Get Answers to Your Highest Priority South Dakota Legal Questions

 What Does Custodian or Conservator Mean In Estate Planning?

A person appointed to manage the assets of a minor.  This could be the same person as the guardian or different.

Example Of Custodian or Conservator In Regards To Estate Planning

My brother appointed me to be the conservator of my nephew’s inherited assets until my nephew becomes an adult, my sister is his guardian, but I am his conservator.

What Does Contest Mean In Estate Planning?

To dispute or challenge a document.

Example Of Contest In Regards To Estate Planning

My brother was mad that mom wrote him out of her will, so he is trying to contest her will to say that she didn’t really sign it.

What Does Community and Marital Property Mean In Estate Planning?

A legal distinction at the state level which says that property acquired during a marriage is owned equally by both spouses.  South Dakota is not a community property state, but does allow the option of setting up a community property trust.

Example Of Community Property and Marital Property In Regards To Estate Planning

My parents are residents of California, which is a community property state. So even though my dad purchased a rental property in South Dakota in his name, my mom automatically owns half of the property and half of the income or debts that go along with it.

What Does Codicil Mean In Estate Planning?

A written change to a will.

Example Of Codicil In Regards To Estate Planning

When I wrote my will I named by brother as my executor.  My brother died last year.  I didn’t have any other changes to make to my will, so my estate planning attorney drafted a one-page codicil that allowed me to just name a new executor.

What Does Stepped-Down Basis Mean In Estate Planning?

Same as the stepped-up basis except the asset has gone down in value since it was purchased.  The new owner would take that asset with a new lower (stepped-down) basis.  This depends on the value as of the date of death of the owner compared to the price the owner originally purchased the asset.

Example Of Stepped-Down Basis In Regards To Estate Planning

Dad was convinced that AOL was going to make a comeback.  He bought it for $50,000 and it’s now worth $5,000.  Instead of selling his AOL stock at a loss during his lifetime he held onto it.  I now own it with a basis of $5,000.

What Does Stepped-Up Basis Mean In Estate Planning?

Assets get a new basis when they are passed by inheritance (through will or trust).  These assets will be re-valued as of the date of death of the owner.  If the value of the asset has gone up in value since purchase the new owner will take that asset with a new basis equal to the current value without paying tax on that increase.  This has the potential to save a significant amount of capital gains upon sale in the future.

Example Of Stepped-Up Basis In Regards To Estate Planning

My mom bought real estate in 1950 for $25,000.  When she died last year it was appraised at $500,000.  I received that real estate from her estate and my basis is now $500,000 tax-free.  If my mom had sold this real estate before she died she would have had to pay taxes on $425,000 of gain, but because she died with the property I received a step-up in basis to the current value.

What Does Basis Mean In Estate Planning?

What a person has paid for an asset and sometimes money invested in an asset after purchase (Example: what you paid for your house plus what you paid to update the kitchen). This determines gain/loss for income tax purposes.

Example Of Basis In Regards To Estate Planning

You purchased your house for $100,000, but have since had to put on a new roof for $3,000, you added on a garage for $10,000, and updated the windows for $4,000.  Your new basis in your house is now $117,000 ($100,000 + $3,000 + $10,000 + $4,000).

What Does Assigns Mean In Estate Planning?

Another word for “assignee” and means someone who could possibly have an interest in something in the future.  This could be an interest in real estate, an interest in something subject to an agreement or contract or many other possibilities.  This term is often used in deeds and wills.

What Are Considered Assets In Estate Planning?

Essentially everything you own in any form whether or not they have value.  This includes, but is not limited to: bank accounts, stocks, jewelry, cars, clothes, real estate and even includes digital assets (e-mail, blog, photos etc.).

Example Of Assets In Estate Planning

When my mom died it was difficult to find all of her assets because she didn’t leave a list.  We had to track down life insurance policies, frequent flyer miles, and try to gain access to her computer to retrieve priceless photos.  There was a lot we wish we had thought about before she died.  I didn’t realize she had so many assets we would have to track down.

What Does Ancillary Administration Mean?

When probate needs to open in another state, generally because a decedent owned real estate there.

Example Of Ancillary Administration

I had to open an ancillary administration in Illinois for my mom’s estate because she owned land there.  This was necessary for me to pay off the debt and properly sell the property in Illinois, but the land and the proceeds from the sale were then reported as part of the probate process in South Dakota.