The most common type of trust in South Carolina is a revocable family trust or revocable living trust. The main advantage of this type of trust is that it allows for the probate process to be avoided, as well as for the postponement of gifting to grandchildren or other beneficiaries. In creating a revocable trust, a successor trustee who can be trusted to handle the assets in the trust must be chosen.
Another type of trust commonly used in South Carolina is an irrevocable family trust or asset protection trust. This type of trust affords protection for the assets within the trust, which would be important in the event that the creator is sued and their assets sought as payment. The primary disadvantage of an asset protection trust is that it cannot be revoked.
A special needs trust is governed by federal and state laws and is set up for someone who is physically or mentally handicapped. The money put into such a trust is meant to be used for the individual with special needs, and cannot be used to pay anything Medicaid, Medicare, or any state agency can pay. Once an agency exhausts all of their assets, a special needs trust will help pay for the things which Medicare or Medicaid will not cover.
An irrevocable life insurance trust is an irrevocable trust that only holds life insurance so that the life insurance can be made payable to the trust. This allows the creator of the trust to determine how those funds will be handled after his death.
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