The Swier Law Firm Estate Planning and Probate Law FAQs

You cannot be forced to accept an inheritance. As strange as that may seem, there are a number of reasons why a person may not want to accept property. This is most often used when all of the inheritance would go straight to creditors or if accepting the inheritance would significantly affect income tax status. A disclaimer can be used to not accept any type of inheritance, whether passing to you by will, state law, through a trust, from life insurance, financial accounts or real estate that pass by how they are titled.

Disclaiming property means that the person using the disclaimer will be treated as though they died before the right to inherit happened. A few rules to follow: there is generally a time limit to disclaim (often 9 months), the disclaimer must be in writing and be done before there is any benefit from the inheritance, the disclaimer must cover the entire inheritance from one place (you can disclaim from the will but take life insurance) and you don’t get to say what happens to it. Be careful though, some jurisdictions do not allow disclaimers if you already have no money or are receiving public benefits based on low income.

Of course, your will does not take effect until your death. However, other estate planning documents (known as “advanced directives”) may be useful during your lifetime.

A Durable Power of Attorney for Health Care is a document that you, as the “principal,” create by appointing another person, the health care “agent” or “attorney in fact,” to make health care decisions for you should you become incapable of making them yourself. This type of power of attorney is “durable” because it is effective even if you become incapacitated. It is important to note that your “agent” or “attorney in fact” does not need to be a licensed lawyer.  In fact, you can name anyone to serve in this role.   

A Living Will is a document that instructs your physician and other health care providers as to the circumstances under which you want life-sustaining treatment to be provided, withheld, or withdrawn.

Similar to a Durable Power of Attorney for Health Care, a Durable Power of Attorney (Financial) is a document that you, as the “principal,” create by appointing another person, the financial “agent” or “attorney in fact,” to make financial decisions for you should you become incapable of making them yourself. Once again, it is important to note that your “agent” or “attorney in fact” does not need to be a licensed lawyer. You can name anyone to serve in this role.   

You should resist the temptation to use “simple forms” that you may find in a book or on the Internet. South Dakota has particular requirements for advanced directive documents. You should work with your attorney to draft these documents so that they are valid in South Dakota.

The term "basis" is 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.

There are generally two types of "basis":

• Stepped-up Basis - 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 updated value without paying tax on that increase. This has the potential to save a significant amount of capital gains upon sale in the future.

 

• Stepped-down Basis - Same as the stepped-up basis except the asset has gone down in value since it was purchased. The new owner would then take that assets with a new reduced (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.

The term "assets" includes 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.). 

A "codicil" is simply a written change to a Will.

 

An "ancillary administration" is when a probate needs to be opened in another state, generally because a decedent owned real estate there.

No. The state of South Dakota actually tries hard to replicate what they think you would have wanted to happen with your assets, even if you didn’t say what you wanted. If you die without a Will (known as dying “intestate”) your assets will pass in accordance with South Dakota law. The law starts by looking for people in your life that were closest to you. If you had a spouse your money will start there. In South Dakota, if you had no descendants or if all your descendants were also descendants of your spouse, then your assets will pass to your  spouse.  If you had descendants that were not from your spouse then your assets will start to be divided among different people in percentages.

 

Despite the state trying to replicate what you would want, it still is much easier to distribute your assets if you have a valid Will at the time of your death. Even if you end up distributing things exactly how they would otherwise be distributed under state law, dying with a Will helps expedite the entire process of probating your estate – it leaves no doubt as to where you want your assets to go to and also helps in naming the personal representative or executor put in charge of sorting it all out.   

 

Do You Need To Speak With A Lawyer About Estate Planning?

If you need to speak with an experienced estate planning lawyer please contact us online or call our office directly at 888.864.9981. We will be happy to discuss your legal options!

Not exactly. Yes, your Will can say anything you want it to say. However, not everything you may write in your Will may be allowed under state law. The biggest thing that the state may have a say over would be if you wanted to disinherit your spouse. The state, if requested by your surviving spouse, can essentially force your estate to provide your surviving spouse a portion of your estate. This legal maneuver harkens back to English law concepts of dower or curtesy, both of which were designed to reserve portions of an estate for the surviving spouse to prevent that spouse from falling into poverty and becoming a burden on the community.

In South Dakota, the amount of the estate your surviving spouse can claim depends on how long you have been married with the maximum amount of 50% being reached at 15+ years of marriage. Your surviving spouse does not automatically receive this amount; he or she must affirmatively “elect” to take this share, but there are circumstances in which your surviving spouse may be forced to make this election, such as if they are receiving certain income or asset-based benefits.

Do You Need To Speak With A Lawyer About Estate Planning?

If you need to speak with an experienced estate planning lawyer please contact us online or call our office directly at 888.864.9981. We will be happy to discuss your legal options!

No, this is actually a myth. The state of South Dakota actually tries hard to replicate what they think you would have wanted to happen with your assets, even if you didn’t say what you wanted. If you die without a Will (known as dying “intestate”) your assets will pass in accordance with South Dakota law. The law starts by looking for people in your life that were closest to you. If you had a spouse your money will start there. In South Dakota, if you had no descendants or if all your descendants were also descendants of your spouse, then your assets will pass to your  spouse. If you had descendants that were not from your spouse then your assets will start to be divided among different people in percentages.

Despite the state trying to replicate what you would want, it still is much easier to distribute your assets if you have a valid Will at the time of your death. Even if you end up distributing things exactly how they would otherwise be distributed under state law, dying with a Will helps expedite the entire process of probating your estate – it leaves no doubt as to where you want your assets to go to and also helps in naming the personal representative or executor put in charge of sorting it all out.   

Do You Need To Speak With A Lawyer About Estate Planning?

If you need to speak with an experienced estate planning lawyer please contact us online or call our office directly at 888.864.9981. We will be happy to discuss your legal options!

“Unfortunately, I don’t know a lot about my living will. In fact, I’m not even sure where it is at this point.”  - Tom Brokaw

In a 2012 TED talk between Tom Brokaw and his daughter, Dr. Jennifer Brokaw, it was clear that some of Mr. Brokaw’s estate planning wishes weren't in as good of shape as he thought. “You know I have a living will,” he begins. But his daughter indicated that she knew nothing about his living will. The audience responds with laughter and applause while Mr. Brokaw chuckles and looks a little embarrassed. And in response, he comes clean and admits: “Unfortunately, I don’t know a lot about my living will. In fact, I’m not even sure where it is…”

This exchange reveals volumes: an advance directive was created, but was not shared with relatives and is certainly not available in an emergency. Creating an advance directive is great - however, having an actual discussion with your family about your advance directive is needed to make sure your wishes are carried out.  

So what is the solution? Read South Dakota Estate Planning - Are You in the Same Boat as Tom Brokaw? (Part Two).