Estate Planning in Arkansas: The Basics

As awkward as it can be to talk about estate planning, it is still an important topic. Proper planning can ensure that your assets are distributed as you intend and that your business continues to run smoothly. Below is a general overview of estate planning basics in Arkansas.

Writing a Will

A will outlines who will receive your property and other assets. It can establish custody if you have minor children. You also name an executor (someone who is legally responsible for seeing that your wishes are adhered to). While you can write your own will, it is best to seek legal advice to make sure everything is in proper form.

What Is Probate?

Your heirs likely will wind up in probate court to settle matters such as debts and taxes even if you do have a will. A will can speed things up, though, as can other mechanisms such as joint ownership or transferring property while you’re still alive. Creating trusts also helps. Estates in Arkansas valued at less than $100,000 can be settled more quickly under a greatly simplified probate procedure.

Arkansas Estate Planning, Wills, Trusts, ProbatePower of Attorney

Your estate planning should include a power of attorney document appointing someone to handle your affairs should you become incapacitated. You can decide which powers to grant: Will your designee be limited to paying the bills or will s/he be able to sign contracts? Will s/he be allowed to make decisions about your children?

Health Care Decisions

Living wills, or advance directives, spell out how you wish to be cared for in the event you cannot decide for yourself. Do you want to be put on life support? Under what circumstances would you want life support stopped?

Funeral Arrangements

At the very least, loved ones should know if you want to be buried or cremated, or donate your body for research. Spell out your wishes in a will or letter of instruction. If you want to be an organ donor, register and let your loved ones know you have done so.

Other Considerations

Most people will not need to worry about estate taxes because an exemption of $5.25 million for 2013 survived the fiscal cliff. Even small business owners should create succession plans to keep things running smoothly. You also can take care of beloved pets or donate to favorite charities in your will. If your death would financially harm a surviving spouse or children, consider a life insurance policy to protect them.

New Year’s Resolution: Create or Update your Estate Plan!

Estate Planning Financial Planning.Arkansas Attorney.Last Will.Revocable Trust

2014 is here and it’s time to put your estate planning on the top of your “to do” list.  If you don’t have an estate plan in place, now is the time to put one in place.  If you already have a plan, now is the time to do an estate plan review.  As time passes, many things in your life change, and those changes can have a drastic impact on your estate plan wishes.  Not sure where to begin?  Take a look at the list below.

1.   Marriage. Did you, your child or another family member named in your documents get married?

2.   Divorce. Did you, your child or another family member named in your documents get divorced?

3.   Birth or adoption of a child, grandchild, etc. Did you, your child, or someone else give birth or adopt a child that you would like included in your estate planning? Do you have to name a guardian for your children in case of your death?

4.   Child has reached the age of majority. Has a child named in your estate planning documents turned 18 or otherwise reached a milestone set in your estate plan?

5.   Death or serious illness. Has someone named in your estate plan died or fallen seriously ill, especially if it’s someone who has been named as your executor, power of attorney or trustee?

6.   Changes in relationships with people, pets or organizations. Do you have a new relationship with someone or an organization you would like to include in your planning? Alternately, have you severed any such relationships?

7.   Purchase or sale of major assets. Have you bought or sold a house, opened or closed a business, etc.?

8.   New insurance policies or pension plans. Have you acquired new insurance policies or pension plans that require adjustment of beneficiaries in your estate plan? Have you reached the age at which you are required to take distributions from a pension plan?

9.   Change of your state of residence. Have you moved and inadvertently made part of your estate plan invalid?

10. Tax law changes. Are there new or different provisions in the tax law that affects your estate distribution plan?

If the answer to any of the above is yes, and you do not have an estate plan, or you have not had your estate plan recently reviewed (within the past five years), then it is time to contact Shane Henry & Associates to schedule a consultation with attorney Shane Henry.

During your consultation, Shane Henry will gather information about you, your family, your assets and your wishes.  He will review your estate planning options, identify the estate planning documents that will best fit your needs and tell you how much it will cost to prepare the documents.

