Bitcoin and Beyond: Protecting Your Digital Wealth for Future Generations

Limited Liability Companies (LLC's) are a popular business planning structure. Whether you operate a large or small business or own rental property, an LLC may be something you should consider. An LLC is an entity that you obtain through the Secretary of State in the State where you conduct business. An LLC must have its own unique name as well as member(s) and officer(s) who own and control the LLC. The documents to form an LLC are generally prepared by an attorney and consist of Minutes, Agreement to Form, Operating Agreement and Certificates of Ownership. An LLC is beneficial for several reasons. First, and perhaps foremost, is personal liability protection. For example, if your business is formed as an LLC and said business has liabilities (from debts, injuries such as a tenant getting hurt at the property, or otherwise), said liabilities do not become the LLC owner's personal liability. If the business fails, then such loss can be limited to the business and not extend to other personal assets of the owner. In addition to liability protection, LLC's offer many tax benefits. Rather than venturing into the many tax benefits, I would encourage my readers to explore the tax advantages of an LLC with your accountant. LLC's are also very beneficial as an estate planning tool. For my clients that have a Revocable Trust, I typically advise that the LLC be owned by the Client's trust or that the Client transfer their LLC ownership to their trust. This allows for an LLC and the property held within to pass to your chosen beneficiaries without the need for probate. However, LLCs are generally subject to probate unless the interest has been assigned or designated to transfer upon the owner's death. Prior to state law authorizing the formation of an LLC, people used General Partnerships and corporations for business planning. Corporations remain a viable entity to consider for business planning; however, General Partnerships have all but gone away as they offer no liability protection. Determining what type of entity best suits you and your business is something you should discuss with your attorney and accountant.  As with most business planning options, there are costs to consider when setting up an LLC. Attorney fees to establish, annual franchise tax, and accounting fees are all expenses involved with setting up and managing an LLC.

Whether you recently moved to Arkansas or you have always called Arkansas home, it is a good idea to have your estate plan reviewed by an attorney to ensure that it is current and still fulfills your estate planning goals. If you have not set up an estate plan, now is the time to do it. The complications of moving from state to state are not difficult; however, there are still legal issues to be concerned with. While your Last Will and Testament, Durable Power of Attorney, and medical directives will most likely be effective in Arkansas, your Durable Power of Attorney and medical directives typically need to be updated to include the statutes of the state where you reside. Each state may have special exceptions to consider. For example, if you have children that you are not providing for under your Last Will and Testament, Arkansas has a law, known as the “pretermitted heir law” that requires your Will to at least mention the child, even if you do not wish to leave that child an inheritance. Likewise, if you have a deceased child leaving children, you need to mention those grandchildren’s names in your Will. Failure to mention the child or grandchild can result in that person you wished to disinherit instead receiving a portion of your estate, despite the terms in your Last Will and Testament. I often get asked about the estate or inheritance tax. Fortunately, Arkansas has eliminated its state estate tax, so that is not a problem. The federal estate tax still applies to estates in excess of $13,990,000 (per person) for 2025, and there are even larger estate tax exemptions for married couples. Many estate plans for married couples have special provisions to maximize the exemption from estate taxes; however, those provisions need to be reviewed in light of the much larger exemptions in place as of 2025. Do you still own real estate in another state? For example, many families own vacation condominiums in other states. If so, you will want to plan for that to avoid “ancillary probate” (a probate court proceeding in another state). This can be an expensive and time-consuming legal problem for your surviving spouse or children. Setting up a Trust is often the best way to avoid probate, including ancillary probates in other states and jurisdictions. In summary, if you have moved here from another state, the laws are usually not significantly different from state to state. However, we typically advise that you have an attorney review your out of state documents, and possibly make updates to your documents in accordance with the laws of the state where you currently reside. An experienced estate planning attorney can advise you on any other issues that might affect your estate plan now that you are a resident of Arkansas. Wesley W. Harris is an associate attorney at Farrar & Williams, PLLC, a law firm limiting its practice to trusts, estate planning, and elder law, located at 1720 Higdon Ferry Road, Suite 202, Hot Springs, Arkansas, and can be contacted at 501-525-4401 or by email at wesley@ farrarwilliams.com. The firm’s website is farrarwilliams.com.

