as the designation of an account as a tenancy in common. Section 62-6-203 provides what rights exist to parties and beneficiaries at the time of death, what is necessary from a party or other individual to alter the terms of an account with a financial institution, through notice or express terms in a will, and that the standard of proof is clear and convincing evidence. This section also provides that a multiple party account of husband and wife is presumed to be a joint account with the right of survivorship unless shown otherwise by clear and convincing evidence. Section 62-6-204 is changed to clarify that these accounts are non-testamentary and therefore may not be determined by provisions of a will. Section 62-6-205 repeats the provisions of former § 62-6-107, dealing with creditors’ rights. As with existing law, this section provides that a decedent’s estate has limited beneficial ownership to the funds in a multiple party account for the payment of debts, taxes, and estate administration, but only if the decedent’s estate is insufficient to meet those requirements. The statute of limitations for creditors is changed to 1 year following the death of the decedent, to be consistent with the statute of limitations for creditors to a probate estate.
In this act, few changes are made to the substantive provisions of the Trust Code. Many of the Reporter’s Comments to the various parts are substantially changed and updated, removing former incorrect or inaccurate references and discussions about the Uniform Trust Code. Changes to and reorganization of the comments clarify and make the comments more accurate as applicable to South Carolina. One major addition to the Trust Code is the inclusion of “Unitrust” provisions in Part 9 of Article 7.
PART 4. CREATION, VALIDITY, MODIFICATION, AND TERMINATION OF
The power of appointment is considered a power to appoint people other than the trustee, the trustee’s creditors, the trustee’s estate, or creditors of the trustee’s estate. To exercise the power, the section requires a writing signed by a trustee that is recorded within the records of the original trust; the trustee does have to give written notice to the qualified beneficiaries 90 days prior to the exercise of the power; but if the notice period is waived, the trustee may exercise the power on the date of the waiver. The section states that no duty of the trustee is created to distribute principal or income and that the terms of the trust may modify this section. In addition, a trustee or beneficiary is able to commence an action to approve or disapprove an exercise of the power of appointment. Lastly, § 62-7-109 applies to this section with regard to notices and sending documents. The comments to this section states that this section allows greater flexibility in the case of unforeseen circumstances or drafting error. The section basically allows modification of irrevocable trusts for the benefit of the beneficiaries. The SC version of this section does not require absolute discretion over distribution in order to maximize flexibility, and the comments explain many of the subsections in detail.
Section 62-7-818, concerning the powers and discretions of a trust protector, grants the Trust Protector power as set out in the trust instrument. Its decisions are be binding on all other persons. These powers include: modifying the trust instrument for tax benefits; increasing or decreasing interests of any beneficiaries; modifying the terms of any power of appointment; removing or appointing a trustee, advisor, committee member; terminating the trust, vetoing or directing distributions; changing situs or governing law; appointing its successor; interpreting the terms of the trust; advising the trustee; and amending or modifying the trust to take advantage of certain laws. The comments to this section state that there is no common law counterpart to this section.
PART 9. SOUTH CAROLINA UNIFORM PRINCIPAL AND INCOME ACT; SOUTH
CAROLINA UNIFORM PRUDENT INVESTOR ACT
Section 62-7-904, concerning a trustee’s power to adjust, now recognizes the trustee’s power to convert a trust into a Unitrust according to §§ 62-7-904A through 62-7-904P. Another requirement is added to prevent the trustee from making an adjustment that makes an individual the owner of the trust for income and transfer tax purposes, but only if the person is not considered the owner for income and transfer tax purposes prior to the adjustment. Adjustments are prevented only if the estate of the individual does not include the assets if the trustee does not possess the power to adjust. A trustee is allowed to make an adjustment that benefits a beneficiary even if the trustee earns compensation as a percentage of the trust’s income, and a 16 new subsection is added to prevent the trustee from exercising the adjustment power if the trust is converted to a Unitrust.
PART 10. LIABILITY OF TRUSTEES AND RIGHTS OF PERSONS DEALING WITH