Probate in Arkansas

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  • When a person dies, the property he or she owned must be distributed to his or her heirs. The legal process for passing on ownership of property is called Probate.
  •  The term “probate” refers to a “proving” of the existence of a Will, and determining “proving” who the legal heirs are if no Will exists. The process of probate determines who will receive the property and, or assets of the deceased.
  •  A probate estate with a valid Will is known as a “Testate Estate“. A probate estate without a valid Will that is governed by State law is known as an “Intestate Estate“.
  •  The probate process involves identifying and taking an inventory of the deceased’s property, accounting and appraising the value of the property, and then paying taxes and creditors from the assets of the probate estate.
  •  The probate process is generally overseen by an executor. The person designated as the executor of the estate is named as such in the Will. The executor is the person who administers the probate estate. Even if named in the Will it is generally up to the court to approve the executor. If there is no Will, a personal representative or “Administrator” is appointed by the probate court to oversee the process. In some states or provinces the executor is also called the “Personal Representative“, even if a Will exists. Once appointed, many jurisdictions require the executor to post a surety bond to protect the property and assets of the estate and the heirs from misconduct by the personal representative.
  •  One common misconception of the probate process is that with the existence of a valid Will, the probate and estate can be avoided. Although the existence of a Will tends to speed up the process, probate is generally still required for any property or assets owned in the deceased’s name.

Estate Tax Portability: Do You Still Need a Trust?

Thanks to the recently passed American Taxpayer Relief Act of 2012 (ATRA) we each can now shelter up to $5.25 million ($10.5M for couples) from estate taxes as assets pass to our heirs. The same act also made “portability” a permanent law, which has prompted some to question the need of traditional trusts.

What is “portability” and how does it affect you?

The new portability law allows us to transfer our $5.25M (2013) exemptions to our surviving spouses. Previously, we could have only accomplished efficient use of both spouses’ exemption amounts by dividing asset ownership and creating a credit shelter trust, or an A/B Living Trust.

Portability does simplify the estate planning process but there are many things that you need to watch out for:

  • Remarriage: There is potential to lose a deceased spouse’s unused exemption amount when a more recent spouse passes away. One solution may suggest using the first spouse’s exemption via gift and then creating a credit shelter trust with the second spouse. It is always a good idea to review your estate plan with your attorney before getting remarried.
  • Watch out for appreciated assets: The exemption amount transferred to your spouse under the new “portability” law remains fixed and is not indexed for inflation. More inflation protection could be available under a credit shelter trust.
  • Tax filings: Portability requires the executor to file a return at the death of the first spouse.
  • Generation Skipping Tax (GST) Exemption: The GST exemption is not portable. By contrast an A/B Living Trust could take advantage of the GST exemption amounts for potential transfers to grandchildren.
  • Asset Protection/Prior Marriage: The credit shelter trust may provide asset protection and secure inheritances for children of prior marriages, and if properly drafted protect assets from the children’s creditors.
  • Living Trust avoids Probate: Besides allowing post-mortem portability, a Living Trust avoids the cost, delays and public disclosure that probate entails.

Other traditional planning solutions you may want to evaluate:

  • Annual Gifts: You may want to continue to gift to those other than your spouse to take advantage of the $14,000 (2013) annual gift exclusion per donee. There are also exclusions for transfers for medical and education expenses. This is still a great way to gift assets and reduce your gross estate.
  • As mentioned above the GST Exemption is not “portable” so you may want to consider gifting to lower generations to take advantage of the GST exemption amount now.
  • Spousal Lifetime Access Trust (SLAT): Here one spouse makes a gift in trust and the Trustee has the right to make distributions to the other spouse. Thus the SLAT can be used to provide the other spouse with access to a potential cash flow (from cash values within the trust) while the insured (or insureds’) remains alive.

Bottom line, keep your estate current. We will help assure your assets end up in the hands of those you intend with the least amount going to taxes and legal fees. We recommend a review every 3-5 years or upon a life changing events (marriage, divorce, or death).

Arkansas Living Wills and Durable Powers of Attorney for Health Care: What you need to know

Why do you need a living will and power of attorney for health care?

If you become unable to direct your own medical care because of illness, an accident, or advanced age, the right legal documents are your lifeline. When you don’t write down your wishes about the kinds of medical treatment you do or don’t want to receive and name someone you trust to oversee your care, these important matters can be placed in the hands of estranged family members, doctors, or sometimes even judges, who may know very little about what you would prefer.

What are health care forms called in Arkansas?

There are two basic kinds of health care documents that everyone should make. First, you’ll need a document naming a trusted person to direct your health care if you are unable to do so yourself. This document is commonly called a power of attorney. In Arkansas, the official name for this form is a durable power of attorney for health care.

Second, you should make a document setting out the types of medical treatment you would or would not like to receive in certain situations. In Arkansas, this form is called a living will.

Who makes health care decisions for me in Arkansas?

