Generally speaking, any assets that remain in your South Carolina estate are subject to probate. For instance, if a house was titled in your name only, it would likely be held in your estate. The same is often true for bank, brokerage or retirement accounts that do not have a beneficiary designation attached to them.
Retirement accounts are typically held outside of your estate
In most cases, an IRA, 401(k) or another retirement account would not be considered to be assets held within your estate. This is because they are often transferred to a spouse, child or charitable organization per the terms of a beneficiary designation.
What happens if you don’t complete a beneficiary designation form?
In the event that you don’t complete this document, the funds inside of the retirement account generally revert back to your estate. The same is generally true if the named beneficiary has passed away or hasn’t reached the age of majority.
You are allowed to name alternate beneficiaries
An alternate beneficiary would take possession of a retirement account if the original beneficiary was unable to. For instance, you could stipulate that a charitable organization would receive funds inside of a 401(k) in the event that your spouse predeceased you. This would minimize the likelihood that the account would be subject to probate and potentially cause the need for probate litigation to occur.
An estate planning professional may be able to help you create beneficiary designations that conform to state law. This person may also be able to review any designations that you have already made. Ideally, you will review your estate plan after a major life event such as the birth of a child or death of a spouse.