Estate Planning as a Legal Safeguard

Estate planning is a critical process that ensures your financial, medical, and personal affairs are administered in accordance with your wishes during any periods of incapacity and after your death. For Arkansas residents—including blended families, business owners, and even individuals with modest estates—a well-drafted estate plan can be beneficial, minimizing court involvement, streamlining asset distribution, reducing delays, and providing clarity to loved ones during times of uncertainty.

The essence of estate planning is maintaining control by designating who will make decisions on your behalf, who will receive your property, and how those decisions will be implemented. Without such a plan, state law will dictate the outcomes.

What Is Estate Planning?

An estate plan is a legally binding set of documents and instructions governing the management and disposition of your assets, the appointment of fiduciaries, and the delegation of authority in the event of incapacity. At a minimum, it typically addresses:

• Distribution of property upon death;
• Appointment of personal representatives, trustees, and guardians;
• Delegation of authority for financial and medical decision-making during incapacity; and
• Provisions to streamline or avoid probate proceedings.

Arkansas law recognizes holographic wills (i.e., will which are entirely handwritten and signed by the testator) if supported by testimony from three disinterested witnesses who can attest to the handwriting and signature of the testator. However, most practitioners recommend a typed will executed with two witnesses and utilizing self-proving affidavits to help ensure the admission of the will and a smoother probate administration.

Essential Steps In Estate Planning In Arkansas

1. Information Gathering and Objective Setting
   • A sound estate plan starts with a complete picture of your assets, goals, and family dynamics. . You should inventory all assets—including financial accounts, real property, life insurance, retirement plans, business interests, and tangible personal property—along with liabilities and obligations. You should then identify intended beneficiaries, fiduciaries (i.e., executors, trustees, guardians), and succession preferences for business or investment interests. A consolidated record of account details and advisor contacts is helpful to those assisting you in implement your estate plan and, later, to those who charged with carrying it out.
2. Execution of a Last Will and Testament
   • A will should, at a minimum, direct the disposition of probate assets and nominate a personal representative who will be responsible for probate administration. Care must be taken to ensure the will is valid and can be easily located by the appointed personal representative upon your death. Absent a will, state intestacy statutes will determine distribution of probate assets, often contrary to the decedent’s intentions.
   • Key formalities include:
     • Execution (or acknowledgment of prior execution) in the presence of two competent witnesses;
     • Witnesses signing in the testator’s presence;
     • Execution of self-proving affidavits (not required but recommended).
   • A will may also nominate guardians for minor children, though the court retains ultimate authority to confirm the appointment. Supplementary “letters of instruction” may provide practical guidance but generally do not carry legal authority unless certain statutory requirements are met.
3. Establishing Trusts Where Appropriate
   • A revocable living trust can provide continuity of property management, protect privacy, and help avoid probate, but only if the trust is properly funded (i.e., assets are titled in the trust’s name during the settlor’s life or payable to it upon the settlor’s death). A pour-over will is often used as a safeguard to capture any assets inadvertently omitted from the trust.
   • Irrevocable trusts can be useful for tax planning, asset protection and even Medicaid eligibility, but they often involve significant restrictions on control and involve careful advanced planning in order to achieve the intended benefits. For example, transfers of property to an irrevocable trust may be subject to a 60-month look-back period under Medicaid transfer rules, which can impact the transferor’s eligibility for benefits. Professional counsel is essential to navigate these complexities.
4. Executing Powers of Attorney and Health Care Directives
   • Durable Financial Power of Attorney: Authorizes an appointed agent to manage assets and property during incapacity. Deed execution authority may require county-level recording.
   • Health Care Power of Attorney and Advance Directive: Designates a surrogate decision-maker for medical decisions and outlines treatment preferences. Arkansas law generally requires this instrument to be notarized or witnessed by two disinterested adult witnesses.
   • HIPAA Authorization: Ensures fiduciaries have access to necessary medical information.
5. Reviewing Beneficiary Designations and Title Forms
   • Assets such as life insurance policies, retirement accounts, and other payable-on-death accounts are not probate assets and transfer by contractual designation, rather than as provided in your will. Titling choices (e.g., joint tenancy with right of survivorship, tenancy by the entirety) have significant legal implications and should be reviewed in light of Arkansas property law to ensure they are consistent with the property owner’s intent.
6. Planning for Incapacity and Long-Term Care
   • Medicaid eligibility requires careful planning because of applicable income and asset limitations. Transfers of property made within 60 months of application for Medicaid benefits can trigger a penalty period, delaying eligibility for benefits, and income caps for certain programs may call for additional planning (potentially necessitating a Qualified Income Trust, also known as a Miller Trust). Poorly structured transfers or trust contributions can jeopardize eligibility and should always be reviewed with counsel.
7. Proper Execution, Storage, and Communication
   • Adherence to statutory execution requirements is essential for the validity of key documents. Original estate planning documents should be stored securely, but the location should be known by and accessible to fiduciaries. Agents and medical providers should have copies of health care directives, HIPAA authorizations, and powers of attorney. Maintain an up-to-date fiduciary contact list.
8. Periodic Review and Updating
   • Reassess your plan every three to five years or after significant life events (marriage, divorce, birth, death, business sale, or relocation). Update beneficiary designations, asset titles, and fiduciary appointments as necessary.

