GLOSSARY OF COMMON TERMS IN PROBATE
Beneficiary– a person who has any present or future interest, vested or contingent in a trust. Also includes any person entitled to enforce a charitable trust.
Ceremonial marriage– also known as statutory marriages; those marriages entered in compliance with S.C. Code Ann. § 20-1-10 et seq. Ceremonial marriage requires an application for a license, a 24 hour waiting period between the application and issuance of the license, performance of a marriage ceremony by an authorized official, a lack of impediments, and consummation by cohabitation.
Child– any individual entitled to take as a child by intestate succession from a parent but excludes individuals who are only stepchildren, foster children, grandchildren or any other more remote descendant
Common-law marriage– a form of marriage where the parties did not engage in a ceremonial (or statutory) marriage, but which meets certain requirements. The existence of a common law marriage must be determined by either the Family Court or Probate Court. A common law marriage has the same rights and obligations as a ceremonial or statutory marriage. The requirements for a common law marriage are an intention evidencing an actual and mutual agreement to live publicly together as husband and wife, consummation by cohabitation, and a lack of impediments.
Conservator– a person appointed by a court to manage the estate of a protected person. A conservator is appointed after a formal proceeding to determine if a person is an incapacitated person, or to secure the administration of the estates of an incapacitated person or minor.
Devise– noun- a testamentary disposition of real or personal property; verb- to dispose of real or personal property by will
Devisee– any person designated to receive property in a will.
Elective share– the right of a surviving spouse to elect to take one third of the decedent’s probate estate, to be satisfied from all benefits provided to the spouse whether under or outside the will.
Executor– also known as Personal Representative.
Guardian ad litem– literally, “guardian for litigation”; an attorney appointed to represent the alleged incapacitated in a proceeding for appointment of incapacity and be the eyes and ears of the court.
Guardian– a person who has qualified as a guardian of an incapacitated person pursuant to a testamentary or court appointment. A guardian is appointed after a formal proceeding to determine if a person is an incapacitated person.
Heir– a person entitled under the laws of intestate succession to receive the property of the decedent.
Incapacitated person– a person who is impaired by reason of mental illness, mental deficiency, physical illness or disability, advanced age, chronic use of drugs, chronic intoxication, or other cause (except minority) to the extent that he lacks sufficient understanding or capacity to make or communicate responsible decisions concerning his person or property.
Intestate– someone who died without a valid will.
Issue– all of a person’s lineal descendants whether natural or adopted where a parent child relationship is determined at each generation.
Parent– any person who is entitled to take or would be entitled to take as a parent under the laws of intestate succession.
Per stirpes– a different word for the term “by representation”. By representation is a way of counting heads to find heirs. Under South Carolina’s version of by representation shares are determined at the first degree of kinship where a living person is found. One share is set aside for each living person, and one for each predeceased person who was survived by issue.
Personal representative- includes executor, administrator, successor personal representative, special administrator, and persons who perform substantially the same function under the law governing their status.
Power of attorney– a writing by a principal designating another person to act as his attorney in fact to act on their behalf. The authority of the attorney in fact to act on behalf of the principal must be set forth in the power and may relate to any act, power, duty, right or obligation which the principal has or may acquire relating to the principal or any matter, transaction, or property. The attorney in fact has a fiduciary relationship with the principal and is accountable and responsible as a fiduciary.
Special administrator– a personal representative appointed by the court when necessary:
Spouse– the surviving spouse under a valid ceremonial or common-law marriage.
Testate– dying with a valid Will.
Trust– a form of property ownership where legal and equitable title is split. In a trust, a trustee holds the legal title to the property for the use and enjoyment of the trust beneficiaries. A trust under the South Carolina Probate Code refers to an express trust, but not a constructive trust, resulting trust or other special types of trust specifically excluded by statute.
Well-intentioned family members often add a loved one to their bank accounts. There are a variety of reasons this may occur: shared expenses, planning for final expenses, long-term care concerns, or a potential for future incapacity. In many of these instances, one individual contributes most or all of the funds to the account. After death, the question then arises among family members and heirs as to whether these funds are part of the decedent’s estate or pass directly to the other person named on the account.
Here’s the typical scenario we see: Dad passed several years ago. Mom has three children but only one of them lives nearby. Mom adds the local child (Child A) on her checking and savings account so that Child A can help make sure the bills get paid, handle the account during her absence or illness and then “do the right thing” when she dies. Child B and C are aware of the arrangement but have been told by mom and Child A that this is just for convenience. At Mom’s death, Child A goes to the bank and personally claims all of the funds and declares they are hers as joint owner of the account. The funds comprise the bulk of mom’s estate which was to be divided equally. An argument and threats of litigation begin . . .
In this scenario, it is important to remember that bank accounts are ultimately governed by the account agreement with the financial institution. They should always be your first stop when trying to determine the true ownership of your accounts (when setting up this type of arrangement) or the first stop for a Personal Representative trying to determine whether or not these funds belong to the estate.
The account agreements at many financial institutions now provide that multiple owner accounts are owned as joint tenants with rights of survivorship. You may recall we previously discussed the two types of joint property ownership in South Carolina. As a quick recap, owning property as joint tenants with right of survivorship (a mouthful but a useful tool in estate planning) gives each joint owner an equal interest in the property. At the death of the first joint owner (mom in our scenario), their share belongs equally to the surviving joint owner(s) automatically (Child A). Therefore, Child B and C would not have access to these funds nor would the Probate Court have jurisdiction over them as they are a non-probate asset.
In researching this post, we reviewed the consumer account agreements at several major banks. All provided for ownership of joint accounts as joint tenants with right of survivorship as the default (or sometimes only) option. Again, this means that these assets pass directly to the other person whose name appears on the account, and are NOT an asset of the estate. The result is that accounts are opened with rights of survivorship even when that may not be the intent of the original account holder.
In addition to the account agreement, recent amendments to the South Carolina Probate Code provide a general set of rules to apply in these situations. The Probate Code’s default rule for accounts with multiple owners is also to consider them joint ownership with right of survivorship.
So what does this mean for the estate? Unfortunately, the answer is: it depends. Most likely, the account belongs to the surviving joint owner unless the designation on the account agreement indicates a different result.
If a dispute has arisen as to ownership of a decedent’s account, consultation with an experienced probate attorney may be helpful. Despite these rules, sufficient evidence of a different intent by the Decedent may be able to reverse this outcome. More importantly, we suggest our estate planning clients be aware of these rules when deciding whether or not to create joint accounts or how much funds to place in them.