This myth keeps too many people from receiving the legal and practical guidance they need to plan for the future. Everyone should have a will, an advanced care directive, and powers of attorney, at the very least. Depending on your circumstances, your family may benefit from a trust or other legal tools that help your family know what to do during tough times.
To learn more about estate planning in Arkansas and get help drafting these documents based on your wishes, call a local estate planning attorney right away. These can be difficult conversations to have with your family; however failure to prepare could cause more harm to your family in the long run. The Law Group of Northwest Arkansas LLP will get you started thinking about what you want and the best way to achieve that. You can reach out through our online form or call (479) 316-3760 to set up an initial consultation.
How We Can Help
Our team at The Law Group of Northwest Arkansas LLP can help you with:
- Advanced Care Directives
- Powers of Attorney
- Probate Administration
- Business Succession Planning
Everyone Needs a Will
Everyone, no matter how minimal your property, should have a will. A will is a legally binding document that tells whoever handles your estate how to pass on your money and property. You may gift your belongings to individuals or request they be sold or donated. Without a will, your property is divided based on state law instead of your wishes.
While you will still have to go through the probate process if you have a will, it will make the process much smoother. In probate, a court oversees the handling of your estate: any debts you have are paid off with the assets of your estate, and everything that is left over is then distributed to your heirs pursuant to the directions you’ve given in your will. This process is overseen by a personal representative, who handles the filing and administration of your estate. If you do not have a will, the laws of the state take over: this can result in religious organizations, charities, friends, extended family, and even your spouse, from receiving assets in the way you would desire. Having a will makes this process much smoother and ensures your wishes are carried out.
Creating a Valid Will
Creating a valid will is simple, but the court will not accept it if you do it wrong. To create a valid will, you must declare in front of at least two witnesses that you intend for the written document to be your will and then sign it in front of them. Then, your witnesses sign it, too.
Your witnesses should be disinterested, which means they should not be someone who receives money or property through your will.
You may wonder whether you can write down your will without witnesses. A handwritten will is called a holographic will. For a court to find it valid, there must be three disinterested witnesses familiar with your handwriting to testify that the document is authentic. The entire document must be in your handwriting: it is not enough to type up what you want and then sign it.
Changing Your Will
You can change your mind and your will. But doing so is not always straightforward. It is best to work with a lawyer if you want to create a new will or make specific changes to your current will. An attorney can explain your options, such as revoking an old will to create a new one or adding a codicil (an amendment) to your current will. A codicil can change a certain provision in your will or add a new provision.
When Is it Right To Establish a Trust?
Estate planning is broadly divided into two categories: wills and trusts. They can also be described as “pay me later” versus “pay me now”: while a will is cheaper to create, your estate will still need to go through the probate process. That process takes time, and the associated fees and costs must be paid by your estate, and can run anywhere from one to ten percent of the total value of your estate. By contrast, a trust is estate planning that allows far greater control over the timing of the distribution of your assets: while you pay that cost up front to have a trust drafted for you, the costs of running the trust after your death are far, far smaller.
A trust is a legal tool you can use to pass on money or property to another person directly and, in some cases, avoid taxes. A trust helps your beneficiaries receive the money or property sooner than through a typical will and the probate process: while the probate process can result in it taking months (or even longer) to distribute your property to your heirs, a trust allows for your assets to be distributed in weeks or even days after your death.
There are several types of trusts, which fall into two categories:
- Living Trusts: This is a trust created and used while you are alive.
- Trusts: This is a trust created at the time of your death based on what you write in your will.
A living trust can be revocable, which means you can change it during your life, or irrevocable, which means it is nearly impossible to change or take back during your life. Many people benefit from establishing revocable trusts during their life as part of their estate plan. People use irrevocable trusts less often, but they can help minimize estate taxes.
If you have a sizeable estate and are worried about the tax consequences for your family after your passing, talk with an estate planning lawyer in Fayetteville, Arkansas. We are familiar with Arkansas trust laws and advise you on whether any type of trust might work well for your estate plan.
The Importance of Advanced Care Directives and Powers of Attorney
In the future, you might get hurt or become sick and unable to make decisions for yourself. When you cannot decide for yourself or express what you want, it helps if you have a way to let your family know what to do. That is what advanced care directives are for. An advanced care plan, which also might be called a living will, tells your family members and doctors what type of care you want to receive – or not receive – if an illness or injury hinders you.
Powers of attorney give another person the power to implement your wishes or make decisions for you.
Types of powers of attorney include:
- Durable power of attorney: This type of power of attorney goes into effect when you cannot manage your own money or property.
- Durable power of attorney for healthcare: This type of power attorney makes health care decisions for you when you cannot.
Your designated power of attorney can have general or limited/special powers. General powers mean they can broadly make decisions for you.
Limited or special powers gives the person the right to make decisions in specific situations or transactions.
Planning for Your Business To Continue
Do you own a business? What will happen to it if you become incapacitated or when you pass away? These are tough questions. You’ve worked hard to establish your business, and may want to pass that business on to family members or partners to ensure your legacy is protected and operations do not cease simply because you are unable to continue to run the business. We recommend you talk with an Arkansas estate planning lawyer about succession plans if you want your business to continue. We can help you create or update documents that prepare for the transfer of ownership in the future.
Help With the Probate Process
When someone passes away, the family files a petition with the probate court, which is the court that oversees the administration of the estate or execution of the will. You will let the court know whether there is a will or not, and then the personal representative or administrator of the estate can receive powers from the court.
Whether there is a will or not, the executor is responsible for making an inventory of the estate’s debts and assets, giving creditors notice and paying any valid debts, paying any necessary taxes, valuing property, and making the final distribution to the beneficiaries or heirs.
The probate process can last less than a year or several years, depending on the estate’s complexity and whether anyone objects to the will. We highly recommend you work with an attorney after a loved one passes away. At The Law Group of Northwest Arkansas LLP, our team knows the probate court process. We can handle the court documents and answer your questions.
One of the benefits of estate planning is that you can create a situation that lefts your family avoid a lengthy and contentious probate process. If you have things planned well, a great deal of property can transfer directly to your intended beneficiaries, and your representative can sort out the rest based on your will.
Property can transfer directly to beneficiaries based on:
- Owning property together (joint tenancy or tenancy by the entirety)
- Payable-on-death designations on bank accounts
- Transfer-on-death registration for stocks, bonds, and other securities
- Transfer-on-death deeds for real estate
Small Estate Administration
Your family may be able to avoid a more complicated probate process if your loved one’s estate is worth less than $100,000 and there are no known unpaid claims against your loved one’s estate. This is through what is known as a small estate probate. At least 45 days after your loved one’s death, if the court has not appointed a personal representative or there is no petition pending, you can file an Affidavit for Collection of Small Estate with the clerk. Once signed and sealed, the affidavit will give you the power to handle the property and money your loved one left behind. We would recommend that you still hire an attorney for assistance in navigating this option.
Call a Fayetteville Estate Planning Lawyer for Help
It is scary to look ahead. No one wants to think about what it might be like for their family when they are sick, injured, or gone. But it is essential. You need to consider what you want and how to communicate that to your family. By working with estate planning attorneys for Arkansas, you learn more about your options and the different ways you can make your wishes happen. You also can make things much easier on your family when they are hurt and grieving. It is simple and easy to do: the fact that you’re reading this right now puts you far ahead of other people and represents an important first step in making sure your property is handled the way you want when you pass away. We are ready and willing to take the next steps with you, and for our experience to make it as easy as possible. To schedule an estate planning consultation, call (479) 316-3760, or use our online form.