Probate & Estate Administration
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. We understand that in these situations no person wants to hire a probate attorney, but it does make the probate process go a little easier.
What is an Arkansas Probate?
The word “probate” comes from the Latin verb probare, which means “to try, test, prove, or examine.” (H/T to Wikipedia.)
This is important for two reasons. First, it illustrates that probate, much like Latin, is outdated and should never be your go-to solution. Also, the definition is spot-on: Probate will both try you and test your patience. Most people (justifiably) fail the test. It tends to go much faster with an experienced probate lawyer helping guide you through the process.
But what is it? Well, I am glad you asked. In the most simple terms, probate is asking a Court to allow someone else to do something with your stuff after you die. A quick example should help clarify: Leo has a bank account, a mortgage, and a car. While Leo is alive, he can do pretty much whatever he wants with his stuff. All he needs to do is sign. So, if he wants to close his bank account, all he has to do is sign. If he wants to sell his home or put someone else on the title, all he has to do is sign. Likewise, if he wants to put his new wife on the title to his car, he can do that through a signature.
Leo recently passed away in a boating accident. He can no longer sign his name to move his stuff around. If there’s no one who is authorized to do something with his stuff, it would probably just sit there until the rapture—perhaps longer. This is bad because we would rather see that money go toward creditors and college educations and other nice things that keep the economy strong. The Arkansas probate process makes sure that this doesn’t happen by appointing someone who has the authority to sign—again, the dead person can no longer sign. By doing this, the Court is giving that person permission to act like Leo and move stuff around.
There is much more to know about Arkansas probate, but everything else builds off that simple concept: Giving someone the authority to sign on behalf of a dead person.
Other interesting blawgs on topic:
How Long Do You Have to File Probate After Death?
In Arkansas, the short answer is 5 years. (Ark. Code Ann. § 28-40-103). If the person that died was a resident of Arkansas, the time limit to probate a will is 5 years past the date of death. With non-residents, the time limit is more flexible. Any will admitted to probate in another state in a timely manner may be probated in Arkansas at any time if it is being used to probate real property.
What are the steps in the probate process?
The probate process for each estate is unique, but usually involves the following steps:
- Filing of a petition with the proper probate court.
- Notice to heirs under the will or to statutory heirs (if no will exists).
- Petition to appoint Executor (in the case of a will) or Administrator for the estate.
- Inventory and appraisal of estate assets by Executor/Administrator.
- Payment of estate debt to rightful creditors.
- Sale of estate assets.
- Payment of estate taxes, if applicable.
- Final distribution of assets to heirs.
Probate can be a little tricky as you step through the process. We have experienced probate attorneys to serve clients and help fix any legal issue.
Other interesting blawgs on topic:
What happens if someone objects to the will?
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.
Who Inherits if there is no Will?
This is the question no probate lawyer wants to answer. Not because they do not know the answer, but because it always confuses people. Probate lawyers prefer you have an estate plan that spells out your wishes. It makes it easier for your attorney and everyone involved. So, here is the simple explanation (it is more complicated than this, but you need to sit down with one of the many probate lawyers in Pulaski County to figure out your specific situation):
- Have no children and been married less than 3 years? – 1/2 goes to your spouse and 1/2 goes to your parents.
- Have no children and been married more than 3 years? All to your spouse.
- Have children and no spouse? All to your children evenly.
- Have children and spouse? 1/3 to your spouse and 2/3 to your children.
For your children to qualify they just have to be your kids, either blood or adopted. It does not matter if they are minor children or adults. It does not matter if you have different children from different marriages, all your children inherit equally. So long as they are blood or adopted, stepchildren do not inherit. If you want stepchildren to inherit make sure you see an attorney and have an estate plan that does that.
Does probate administer all property of the deceased?
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 (or other estate planning devices) 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. The goal of probate is to transfer assets out of the decedent’s name and to his or her heirs. Sometimes even if there are no assets, you need to open a probate for other reasons. Like a personal injury case, this is sometimes called special administration. Your probate attorney will know when to open this type of probate.
Other interesting blawg topics:
Do I get paid for serving as an Executor?
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.
How much does probate cost? How long does it take?
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.
What does a probate attorney do?
A probate lawyer will look at the estate plan (if there is one) and review the property owned by the decedent. Once the probate attorney has reviewed the estate assets and the probate law they will decide how to move forward with the legal representation. Most probate and estate planning situations are standard, but we like to review all the possible legal issues to provide the best legal representation.
We deal with probate matters on a regular basis and like to be prepared on all of our probate cases to make sure there are no surprises if probate litigation happens. We tried to be ready for any legal issue on all legal matters.
When a legal issue shows up in an estate administration case we try to keep it inside of the probate court. Depending on what kind of legal issues and what law applies (real estate law, estate law, property law, contract law, etc.) we may have to pursue civil litigation. This is information your probate lawyer will help guide you through.
Probate and Estate Planning – Take Care of Both While Alive?
Q: Don’t want your family fighting after you are gone?
A: Probate your estate plan while you are alive.
This process is known as ante-mortem probate. The Arkansas Ante-Mortem Probate Act was passed in 1979. Ark. Code Ann. § 28-40-201 et seq. It provides testators (the people making the Will) the right to go to court during their lifetime and have their Wills validated against challenge. The proceeding allows judicial evaluation of the testator’s capacity, intent, and freedom from undue influence or fraud during the testator’s lifetime, which has the obvious benefit of the presence of the testator at the proceedings. If you are interested in this, contact a probate attorney.
The ante-mortem probate procedure is seldom used. I think to process is going unused mostly because people are unaware they can have their Will probated before their death. It might also be that unpopular because people would rather offend family members after they are dead. It is less confrontational that way. Also, more Arkansans are using living trusts as their main estate planning tool. Wills are effective estate planning tools but must be probated to be effective. Ark. Code Ann. § 28-40-104. Trusts do not have to be probated, so they are much harder to challenge. Whatever your estate planning needs you should discuss them with an attorney.
Small Estate Administration
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:
- The total value of the estate is less than $100,000 and that claims (debts or judgments) against the estate have been paid. There are other exclusions and exemptions from this amount, such as the homestead exemption and spouse and child allowances.
- Forty-five (45) days must have passed since the death before filing the affidavit
- There is not a personal representative of the estate already appointed or a petition for an appointment pending.
How do I use the Small Estate laws?
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.
What happens after filing the affidavit?
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.
Brandon Haubert is an experienced probate lawyer in Little Rock.