A common misconception about estate planning is that it’s only for the elderly or the wealthy. The truth is, none of us can predict the future — but we can take proactive steps to prevent unnecessary complications for our loved ones. Estate planning isn’t just about money; it’s about ensuring your wishes are carried out and protecting the people you care about most. For younger families, especially those with minor children, having a Last Will and Testament is essential. One of the most crucial reasons is to legally designate a guardian for your minor children in the event of your passing. Without a will, the court will decide who takes on this responsibility, which may not align with your wishes. Additionally, if you pass away without a will — known legally as dying intestate — your assets will be distributed according to state law, which may not reflect your personal relationships. This can be especially problematic in blended families, where you may have a stronger bond with stepchildren than with biological heirs. Without a will specifying your intentions, stepchildren typically do not inherit under intestacy laws. Estate planning ensures that your wishes — not the state’s default rules — dictate what happens to your assets and your loved ones. No matter your age, having a well-structured plan in place provides peace of mind and protection for those you care about most. Perhaps one of the most important documents that you should have in place is a Power of Attorney. Regardless of age, none of us can predict what the future may hold. A Power of Attorney is a legal document that grants one person (attorney-in-fact) the authority to act on behalf of another person (the principal). The agent can be authorized to handle financial matters, legal decisions, healthcare choices, or other specified tasks. There are different types of Powers of Attorney, each serving a unique purpose: • A Durable Power of Attorney allows your designated agent to manage your financial affairs if you become incapacitated. • A Healthcare Power of Attorney enables someone you trust to make medical decisions for you if you are unable to do so. Without these documents in place, your loved ones may be forced to go through costly and time- consuming court proceedings to gain the authority to act on your behalf. Decisions about your health, finances, and legal matters could be left in the hands of the courts — or worse, individuals who do not have your best interests at heart. Estate planning and Powers of Attorney are not just about protecting wealth — they are about protecting your family, your choices, and your future. By putting these essential documents in place, you ensure that your loved ones are spared unnecessary stress and uncertainty during difficult times. Taking action now, no matter your age or financial status, is one of the most responsible and caring decisions you can make.

Many families become motivated to create an estate plan once they have children, in order to name a guardian for their minor children and to ensure their minor children are cared for through the use of trusts. Sometimes, the motivation may not be there if an individual or family does not have children. However, an estate plan is just as important for those without children, as it is for those with. Who would receive your estate assets if you passed away today? If you die in Arkansas without a will, intestate succession statutes govern who is to receive your estate and it may not be who you would want it to be. Intestate succession depends on whether you have living children, a spouse, parents and other close relatives. Therefore, it is important to consider who you wish to be beneficiaries of your estate upon your death. Families without children might be in a unique position to be generous with charity or other family members and friends. You can make these wishes in your Last Will and Testament, or if you wish to avoid probate upon your death, you might consider creating a revocable living trust or other estate planning strategies. Who would take care of your financial affairs if you became incapacitated? All of us run the risk of becoming incapacitated by reason of stroke, accident, or advanced age. Therefore, you should also consider executing a durable power of attorney. This is the most basic building block of an estate plan. A power of attorney is a legal document where you appoint a trusted person as your agent to act for you regarding management of your assets in the event of your incapacity. A guardianship might be necessary if you become incapacitated and do not have a power of attorney in place. Further, a living will and advance medical directives are important documents to consider. A Living Will is a document directing that your physician not take extraordinary medical steps to prolong your life in the event you are suffering from a terminal illness or injury from which you have little possibility of recovering. If you feel strongly about avoiding prolonged and expensive medical care in hopeless situations, you may also wish to utilize a Medical Power of Attorney. A Medical Power of Attorney is a document by which you appoint another trusted person to act on your behalf in the event you are unable to act for yourself, with regard to the hard decisions that must be made if you are terminally ill.

