A bill

 

TO AMEND THE SOUTH CAROLINA CODE OF LAWS BY ENACTING THE "SOUTH CAROLINA ENHANCED LIFE ESTATE DEED ACT" BY ADDING PART 5 TO ARTICLE 6, TITLE 62, SO AS TO ESTABLISH AN ENHANCED LIFE ESTATE DEED AND TO PROVIDE FOR PROCESSES AND PROCEDURES RELATED TO SUCH LIFE ESTATE DEED.

 

Be it enacted by the General Assembly of the State of South Carolina:

 

SECTION 1.  Article 6, Title 62 of the S.C. Code is amended by adding:

 

PART 5

 

South Carolina Enhanced Life Estate Deeds

 

    Section 62-6-500.  This part shall be known as the "South Carolina Enhanced Life Estate Deed Act."

 

    Section 62-6-510.  This part establishes an enhanced life estate deed, also known as a "Lady Bird deed," which shall permit a grantor to transfer real property to one or more designated remainder beneficiaries upon the grantor's death. Such transfer shall be effective by reason of this part and is not testamentary or subject to Articles 1 through 4 of this title (estate administration).

 

    Section 62-6-520.  For purposes of this part:

    (1) "Enhanced life estate deed" means a revocable trust instrument created pursuant to the provisions of this part that designates real property to pass to one or more remainder beneficiaries upon the grantor's death with the grantor retaining full control over the designated real property during the grantor's lifetime.

    (2) "Grantor" means the person who establishes an enhanced life estate deed and transfers real property into it.

    (3) "Remainder beneficiary" means the person or entity designated to receive real property pursuant to an enhanced life estate deed upon the grantor's death.

    (4) "Trustee" means the person or entity responsible for managing the enhanced life estate deed. A grantor may be the trustee during the grantor's lifetime.

 

    Section 62-6-530.  A grantor may establish an enhanced life estate deed by executing a written revocable trust instrument. An enhanced life estate deed must contain, at a minimum, the following:

        (1) a statement that the trust is an enhanced life estate deed, a Lady Bird deed, or clearly states its intent to operate under this part;

        (2) designates a trustee;

        (3) specifies one or more remainder beneficiaries to receive the real property in the enhanced life estate deed upon the grantor's death;

        (4) reserves to the grantor full control over the real property in the enhanced life estate deed; and

       (5) a statement that the enhanced life estate deed is revocable during the grantor's lifetime.

The grantor must execute and record an enhanced life estate deed with the register of deeds or clerk of court, as appropriate, in each county where the real property is situated.

 

    Section 62-6-540.  (A) During the grantor's lifetime, the grantor shall retain full control of the real property in the enhanced life estate deed. This shall include, but not be limited to:

        (1) full use and enjoyment of the property;

        (2) the right to sell, mortgage, lease, or otherwise encumber the property;

        (3) the right to revoke or amend the enhanced life estate deed, including changing remainder beneficiaries;

        (4) the right to withdraw the property from the enhanced life estate deed; and

       (5) the right to terminate the enhanced life estate deed.

    (B) Any action taken by the grantor pursuant to subsection (A) shall not require the consent of any remainder beneficiary or the trustee if the trustee is someone other than the grantor.

 

    Section 62-6-550.  (A) If the grantor is designated as the trustee, no separate trustee duties apply to a named successor trustee during the grantor's lifetime, except as provided in subsection (B).

    (B) In the event a successor trustee is named upon the grantor's death or incapacity, that trustee shall:      (1) distribute the remaining property to the remainder beneficiaries as specified in the enhanced life estate deed; or

       (2) manage the property in the enhanced life estate deed according to the terms of the enhanced life estate deed if distribution is delayed.

 

    Section 62-6-560.  (A) The property held in an enhanced life estate deed at the time of the grantor's death shall pass directly to the remainder beneficiaries without the need for probate proceedings.

    (B) The property held in an enhanced life estate deed shall not be subject to claims by the grantor's creditors unless the enhanced life estate deed was created with the intent to defraud creditors.

 

    Section 62-6-570.  (A) The grantor shall retain eligibility for any homestead property tax exemptions applicable under South Carolina law during the grantor's lifetime, provided the grantor continues to reside in the property.

    (B) The property in an enhanced life estate deed is considered part of the grantor's estate for federal and state tax purposes, unless otherwise excluded by applicable law.

    (C) The property in an enhanced life estate deed shall not be treated as a gift during the grantor's lifetime for Medicaid eligibility purposes. In addition, this property shall not be subject to Medicaid estate recovery provided that the enhanced life estate deed complies with applicable federal and state Medicaid requirements.

 

    Section 62-6-580.  A title insurance company may issue policies on property held in an enhanced life estate deed without requiring joinder or consent of any or all of the remainder beneficiaries, provided the enhanced life estate deed complies with this part.

 

    Section 62-6-590.  (A) The grantor may revoke or amend an enhanced life estate deed at any time during the grantor's lifetime by executing a written instrument of revocation or amendment. If the grantor revokes an enhanced life estate deed, the property shall revert to the grantor's individual ownership.

    (B) An amendment or revocation of an enhanced life estate deed must be filed with the appropriate register of deeds or clerk of court.

 

    Section 62-6-600.  This part supplements South Carolina's probate code. In the event of a conflict of this part with any provision of South Carolina law in regard to enhanced life estate deeds, the provisions of this part shall control.

 

SECTION 2.  If any section, subsection, paragraph, subparagraph, sentence, clause, phrase, or word of this act is for any reason held to be unconstitutional or invalid, such holding shall not affect the constitutionality or validity of the remaining portions of this act, the General Assembly hereby declaring that it would have passed this act, and each and every section, subsection, paragraph, subparagraph, sentence, clause, phrase, and word thereof, irrespective of the fact that any one or more other sections, subsections, paragraphs, subparagraphs, sentences, clauses, phrases, or words hereof may be declared to be unconstitutional, invalid, or otherwise ineffective.

 

SECTION 3.  This act takes effect upon approval by the Governor and applies to all enhanced life estate deeds filed with the appropriate register of deeds or clerk of court on or after that date.

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