An Arkansas living trust allows you to transfer your assets into a legal creation called a trust as part of your estate planning process. The trust takes legal control of your assets, but you are able to continue to use them during your lifetime. Once you die, the assets in your living trust Arkansas, are passed via the trust to the beneficiaries you have named. Trusts provide a wide range of benefits, making them attractive as an estate planning tool.
Living Trusts in Arkansas
The person creating a living trust in Arkansas is known as the grantor. Assets are placed into the trust and are managed by the person chosen as trustee. The trustee is often a person close to you, a company that specializes in trust management, or can even be yourself. If you name yourself as trustee when creating a living trust in Arkansas, you will need to also choose a successor trustee who will handle the trust after your death. The assets that you place in the trust are distributed to your beneficiaries, whom you choose, after your death. A revocable living trust can be altered or cancelled by you at any time during your life while an irrevocable living trust cannot be changed in any way.
Creating a living trust in Arkansas allow you to pass on your assets without having to go through the probate process. Arkansas has not adopted the Uniform Probate Code, so its state procedures are not simplified. If your assets pass via your will or through the state intestacy statutes, there is a delay as the court approves the process. A trust allows a speedy transfer of assets. The probate process can be expensive, with executor and attorney fees you will have no control over.
In Arkansas, assets placed in a trust count towards a spouse’s elective share of an estate. When a spouse dies, the surviving spouse has a right to take a specified percentage of the estate, even if he or she is not mentioned in the will. Living trust assets are considered part of the estate for this purpose in Arkansas, so they are not shielded.
Do I Need a Living Trust in Arkansas?
Creating a living trust in Arkansas is always optional, but living trusts are appealing because of the many benefits they provide. A living trust gives you control over how and when your assets pass to your beneficiaries. The trust can distribute them during your life, after your death, or at specific dates or events of your choosing. A trust also gives you the power to choose which assets you wish to include in the trust and to whom you wish to leave them.
Because your trust assets do not pass through probate, the entire trust and its terms remain completely private. There is no public record of what you placed in trust or who you gave it to. Because assets are not held up in probate, they can be distributed immediately upon your death if you so choose without any delay.
An additional protection offered by living trusts is that since most or all of your assets are placed into the trust, if you become disabled or incapacitated later in your life, your assets are already being managed for you. This can provide peace of mind and financial security.
Living Trusts and Estate Taxes in Arkansas
Arkansas does not have a state estate tax, but federal estate tax laws apply. There is currently more than $5 million exempted per person, but if an estate is larger than this, taxes can be avoided if property is placed in an AB trust, also known as a QTIP or marital trust, in which property passes from one spouse to the next. A living trust does not protect assets from Medicaid in any way.
How to Create a Living Trust in Arkansas
When you make a living trust in Arkansas, you sign a trust document that includes all of the details about your trust, beneficiaries and trustee. The document is signed in front of a notary. Once the trust is set up, it is funded by transferring ownership of assets into the trust. It takes effect immediately.
A living trust can be an important part of your estate planning and offer great peace of mind.
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