A new legal issue in estate planning is how to handle digital assets during one’s lifetime, and how to pass on these digital assets to future generations.  Digital assets can include a variety of things, but in this article, we will focus on cryptocurrency. Cryptocurrency can most easily be defined as a virtual currency that uses a heightened security technology called blockchain. Due to their intangibility, cryptocurrencies are stored and traded electronically. We are seeing more clients and estates with investments in cryptocurrency, such as Bitcoin. As a reference for readers who are new to cryptocurrency, one Bitcoin was valued at less than one cent in 2010, and as of the writing of this article, one Bitcoin is valued at $104,620.10. Additionally, the full market cap of all available bitcoin is a staggering $2.06 trillion. The rise in the value of cryptocurrency and a newfound public investing interest presents new legal challenges when crafting the best estate plan for each client. One of the most important goals in estate planning is making it as easy as possible for your loved ones to access and administer your estate. If a client currently holds or has plans to invest in cryptocurrency, it is crucial to obtain information on any cryptocurrency held by the individual and to include language or proper directions in the estate planning documents that permit fiduciaries to access, retain, and manage the cryptocurrency without limitations or liability. It is important to provide these powers to the fiduciaries in an estate or trust, because even if the decedent provides the fiduciary with their cryptocurrency passcode during their lifetime, the fiduciary’s use of the passcode after death — without the proper permissions in the decedent’s estate planning documents and related laws — could cause the fiduciary to violate federal or state privacy laws, terms of service agreements, or computer fraud and data protection laws. For individuals with Trusts that plan on or are currently holding cryptocurrency as an investment, your Trust document should give authority to the Trustee to handle the cryptocurrency, even if the owner is the Trustee. Many trusts or wills created more than five years ago might not include the necessary language to properly and legally manage cryptocurrency. At a minimum, a cryptocurrency investor who wants to establish a trust holding cryptocurrency should release a trustee from any duty to diversify and provide the trustee with the necessary indemnification. However, as noted earlier, is important to ensure that doing so does not violate any applicable laws or terms of service agreements. It may be that a specific gift of the cryptocurrency is contained within the Will itself, or a Memorandum is prepared to sit alongside the Will, detailing instructions on how to access the funds or the private key itself. It is generally not recommended that an individual share his or her passcode with others for security reasons, but once a passcode is lost, it can be virtually impossible to recover. Leaving cryptocurrency to your loved ones after your death and avoiding probate requires more planning than traditional assets. For example, Coinbase, a popular cryptocurrency wallet, does not support naming a beneficiary for individual accounts and they require estate planning documents or proper probate court documents to transfer a Coinbase account. With proper estate planning, you can simplify the process for your beneficiaries and ensure that they inherit your cryptocurrency while avoiding unnecessary delay or expense. Wesley W. Harris is an associate attorney at Farrar & Williams, PLLC, a law firm limiting its practice to trusts, estate planning, and elder law, located at 1720 Higdon Ferry Road, Suite 202, Hot Springs, Arkansas, and can be contacted at 501-525-4401 or by email at wesley@ farrarwilliams.com. The firm’s website is farrarwilliams.com.

Did you know that nursing home care in Arkansas can be nearly 70% more expensive than assisted living facilities? This staggering statistic underscores the importance of planning for long-term care — not just for yourself, but for your loved ones, as well. As you look ahead to 2025, here’s a New Year’s resolution worth adding to your list: Take time to explore your options and make a plan for long-term care. It’s not exactly a topic people enjoy thinking about, let alone discussing. In fact, the discomfort around aging is one of the biggest reasons many people delay or avoid proper estate and long-term care planning. If this sounds familiar, don’t feel guilty — you’re not alone. Long-term care insurance is often the best way to prepare for the future. This type of insurance can help you avoid the high costs of nursing home care by covering expenses for in-home care or assisted living. Despite its advantages, most people don’t purchase long-term care insurance, leaving them with limited and often less desirable options when the need for care arises. Here’s the reality: without long-term care insurance, your options for covering nursing home costs are limited to two primary paths: 1. Private Pay: You can pay out of pocket if you have sufficient assets. However, with nursing home costs averaging between $7,000 and $10,000 per month, this method quickly becomes unsustainable for most families. 2. Long-Term Care Medicaid: This government program can help cover nursing home costs, but it comes with strict income and asset requirements. The eligibility rules can vary depending on whether you’re single or married, adding another layer of complexity to the process. Unfortunately, without long-term care insurance, Medicaid is often the only viable option. However, it’s important to note that Medicaid typically does not cover in-home care, which means nursing home care may become unavoidable for those relying solely on this program.  Over the years, our firm has helped hundreds of individuals and families navigate the challenging process of obtaining long-term care Medicaid eligibility. Our expertise ensures that you don’t have to face these hurdles alone. Now is the time to take control of your future. Planning ahead for longterm care not only protects your assets but also provides peace of mind for you and your loved ones. Don’t wait until it’s too late — start the conversation today.

