Arkansas Inheritance Laws

Acquiring assets such as money, property, valuables, and vehicles involves significant effort and resources. Recognizing this, individuals and families should prioritize creating a will, a crucial document that safeguards against unforeseen events, particularly death. Though seemingly simple, a will possesses significant power, dictating the distribution of assets and the designation of beneficiaries. Additionally, for testators with minor children, a will allows for the appointment of a legal guardian.

However, even with a valid will, family conflicts or disputes may arise, often fueled by greed. The case of Stan Lee, the renowned creator of Marvel Comics, exemplifies this. Upon his passing in 2018, Lee's $50 million estate became the subject of an extensive legal battle between his daughter, J.C. Lee, and his former business partners. Accusations of elder abuse, intellectual property theft, and exploitation for financial gain were levied against both parties.

Individuals without a will are particularly vulnerable to such disputes. In cases of intestacy, the legal term for dying without a will, the testator's estate reverts to the state if family members fail to probate the will within five years or the deceased did not leave anything for their children or loved ones. This emphasizes the role of a will in protecting the financial future of loved ones and ensuring their rightful inheritance.

With that in mind, this article aims to provide valuable guidance to heirs, assisting them in determining their eligibility for an estate share. Moreover, it explores the legal implications of having and not having a valid will within the context of Arkansas state law.

What Happens if Someone Dies With a Will in Arkansas?

In Arkansas, upon the passing of a loved one with a will, the appointed personal representative or trustee assumes the responsibility of managing the deceased's estate. This process requires prompt attention and involves several key steps:

Immediate Actions

• Contact family, friends, and colleagues: Inform the deceased's immediate family, close friends, employer, and business colleagues of their passing.

• Arrange funeral services: Collaborate with a funeral director to discuss and arrange funeral or memorial services.

• Obtain death certificates: Request multiple copies of the deceased's death certificate for legal purposes, life insurance companies, and employers.

• Gather important documents: Locate and secure the deceased's vital documents, including their will, financial records, property deeds, and insurance policies.

• Consult an attorney: Schedule a consultation with a lawyer specializing in estate planning and probate to discuss legal obligations, tax implications, and the need to open a formal probate estate.

• Track expenses: Maintain a detailed record of all estate-related costs incurred by the personal representative and family members for future tax reporting.

Essential Notifications

• Employee benefits and insurance companies: Inform the deceased's employee benefits office and insurance company of their death, providing their date of death and Social Security number.

• Social Security Administration: Notify the Social Security Administration of the deceased's passing. Family members may visit a local Social Security office for immediate claim processing.

• Department of Veterans Affairs (if applicable): If the deceased was a military service member, contact the Department of Veterans Affairs to inquire about potential disability or death benefits for eligible family members.

Family members must avoid entering into contracts or making significant financial decisions during this emotional time. Sound legal counsel can help them navigate the estate administration process effectively and ensure the deceased's wishes are carried out with respect and care.

Valid Wills

While creating a will is essential for estate planning in Arkansas, note that not all wills are valid. The state recognizes two types of valid wills:

• Written will: This is the most common type and is typically drafted by the testator's legal professional. It ensures the will complies with all legal requirements and accurately reflects the testator's wishes.

• Holographic will: This handwritten document is entirely written and signed by the testator. For validity, it requires the attestation of three disinterested witnesses familiar with the testator's handwriting. After confirming the handwriting's authenticity, the holographic will undergo the probate process, which can last anywhere from nine months to three years.

Non-probate Assets

Arkansas individuals must remember that not all assets must go through the probate process. Here are some examples:

• Jointly owned and payable-on-death bank accounts: These automatically pass to the surviving owner(s) upon the deceased's death.

• Life insurance policies with designated beneficiaries: The designated beneficiary receives the death benefit directly, bypassing probate.

• Vehicles with transfer-on-death registration: The designated beneficiary receives the vehicle title automatically upon the deceased's death.

• Property held in a living trust: Assets placed in a living trust are distributed according to the trust terms and avoid probate.

• Real estate held by a TOD or beneficiary deed: Similar to TOD vehicles, the designated beneficiary inherits the property automatically.

• Property passing to a spouse by "dower and curtesy": Arkansas law grants surviving spouses specific rights to inherit certain property without probate.

To determine which assets are subject to probate, seeking advice from a qualified attorney in Arkansas is highly recommended.

Contesting a Will

Under Arkansas law, individuals with legal standing, such as potential heirs, beneficiaries, and creditors, have the right to contest a will. This right exists when they have reason to believe the will is invalid due to:

• Fraud or forgery: This involves misrepresenting the deceased's intentions or creating a fake document.

• Lack of testamentary capacity: This means the deceased lacked the mental capacity to understand and create a valid will.

• Undue influence: This occurs when someone exerts pressure or manipulates the deceased into creating a will that does not reflect their true wishes.

