Our Attorneys Help You Protect Your Assets for Future Generations
Everyone needs some type of estate planning document. Wills, trusts, living wills, healthcare proxies, durable powers of attorney, advanced healthcare directives, designation of guardian, beneficiary deeds and other documents are all types of documents which can be used to give you control of your affairs and advise your family members and others of your desired wishes at the end of life and to make clear how you wish for your assets to pass after death or disability. Numerous problems can be anticipated and thus, often, avoided for the young and old.
A will is a document, known historically as a testament, that declares your intent as to how you want your assets and property to be passed upon your death. It can include who you do not want to have property even if the person or persons are your next-of-kin and thus are your heirs at law. There are exceptions for spouses to the rule as to exclusion.
A will allows you to determine who will be in charge of administering your estate and can provide for the payment of your last expenses and other related matters. Wills are administered according to your directions and the probate code and other applicable laws. Thus, wills are filed of record with the Probate Clerk and the validity is determined and then followed as directed and allowed by law. This can be a lengthy process as there are certain waiting periods that must be followed before the estate can be conveyed.
First and foremost there is a requirement that creditors and potential creditors of the estate must be notified of the death of the maker of the will, known as the decedent, in order to make claims for payment of debts before property can be distributed. This period is six (6) months in Arkansas.
Other rules must likewise be followed making for further delays. There are ways to minimize these delays with agreement of the involved heirs and beneficiaries the most important aspect. The filing of a will in a probate court makes the document a public record. It requires the filing an inventory of the assets and liabilities of the estate which goes in to the public record. For these reasons a trust can be more efficient and desirable.
A Trust is often called a “living trust” because it is set up during the life of the maker, known as the Settlor or Grantor, and can carry on business during the lifetime of the maker and does not only come into play upon the death of the maker of the Trust.
Another benefit of the Trust is that it marshals all of the assets of the decedent into one document to be administered at the same time. It is managed and handled privately in most cases. Usually the only need to make a public record is where there is litigation or the Trust is silent on a term which needs to be determined by a court.
One of the most important aspects is that it provides for much faster distribution of assets to the beneficiaries and also allows for some control the manner and timing of distributions. Alternatively, assets may remain in trust until such time as the maker or set more wishes for the beneficiaries to receive them and not all at once.
In some cases a trust may reduce or eliminate estate taxes. Tax advice will help determine which is the best way to establish the Trust to accomplish this.
A simple Trust can be relatively inexpensive to set up and maintained for smaller states. Most trusts are revocable and can be amended at any time and may be counseled out right at any time prior to the Settlor termating it.
A Trust can prevent the court from requiring a guardianship proceeding to be required to control assets going to minors. Likewise, a special needs trust can provide for dependence and family members with special needs. Usually this is done to prevent the beneficiary from losing all public assistance benefits for inheriting under a Trust or Will or any windfall received.
In larger states or where there are commercial interests or businesses to run a corporate entity can be utilized to manage the trust assets until distribution. In those cases the assets of the Trust were managed by the corporate trustee in accordance with certain probate statutes to ensure safeguarding the property of the estate and maximizing the value of assets.
When a person makes a Trust all of the assets are removed from individual ownership by the maker and conveyed into the new entity. As such, they are no longer the individual owner of the assets but, rather, may retain control by naming themselves the initial Trustee of the Trust.
A Trust can be Revocable or Irrevocable. As the name implies with an Irrevocable Trust, the owner may change the trust, add to it, take away property from it or terminate it as desired. An Irrevocable Trust permanently conveys the asset out of the hands of the maker so that they may no longer have any control but is utilized, primarily, for tax avoidance purposes or to allow for receipt of public assistance in the future after a proposed look back period, usually deemed to be five years.
Contact our office today to let us evaluate your situation and wishes to help you determine which estate planning route is best for you.
After a person dies the property of the estate is managed in what is known as an “Administration” of the estate. If there is a Will, this is done to the probate court according to the terms of the Will, if valid. If there is no Will it is done according to statutory law.
Most Trusts provide for the distribution of assets after the death of the Settlor but it may allow for holding the property to be managed for a time for later distribution. The person managing and administering the estate is known as the Trustee. This may be one person or more people or may be a corporate entity also known as a corporate fiduciary.
By statute, the person who administers the will must post a bond equivalent to the value of the assets of the estate unless the will specifically requests that the person handling the administration known as the Executor (male) or Executrix (female) serve without bond. Historically the terms executory and executrix were used and reflected the gender of the person. The more modern terminology uses the term “Personal Representative” to avoid gender distinctions.
Our team of attorneys are experienced in managing and administering wills and trust can guide you through this complicated process. Call our office today for an appointment.
If you have questions about whether a trust or will is right for you, or if you have other estate planning concerns, contact our office to set an appointment for a consultation.
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