If you are like me, you will be spending a lot of time with family and friends this holiday season. I often encourage clients to use this family time as an opportunity to discuss their estate plan and as a way to instill values in their children or grandchildren. I was recently reminded of this by Warren Buffett’s most recent shareholder letter, where his one suggestion to all parents, whether they are of modest or staggering wealth, was when your children are mature, have them read your will before you sign it. While it might not sound like the merriest conversation to have around the dinner table, it can often help avoid surprises and even increase family harmony. Families that speak freely about these matters might avoid surprises and can oftentimes make better plans involving choice of Executor or Trustee, succession plans for a family business, and long-term care decisions. If you have never considered an estate plan, this might be a good time to seek your family’s opinion. As Warren Buffett continued in his letter, be sure each child understands both the logic for your decisions and the responsibilities they will encounter upon your death. You don’t want your children asking “Why?” in respect to testamentary decisions when you are no longer able to respond. The conversation might be less about what the family thinks of your current estate plan and more about what the family’s role is in the event of your incapacity or death. It is important to let the person you have named as your agent under a Power of Attorney, Executor or Trustee know that they have been named, in order that they understand their responsibilities. It might even be a good idea to introduce your Executor or Trustee to your estate planning attorney. These conversations can also encourage your children to consider their own estate plan, including naming a guardian for their minor children through their Last Will and Testament, or setting up a family trust.  How each family handles these delicate conversations depends on personalities and preferences of the family. Perhaps this conversation should be held through a series of talks instead of one large one. It might be best to talk only to the child(ren) you have named as Executor or Trustee, or even to talk separately to each child to hear their opinions and fears.

Many of my senior clients report to me that they are having conflicts with their daughter-in-law or son-in-law. While none of us like to discuss tensions in our families, the fact still remains that in many families, you may not have a close relationship with the spouse of your adult child. Indeed, sometimes these relationships are quite unpleasant and even hostile. Many seniors wish to take steps to ensure that any inheritance received by their adult child does not ultimately pass to the inlaw with which the senior has a bad relationship. Rather, many seniors would rather that their child’s inheritance, instead, ultimately pass to their grandchildren (either in the event that the adult child should predecease, or alternatively in the event the adult child receives the inheritance). If you wish to prevent your daughter-in-law or your son-in-law from receiving a part of your estate, how do you do this? First, you need to be clear in your estate planning documents that if your adult child should predecease you, their share passes to your grandchildren. Further, you can also include a direction that the adult child’s inheritance continues in a trust that ultimately reverts to the grandchildren and not to the in-law. This can give your adult child generous access to his or her inheritance but eliminate the rights of the in-law of whom you are not fond.  Eliminating the possible inheritance rights of your son-in-law or daughter-inlaw is not difficult to implement as part of your overall estate plan. It can be a good solution for the many seniors who just cannot abide the thought that an inlaw, who has a bad relationship with the senior, might receive a large portion of the seniors’ estate.

Did you recently retire or move to Arkansas from another state? If so, you might want to read this article. The legal complications of moving from state to state are not as complicated as they were in past years. But you still want to be “street smart” about the tax and legal issues that can differ from one state to another. For example, if you sold your home in another state recently, you probably do not owe any capital gains tax on the sale, but you usually do need to file a final state income tax return for that state. The good news is that you will probably not owe any tax on the sale if your profit was less than $500,000 (this exemption may vary from state to state, but the federal exemption for a married couple is $500,000 in profit on sale of the principal residence) What about your will, trust and power of attorney? Are these documents legal in Arkansas? As a general rule, the answer is yes. A legal document properly executed in another state is legal in Arkansas. But then the legal system always has exceptions to consider. Do you have children that you are not naming your will? Arkansas has a law, known as the “pretermitted heir law” that requires your will to at least mention the child, even if you do not wish to give that child anything under your will. Likewise, if you have a deceased child leaving children, you need to mention those grandchildren’s names in your will. Failure to mention the child or grandchild can result in that person you wished to disinherit instead of receiving a large portion of your estate despite the terms of your will to the contrary. What about Arkansas estate tax? Fortunately, Arkansas has eliminated its state estate tax, so that is not a problem. The federal estate tax still applies to estates in excess of $13.61 million and there are even larger estate tax exemptions for married couples. Do you still own real estate in another state? For example, many families own vacation condominiums in Florida or Colorado. If so, you will want to plan for that to avoid “ancillary probate,” which is a probate court proceeding in another state. This can be an expensive and time-consuming legal problem for your surviving spouse or children. In summary, if you have moved to Arkansas from another state, the laws are usually not significantly different from state to state.  But you still may want to double-check your will or trust to avoid any legal problems that may be unique to your family situation.