Avoidable Errors and Best Practices

Common estate planning missteps include:

• Failure to fund a revocable trust;
• Misunderstanding the legal effect of beneficiary designations;
• Omission of successor fiduciaries;
• Inaccessibility of key documents;
• Use of noncompliant or generic forms.

Advanced Considerations

Digital Assets

Arkansas has enacted the Revised Uniform Fiduciary Access to Digital Assets Act, permitting fiduciary access to digital accounts if authorized in your estate planning documents. Consider utilizing each platform’s built-in legacy tools, which may override provisions in your estate plan.

Minor Beneficiaries

Planning for the care of minor beneficiaries is twofold and requires consideration of both a physical guardian and a guardian of the minor’s property. Although the court must formally confirm any guardianship, your nomination carries significant weight in that process. Options for managing a minor’s inheritance include appointing a testamentary trustee to hold property on the minor’s behalf, creating a revocable trust during your lifetime, or utilizing the Arkansas Uniform Transfers to Minors Act.

Probate-Avoidance Strategies

• Beneficiary Deeds: Allow real property to transfer immediately upon the property owner’s death and, therefore, avoid probate. However, to be effective, the beneficiary deed must be recorded before the death of the owner.
• Small-Estate Administration: Available for certain estates involving property not exceeding $100,000 in value (excluding homestead and exempt property) after a 45-day waiting period.

Medicaid Planning

Because of look-back rules, income caps, and potential penalties, Medicaid planning requires early and strategic action. Creation and funding of irrevocable trusts and other asset transfers must be coordinated with your overall estate and tax objectives.

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Contact RMP Law Today

Main RMP Number: 479-443-2705

Bentonville – 479-553-9800
Jonesboro – 870-394-5200
Little Rock – 501-954-9000

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When to Retain Legal Counsel

Engage legal counsel if you:

• Own multiple properties or a business;
• Have a blended family or special needs beneficiary;
• Desire to avoid probate, particularly in a complex estate; or
• Are planning for Medicaid eligibility or long-term care financing.

Protecting Your Legacy with RMP Law

A well-structured estate plan is more than a set of documents—it is a carefully designed plan that protects your interests, preserves your wealth, and provides certainty for your loved ones. At RMP, we advise clients on wills, trusts, planning for incapacity and long-term care needs, and probate administration.To discuss your estate planning goals, contact us at 479.443.2705 or visit rmp.law. A brief consultation can clarify your options and set the foundation for a plan tailored to your objectives.

DISCLAIMER: The information provided on this website does not constitute legal advice. Instead, all information, content, and materials available on this site are for general informational purposes. Information on this website may not constitute the most up-to-date legal or other information. Readers of this website should contact their attorney to obtain advice with respect to any particular legal matter.