When a loved one passes away, his or her estate often goes through a court-managed process called probate or estate administration where the assets of the deceased are managed and distributed. If the assets of the deceased were owned through a well drafted and properly funded living trust, it is likely that no court-managed administration is necessary, though the successor trustee needs to administer the distribution of the deceased’s assets. The length of time needed to complete the probate of an estate depends on the size and complexity of the estate and the local rules and schedule of the probate court.
The probate process for each estate is unique, but usually involves the following steps:
A Will contest is a lawsuit that is brought to challenge the validity of a Last Will and Testament. Will contests often happen when an heir or family member believes some inequity has occurred in the Will. You cannot contest a will solely because you think the distribution is unfair. A will can be contested only in certain circumstances; there must be evidence that something is wrong with the will. The following are the situations in which a will may be contested:
Mental incapacity: You may contest a Will if you believe your loved one did not have the mental capacity to write the Will.
Undue Influence: If you believe another person exerted undue influence over your loved one and induced your loved one to change the distribution under his or her Will, you may contest the will based on undue influence. Generally, the person contesting the Will is required to prove the person exerted undue influence. However, if the person had a fiduciary relationship with your loved one, that person may have to prove that there was no undue influence. People who might have a fiduciary relationship include a child, a spouse, or someone with a power of attorney.
Fraud: Arguing your loved one was fraudulently induced into signing his or her Will is another way to contest a Will. Fraud occurred if your loved one signed a will without realizing it was a Will. It could also happen if someone gave your loved one misinformation that caused him or her to change the distribution in the Will.
Not Executed Properly: Finally, a Will may be invalid if it was not executed properly. In Arkansas the signing of the Will must be witnessed by two independent witnesses, If the document was not witnessed properly, it may be invalid.
Probate administration is required only for property owned by an individual at death, where it is necessary to “prove” who is entitled to that property as a result of the owner’s death. For example, property transferred by an individual during life to a Revocable or Irrevocable Trust would not be subject to probate. Similarly, property owned jointly with someone else as tenants by the entireties property, or property owned as joint tenant with right of survivorship with another surviving individual, is not subject to probate. Property passing by a valid beneficiary designation, such as a life insurance death benefit for a policy insuring the decedent or the balance of property in an IRA or similar retirement account, will avoid probate. Finally, assets that are subject to some form of Transfer on Death or Pay on Death designation, will not be subject to probate if the designated beneficiary or beneficiaries are then living.
Yes. Executors are reimbursed for all legitimate out-of-pocket expenses incurred in the process of management and distribution of the deceased’s estate. In addition, Arkansans has statutory fees as follows: in the court’s discretion it can award up to ten percent (10%) of the first one thousand dollars ($1,000), five percent (5%) of the next four thousand dollars ($4,000), and three percent (3%) of the balance of the value of the personal property passing through the hands of the Executor. When the Executor administers real property the court will award reasonable compensation based on those services. The Executor has to fulfill his or her fiduciary duties on behalf of the estate with the highest degree of integrity and can be held liable for mismanagement of estate assets in his or her care. It is advised that the Executor retain an attorney and an accountant to advise and assist him with his or her duties.
The cost and duration of probate will vary depending on a number of factors. For example, the value and complexity of the estate, the existence of a Will, and where the real property owned by the estate is located. If there is a Will contest or disputes with alleged creditors it can add significant cost and delay. Common expenses of an estate include executors’ fees, attorneys’ fees, accounting fees, court fees, appraisal costs, and surety bonds.
For the legal services Arkansas law provides the attorney, unless otherwise contracted with the personal representative, heirs, and beneficiaries of the estate, shall be allowed a fee based on the total market value of the real and personal property reportable in the circuit court, as follows: (A) Five percent (5%) of the first five thousand dollars ($5,000); (B) Four percent (4%) of the next twenty thousand dollars ($20,000); (C) Three percent (3%) of the next seventy-five thousand dollars ($75,000); (D) Two and three-fourths percent (23/4%) of the next three hundred thousand dollars ($300,000); (E) Two and one-half percent (21/2%) of the next six hundred thousand dollars ($600,000); and (F) Two percent (2%) of the value of all properties thereafter.
Small Estate laws were enacted in Arkansas in order to allow heirs to receive the property that the deceased wanted them to have without the long process of probate. In Arkansas, you may be able to avoid the probate process or at least shorten the process if certain conditions are met. These conditions include:
You must file an Affidavit for Collection of Small Estate with the probate clerk of the circuit court in the county where the deceased last lived. The affidavit can be filed by one or more of the people receiving proceeds from the estate (called distributees). The affidavit must state, among other things, that the conditions in the previous section are true.
After you file the affidavit with the probate clerk, the clerk will sign the affidavit and place her seal on it. You can then provide a copy of the affidavit to financial institutions or other persons or entities that have property of the deceased.