When you create your estate plan, your primary focus will likely be ensuring that your property and other assets are passed down according to your wishes. Another important aspect of estate planning, however, involves how and when assets are passed down because how and when assets are passed down to beneficiaries can directly impact your beneficiaries. Assets that avoid probate, for example, can be distributed much quicker than assets that must go through probate. With that in mind, the estate planning attorneys at Wilcox Attorneys, PA explain what assets go through probate in Arkansas.
What Is Probate?
At the time of your death, you may own real property, cash, investment accounts, personal property, and a variety of other assets. All the assets you own are part of your estate when you die. The law wants to make sure that all your estate assets are transferred to the correct beneficiaries and/or legal heirs of your estate. The law also has an interest in making sure that creditors of your estate can file claims against your estate. To accomplish these goals, the law provides a legal process known as probate. If you executed a Last Will and Testament, the person you named as the Executor in that Will is the person will oversee the probate of your estate. If you die intestate (without a Will) a court will appoint someone to be the Personal Representative and that individual will be in charge of probating your estate.
What Goes Through Probate in Arkansas?
Formal probate can take many months or longer to get through, making probate avoidance a common estate planning goal. In Arkansas, an estate is required to go through probate under certain conditions. For example, if the estate value exceeds $100,000, there are creditors of the estate, or someone contests the Will, probate is mandatory in Arkansas.
Probate vs. Non-Probate Assets in Arkansas
If avoiding probate is an important estate planning goal, talk to your estate planning attorney about the numerous tools and strategies that may be available to help achieve your goal. One relatively simple estate planning strategy that can help your estate avoid formal probate is to convert probate assets to non-probate assets when possible. Some common examples of non-probate assets that do not go through probate in Arkansas include:
- Assets held in a living trust. Trust assets can be distributed at any time according to the terms of the trust agreement. (Note that assets transferred into a testamentary trust after your death do go through probate)
- Co–owned property. If you co-own property with rights of survivorship, your interest in that property will automatically pass to the co-owner(s) when you die.
- Life insurance proceeds. Proceeds from a life insurance policy do not go through probate. Instead, they can be distributed to the named beneficiary shortly after your death.
- Certain types of financial accounts. If you own a bank account with a “Payable on Death (POD)” designation, the named beneficiary will automatically become the owner of the account when you die. (Note that the beneficiary has no ownership rights while you are alive).
As you can see, making a few simple changes to the type of assets you hold can have a significant impact on the probate of your estate after you are gone. For example, making sure that your home is titled jointly with rights of survivorship can pass ownership directly to your spouse or an adult child when you die. Likewise, changing a bank account to a POD account means that the designated beneficiary will have immediate access to the funds in the account after showing proof of your death instead of having to paid for the assets to go through probate.
Contact Our Estate Planning Attorneys
For additional information, please sign up for one of our FREE estate planning webinars. If you have additional questions or concerns about what goes through probate in Arkansas, contact the experienced Washington County, Fayetteville, Springdale, Rogers, Bentonville, and Northwest Arkansas estate planning attorneys at Wilcox Attorneys, PA by calling 479-443-0062 to schedule your appointment today.