In Arkansas, the person you name to make decisions for you is called your health care agent. Most people name a spouse, partner, relative, or close friend as their health care agent. Under Arkansas law, your health care agent may not be under 18 years old.

What else do I need to know about choosing a health care agent in Arkansas?

Your health care agent will begin to make health care decisions for you when you lack the capacity to do so.

When choosing your health care agent, the most crucial criteria are trustworthiness and dependability. You might also want to choose someone you think will be good at asserting your health care wishes if others argue against them — that is, someone who is persistent or calm under pressure.

While you need not name someone who lives in Arkansas, the person you name should at least be willing and able to travel to your bedside if necessary.

Potential Sibling Adoption in central Arkansas

Please all be praying for a set of three siblings aged 4-12.  These three kids need a good family to take them in and be there for them.  Please email me directly for more information if interested.  shane@shafirm.com

One bad method used to avoid probate!

I have witnessed and have been told about many families trying to protect their real property from probate without using a revocable trust.  If you think it is a clever idea to add your children as joint owners to your real property in order to avoid probate, please think again.

Problems.

1. Homestead Exemption.  Everyone has a constitutional protection called the homestead exemption that provides you the ultimate protection against your home (up to a certain value).  Simply put, no one can kick you out of your home because you owe them money (except a bank may foreclose on property you’ve collateralized but that’s a different topic for another day).  Because your children likely cannot call your home their primary residence, the homestead protection is not available to them.  Therefore, they could lose part of your home to a divorcing spouse or creditor.

2. Control.  Use of the above mentioned method gives ownership rights to your children.  Therefore, you are now at their mercy to some degree.  You must have your children sign away their rights anytime you want to sell, lease, or mortgage your property.  It is even possible for angry or resentful children to have the surviving parent removed from the home.

3. Probate.  Thinking this method avoids probate is correct, but only if you die before your children.  If you have several children, then hopefully this would never be a problem, but a real interpretation of this method is that it is a temporary fix.

Alternatives.

1. Revocable Trust.  This instrument will provide you and your spouse complete control during your lifetime, it will keep your property out of probate, and keep your property free of any civil judgments against your children.

For more free information about creating a revocable trust (or living trust) in Arkansas, please give us a call or write to us today.

3 different criminal attorneys stabbed by client

CRIMINAL JUSTICE

Defendant Loses Right to a Lawyer After Allegedly Stabbing 3 of Them with Pencils or Pens in Court

Posted Nov 2, 2011 5:55 AM CST
By Debra Cassens Weiss

Updated: A man has been convicted of drug charges after a judge in Washington state declared that pencil-and-pen-packing defendant Joshua Monson forfeited his right to counsel because of three attacks on his lawyers during court hearings.

None of the lawyers was seriously hurt. In the first two incidents, which occurred less than a week apart, Monson was accused of stabbing two different lawyers with pencils he smuggled from jail, HeraldNet.comreports. On Tuesday, Monson grabbed the pen being used by his defense lawyer, Jesse Cantor of Everett, Wash., and stabbed Cantor in the head, witnesses said.

The attack occurred Tuesday as prosecutors gave opening statements in Monson’s felony drug trial in Snohomish County. Corrections officers set off an electric stun cuff on Monson’s leg as he lunged for the pen and then piled on top of him, the story says. The first person to reach Monson was a police officer seated at the prosecution table.

Judge David Kurtz said Monson would have to defend himself without a lawyer and would be strapped to a special chair for the rest of the trial. Kurtz advised jurors to ignore the incident, the restraints and the lawyer’s absence.

HeraldNet.com reported that Monson was convicted of drug possession Thursday while in the restraint chair. “A standby defense attorney from King County sat through the hearings to answer Monson’s legal questions,” HeraldNet.com wrote. Monson was not allowed to sign court documents with a pen or pencil.

HeraldNet.com also notes that Monson will be back in court again to face second-degree murder charges and, separately, two fourth-degree assault charges for the alleged attacks on his attorneys.

Updated Nov. 4 to report that Monson was convicted.

World’s Youngest Judge?

LAW IN POPULAR CULTURE

Indiana Lawyer Who Started His Legal Career as a 17-Year-Old Judge Gets the World Record

Posted Oct 31, 2011 4:30 AM CST
By Debra Cassens Weiss

Indiana lawyer Marc Griffin has claimed the title once held by a Texas man: Guinness World Records has declared that Griffin holds the record for being the world’s youngest judge.