• Mistakes: These include errors in the will's content or its creation process.

• Revocation: This occurs when the deceased formally cancels a previous will.

• Noncompliance with statutory procedures: This means the will fails to meet legal requirements, such as proper signing and witnessing.

Individuals wishing to contest a will must file a written objection with the county court before the probate hearing takes place. This ensures a timely resolution and prevents the distribution of assets based on a potentially invalid will. Note that the will itself must be submitted to the probate court within five years of the deceased's death.

What Happens if Someone Dies Without a Will in Arkansas?

As mentioned earlier, in the absence of a valid will, Arkansas utilizes intestacy laws to determine the distribution of a deceased individual's assets. These laws establish a clear framework for the court to identify and apportion assets to rightful heirs or beneficiaries. However, only assets solely owned by the deceased at the time of their death are subject to this process.

Following the court's appointment of an estate administrator, the probate process commences. Typically, administrators collaborate with legal counsel for the following key responsibilities:

• Heir notification: The administrator must notify all statutorily designated heirs of the decedent's passing. This notification may involve publishing an announcement in a local newspaper to inform potential creditors.

• Asset distribution: After settling all outstanding debts, taxes, and administrative fees, the remaining estate assets are distributed to the designated beneficiaries.

• Debt payment: The administrator utilizes estate funds to settle the deceased's financial obligations, including outstanding loans, credit card bills, and medical expenses.

• Estate inventory: The administrator meticulously compiles and appraises all assets owned by the deceased at the time of death. This comprehensive inventory is subsequently submitted to the court for review.

This process ensures that the deceased's assets are distributed fairly and efficiently, even without a will. Individuals must understand the intestacy laws to ensure that their wishes are respected and that their loved ones are protected in the event of their passing.

Spousal Rights

In Arkansas, surviving spouses may inherit a portion of their deceased partner's assets, even if a will is not present. The extent of inheritance depends on the duration of the marriage:

• Marriage lasting at least three years: The surviving spouse inherits the entirety of the deceased's estate.

• Marriage lasting less than three years: The surviving spouse inherits one-half (50%) of the deceased's estate.

Furthermore, Arkansas adheres to the community property inheritance system. This means that all property acquired during the marriage is presumed to be jointly owned by both spouses, regardless of who holds the legal title. As a result:

• If the deceased and their spouse have no children or other descendants, the surviving spouse automatically inherits the deceased's entire community property share, including both personal and real estate holdings.

• Any property owned solely by the deceased (separate property) is distributed based on the laws of intestacy, which dictate inheritance to surviving family members in the absence of a will.

This inheritance framework helps ensure financial stability for surviving spouses and reflects the shared nature of assets acquired during a long-term marriage.

Children’s Rights

In Arkansas, when an individual dies without a will (intestate), their children inherit a share of their property. Each child's specific share depends on the number of surviving children. However, to be eligible for this inheritance, the child must be legally recognized by the state.

Children who are eligible for an intestate share include:

• Adopted children: They have the same inheritance rights as biological children.

• Posthumous children: Children conceived by the deceased before their death but born afterward are also entitled to a share.

• Children born during a marriage: Children born within a valid marriage are presumed to be the deceased's biological offspring and inherit accordingly.

• Children born outside a marriage: These children can inherit if the deceased later marries their mother or acknowledges their paternity in writing. The court may also establish paternity through legal proceedings.

• Children born through artificial insemination: If the deceased consented to artificial insemination to establish a parent-child relationship, the resulting child inherits as a legitimate child.

Know that foster children and stepchildren who are not legally adopted do not automatically inherit a share of the deceased's estate.

The Rights of Other Surviving Relatives

Under Arkansas intestate succession laws, when an individual passes away without a spouse or children, their surviving relatives may inherit their estate. The distribution of assets follows a specific order of precedence:

1. Parents: If the deceased has surviving parents, they inherit the entirety of the estate.

2. Siblings and their descendants: In the absence of surviving parents, the deceased's siblings and their descendants inherit the estate in equal shares per stirpes. This means each sibling receives an equal share, and the descendants of any deceased siblings divide their deceased parent's share equally.

3. Uncles, aunts, and great-grandparents: If no parents or siblings survive, the deceased's uncles, aunts, and great-grandparents inherit the estate in equal shares per capita. This means each surviving relative receives an equal share, regardless of their relationship to the deceased.

Estates With No Heirs

In Arkansas, when an individual dies without a valid will, intestacy laws determine the distribution of the estate. As previously discussed, these laws establish a predetermined hierarchy of inheritance, specifying which relatives inherit and the proportion they receive. 

Notably, these laws do not currently include provisions for allocating any portion of the estate to charitable organizations or friends in the absence of surviving family members. Therefore, if an individual without a will dies without immediate family, their entire estate will be distributed according to the established intestacy order, ultimately reverting to the state if no eligible heirs are identified.

