Wills, trusts, and estate planning law refers to a broad body of laws that regulate matters including
- Estate planning;
- Estate administration;
- Duties of the executor; and
- The distribution of property.
Estate planning includes the use of wills and trusts for an individual to outline how they want their property to be distributed upon their passing or incapacitation. Estate planning also includes other issues, such as:
- Organ donation;
- Legal guardian issues;
- Medical treatments; and
- Funeral arrangements.
Estate administration is the process of managing and distributing an individual’s property after their passing. This task is typically handled by the designated executor, who is named in the will. If they did not have a will, the property will be distributed according to the laws of the state in which they reside.
What is a Will Settlement?
A will settlement is the legal procedure that is used to resolve a dispute that involves a will. Wills are legally binding documents that are created and signed by individuals for the purpose of distributing their assets and property upon their passing. The will creator is also called a testator or decedent.
When the testator passes away, their will is submitted to the probate court to be probated, or proven. To probate a will means to distribute the testator’s property in accordance with the terms of the will. The probate proceeding is the means by which the court grants legal approval for property distribution.
In ideal circumstances, the terms of the will are clear, the court approves the distributions, and the beneficiaries receive their distributions without issue. In some cases, however, there are disagreements regarding the distribution of money or property, usually from family members who either did not inherit something they believe they should have or family members who did inherit under the will and are not satisfied. These disagreements are resolved by the will settlement process.
What Types of Will Settlement Procedures are There in South Dakota?
A will settlement may occur through the court or privately. A private will settlement involves negotiations between the executor and the individuals who have an issue with what was or was not distributed to them in the will. A private settlement may involve these individuals negotiating directly to resolve the disagreement.
A private settlement may also be accomplished with the help of an intermediary through a process called alternative dispute resolution (ADR). In this process, an arbitrator, a mediator, or another neutral third party helps the parties resolve their disagreement. It is typically less expensive than court proceedings.
The contesting party can also initiate a will contest in court. A will contest is heard by a special type of judge called a probate judge. Probate judges resolve will contests by applying relevant laws in order to best give effect to the wishes of the testator regarding distribution of their property.
Will contests can be expensive and include significant attorney’s fees and court costs. The proceedings may also take months or years to resolve the issue.
What is a Will Dispute?
A will dispute, also called a will contest, occurs when a party challenges all of a will or part of a will on specific grounds. Grounds for challenging a will may include, but are not limited to:
- Whether or not the testator had testamentary capacity;
- Whether or not the will, or part of the will, was the product of fraud or forgery;
- Whether or not another will is in existence which renders the will in dispute outdated or void;
- Whether the proper formalities were followed during the execution of the will, for example, whether witnesses were present, whether the testator acknowledged their signature in the witnesses’ presence, and others; and
- If there is a latent ambiguity in the will.
What are Trusts?
A trust is a tool used in estate planning that directs one or more individuals, called trustees, to hold the property of the individual who created the trust, called the trustor, for the benefit of another individual, called a beneficiary.
Trusts can be created for many reasons, including:
- Financial benefit for the trustor;
- Financial support for a surviving spouse or minor child or children; or
- For a charitable purpose.
What is Estate Planning?
Estate planning occurs when an individual takes steps to prepare for the disposition of their property in their estate after their passing. It may include creating a will and trusts that specify which individuals will inherit the testator’s estate.
An individual’s estate includes all of their wealth and assets. This may include:
- Real property;
- Personal property; and
In many cases, a will settlement requires referencing documents that were created as part of an individual’s estate planning process. For example, if the individual’s will indicates that specific property is to be disposed of by a trust, it may be necessary to examine the trust document that was created during the estate planning process.
Does South Dakota Have Any Special Wills, Trusts, and Estate Laws?
Yes, South Dakota has some special will, trusts, and estate laws. South Dakota has rules regarding who may be named as the executor of an estate. The executor is often called a personal representative in South Dakota.
In South Dakota, the executor of an estate must be at least 18 years of age and of sound mind, or, in other words, has not been judged incapacitated by a court.
Many states prohibit individuals with felony convictions from serving as executors. There is no such statute in South Dakota.
It is important to note that a probate court in South Dakota will reject a potential executor if they are found to be unsuitable in formal proceedings. Although it is unlikely, if a question arises regarding the qualifications of an executor, the court will hold a formal hearing before all interest persons, including:
- Creditors; and
- Other potential executors.
At this hearing, the court will determine who is best suited to serve as executor. In addition, the court will terminate any appointment that is found to be improper.
Many states impose special requirements on an executor who lives outside of the state. South Dakota does not. However, it may be advisable to appoint an executor who lives nearby due to the numerous duties and the length of time it may take to complete the probate process.
If an individual passes away without a will in South Dakota, their assets will pass to their closest relatives pursuant to that state’s intestate succession laws. Only those assets that would have passed through an individual’s will are affected by the intestate succession laws.
Typically, only assets that the testator owns alone and are in their name are included. There are some assets that do not pass through a will and are not affected by intestate succession laws, which will pass to the surviving co-owner or beneficiary whether or not there is a will, including:
- Property the individual has transferred into a living trust;
- Life insurance proceeds;
- Funds located in an IRA, 401(k), or other type of retirement account;
- Securities held in a transfer-upon-death account;
- Payable on death bank accounts; and
- Property the individual owns with another individual in a joint tenancy.
In South Dakota, if an individual is married and passes away without a will, what their spouse inherits depends on whether or not they have any living descendants. If the individual does not have any living descendants or all of the descendants are from the individual and their spouse, the spouse inherits all intestate property.
However, if the individual has descendants from an individual other than their spouse, their spouse inherits the first $100,000 of their intestate property in addition to half of the balance. The descendants inherit the rest of the intestate property.
Do I Need to Hire a South Dakota Wills, Trusts, and Estates Attorney?
Yes, it is essential to have the assistance of an experienced South Dakota estate attorney for any will, trust, or estate issue you may have in South Dakota. Estate planning can be complex and overwhelming, especially if you have a large estate. An attorney can review your assets, advise you regarding the best estate planning tools for you, and assist you in taking the steps to ensure your property is distributed according to your wishes.