Griffin was an enterprising 17-year-old high school graduate in 1974 when he persuaded county commissioners to appoint him to fill a vacancy for justice of the peace. Griffin later won re-election to the job that included presiding over some civil and criminal cases, as well as performing weddings. “I was marrying people, throwing people in jail, and fining people,” he recalls.

Griffin managed to snag the job at such a young age because of his realization that his township had a long-time vacancy for a justice of the peace. The last justice of the peace had died some 50 years before, and the position was never filled. Cases for the township were being handled by other justices of the peace in the county.

“I discovered this justice of the peace thing,” Griffin recalled in an interview with the ABA Journal, “and I thought, ‘Wait a minute, we need another court and I’m qualified.’ ” He requested a meeting with the county’s three commissioners, and persuaded them to recommend his appointment. The state’s governor concurred and gave him his commission.

Griffin learned of the vacancy because of his interest in the law while still in high school. “I knew I wanted to be a lawyer,” Griffin says, “so I used to sit and read statutory law. Some people read novels, some people read sports magazines. I would just sit and read Indiana law.”

Speeding tickets were a big part of Griffin’s docket because the highway speed limit had recently dropped from 70 to 55 miles an hour. He held court at all hours of the night when police needed authority to lock up suspected domestic abusers. But it was the weddings he performed and an attorney general’s opinion that garnered national news coverage. Griffin was marrying people even though he was himself too young to marry without parental consent, a fact noted by critics.

The state attorney general opined that Griffin was too young to hold office. An Associated Press “fun-sy” story reporting on the decision questioned whether the people Griffin had married were “living in sin” because their weddings were illegal, Griffin says. The legal dispute was put to rest when a circuit court found Griffin qualified to hold office, paving the way for a short-lived judicial career.

The state eliminated justice of the peace courts a year or two later. Griffin finished his education and got a law degree from Indiana University School of Law. He has a niche practice representing banks and insurance companies that obtain liens on properties through tax sales.

Griffin contacted Guinness after he read an article at ABAJournal.com about a Texas man who held the record for winning election as a justice of the peace at the age of 18. Griffin supplied Guinness with evidence verifying his appointment at age 17, and learned last Thursday that he is the new world record holder. A press release dispatched to the ABA Journal the same day announced his achievement.

Griffin says in the press release that he contacted Guinness 37 years after the fact because he didn’t realize the publication covered judicial records. “I thought they were just records of stunts, like doing the most jumping jacks,” he says in the release.

Digital Assets included in your wills and trusts?

More Wills and Living Trusts Including Digital Assets
Posted by: Bridget Mackay in Estate Planning on May 25, 2011
Tagged in: digita assets

Have you considered your digital assets in your estate planning? New evidence suggests many more people are including digital assets in their Wills and Living Trusts than ever before. Digital assets include the “real estate” you own online, including your social media presence, blogs or websites. If you have a stake in your online presence, you may wish to discuss the benefits of including digital assets in your own Will or Living Trust.
Why Do It?
Like most property you own, those online assets are worth something to you, both as recognition of your accomplishments as well as a valuable piece of property. Anything of worth you own, in any form, should receive some pre-planning guidance. If you were to die, for example, what would happen to your blog? Who would care for your social media presence or even inform your Internet friends of your death?
While many people have a simple presence online, others have a significant online investment to plan for after death. Estate planning can help you to do that, to ensure that your wishes are carried out according to your specific plans. Here are a few things to keep in mind about digital asset planning like this.
Organize all online “real estate” you own or utilize. Include all passwords, website administration panel codes and other identification information.

Designate one person to handle decisions regarding your items.

Make decisions about your social media presence. Do you want your Facebook page to list your death and to become a makeshift memorial? Do you want someone to take it down? How much information do you want the Internet to know about your death?

If you own online businesses, including revenue sharing programs or affiliate projects, document all details of this business. Determine if you want someone to take over these accounts for you or if the businesses should close. You may wish to note how your beneficiaries will divide your business’s income or who will run the business after you are gone.
Who should utilize this type of estate planning? Though anyone can list these details in their Will or Living Trust if they choose to do so, those who have a significant presence online, or those who own larger websites should definitely take steps to outline their specific needs. If you are not sure if this information should be a part of your estate plan, talk to your attorney about it.
Your estate planning attorney can help you to draft a Will or Living Trust that includes your digital products, your digital “real estate” and your wishes. In some cases, you may just want a family member to take over your online sites. If that is the case, make those wishes known ahead of time so as not to shock anyone who may otherwise be unaware of your business or your needs.
As technology continues to interweave with our personal life, it is becoming increasingly important to included digital assets into ones will and living trust.