How to Make a Will in Arkansas

In Arkansas, citizens must be at least 18 years old and of sound mind to create a valid will. This requirement reflects the seriousness of drafting a will, which determines how assets will be distributed to designated beneficiaries or heirs upon the testator's death.

Here is a checklist for making a will:

• Identify beneficiaries: Determine who will inherit which assets.

• Choose a guardian for minor children: Select a responsible individual to care for minor children.

• Appoint a property manager: Designate someone to manage the children's assets.

• Choose an executor: Select a trustworthy individual to handle the estate administration.

• Sign the will in the presence of witnesses: Ensure the will is signed and witnessed according to legal requirements.

• Store the will securely: Choose a safe location for storing the will.

By following these steps, individuals can create a valid will that ensures their wishes are respected and that their loved ones are protected.

Unique Situations in Arkansas Inheritance Law

In Arkansas, inheritance rights are not determined by immigration status. Thus, even if a deceased person's relative does not reside in the state or the United States, they can be eligible to inherit a portion of the estate.

One unique aspect of Arkansas inheritance law concerns individuals convicted of murdering the decedent. In such cases, the law prohibits the individual from inheriting any portion of the estate. This principle was established in the 1970 case of "Wright vs. Wright," where the Arkansas Supreme Court ruled that Leslie A. Wright, convicted of killing his parents, was not entitled to any inheritance.

Moreover, Arkansas recognizes the inheritance rights of half-relatives. This means that if the deceased and an individual share a parent, the half-sibling has equal inheritance rights as a full sibling. Posthumous children, including grandchildren born after the grandparent's death, are also entitled to inherit under Arkansas' intestacy laws.

Finally, Arkansas law recognizes the inheritance rights of children raised by LGBTQIA+ parents, whether they were adopted or conceived through artificial insemination. This ensures that all children have equal inheritance rights regardless of the family structure they are raised in.

Does Arkansas Impose Inheritance and Estate Taxes?

No. Arkansas is one of the 38 states with no state-level estate tax. This eliminates the financial burden of inheritance taxes for heirs within the state. However, note that the IRS may levy taxes on income-generating inheritance assets like retirement accounts, IRAs, and 401(k)s.

Furthermore, federal estate taxes remain applicable in Arkansas. Individuals with an estate exceeding the $12.06 million exemption face a potential tax rate of up to 40%, increasing progressively with the estate value. This could amount to millions in taxes.

Social Security income, however, is exempt from taxation in Arkansas. For public or private pensions, the first $6,000 of annual income is exempt for retirees aged 59 ½ or older. Federal tax exemptions also exist, including lifetime and annual gift tax exemptions.

Legal Resources Related to Inheritance Law in Arkansas

Overall, navigating probate, contesting a will, identifying valid documents, and determining eligible heirs in Arkansas can be complicated for individuals and families. As such, several organizations offer valuable assistance to streamline the inheritance process. Here are some resources available to Arkansans:

Arkansas Appleseed Legal Justice Center</h3>

Arkansas Appleseed Legal Justice Center is a nonprofit organization that provides public services to Arkansans. It handles family land matters, helping individuals investigate and address issues related to land ownership and development. The firm especially helps Black landowners in the state. It provides legal guides regarding land use options, title clearance, and estate planning. 

Legal Aid of Arkansas

Legal Aid of Arkansas is a nonprofit organization that caters to low-income individuals in the state. It caters to clients dealing with family law, bankruptcy or eviction, and consumer-related issues. The firm also conducts advocacy work and has justice projects, including Fair Housing Acts and Services. Individuals who want to volunteer may contact Greneda Johnson at gjohnson@arlegalaid.org.

University of Arkansas

The University of Arkansas’ nonprofit clinic offers legal assistance to individuals and families. Its student attorneys represent clients and help organizations file articles of incorporation with the Secretary of State, create bylaws, and file exempt status with federal and state tax agencies. Clients do not need to pay for legal representation provided by the University of Arkansas Law School Legal Clinic. 

Arkansas Bar Association

The Arkansas Bar Association provides legal assistance to families and individuals in the state. It caters to low-income residents, helping them contact probate lawyers to address will or testament disputes. The firm is a private, nonprofit organization with over 5,000 licensed attorneys. It also has disaster legal assistance programs led by the Association's Young Lawyer's Section. The association partners with the Federal Emergency Management Agency to conduct programs.

Central Arkansas Estate Council

The Central Arkansas Estate Council has been helping residents in the state since the 1950s. It has a group of estate planning professionals helping individuals establish their future. The organization consists of private bankers, insurance professionals, attorneys, trust officers, CPAs, and CFPs. It is a member of the National Association of Estate Planners & Councils.