What happens if you die without a will in Arkansas?

Many people make costly estate planning mistakes when it comes to individual retirement accounts. Unlike other assets, IRAs and 401(k)s are not typically covered by a will or a standard type of trust. Instead, the funds go to inheritors according to beneficiary designation forms that are on file with the IRA custodian. Oftentimes individuals do not know who is listed on their beneficiary forms because the account and beneficiary designations were created many years ago.  It is a good idea to make sure all of your beneficiary forms are in order and up to date. You should check the designation on file to make sure it’s what you intend. You should also be sure to name both primary and contingent beneficiaries on your plans in case the primary beneficiary predeceases you. You can name any beneficiaries you want with an IRA or 401(k), including family members, friends, a trust or charity. Alternatively, with a 401(k) or other workplace plan, your spouse must give written permission for you to leave the account to anyone else. If there is no beneficiary form on file, your heirs must use the IRA custodian’s default policy. This may also mean someone other than the person you intended will receive your IRA (i.e. your heirs- at-law). Typically the custodian will award an IRA first to a living spouse and then to your estate. Sometimes the custodian may send it straight to the estate, which will cut short the tax benefits and most likely require a probate proceeding. If you list your children as beneficiaries, it is often a good idea to provide for “per stirpes” distributions (if the form allows this designation). This means that if your child predeceases you, their children would become the beneficiaries, instead of your other children, or the co-beneficiaries. Sometimes clients wish to leave their IRA to a trust to accept retirement assets. There can be many reasons for leaving your IRA to a trust, which include: • If your intended beneficiaries are minors. • If you are fearful of creditors or in-laws. • If you wish to control the cash flow to beneficiaries with money management problems. • Second-marriage planning. Many complex IRS rules govern IRA trusts. Therefore, it is critical that you speak with your trusted advisors to ensure that an IRA trust meets your goals as well as the government criteria. Regardless of who you ultimately decide to name as beneficiary of your retirement accounts or plans, it is crucial that those assets make their way to your intended beneficiary. A proper beneficiary designation form should accomplish this. 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, and can be contacted at 501-5254401 or by email at wesley@farrarwilliams. com. The firm’s website is farrarwilliams. com.

It is a reality that as we live longer, the need for long-term medical care continues to rise. A question I often get asked is, “How do we plan for the cost of long-term care, including nursing home costs?” Long-term care insurance is by far the preferred option, since it offers the possibility of keeping people out of nursing homes by paying for care in the home or in assisted living facilities. Statistics show that the vast majority of people do not purchase long-term care insurance and are forced to rely on other alternatives to pay for long-term care costs. Unfortunately, the other alternatives often do not include care in the home and instead require the long-term care to be in a nursing home. Without insurance, there are two primary options for the payment of nursing home costs. First, a person may have sufficient income and assets to pay for such costs on a private pay basis. However, since such costs average in excess of $6,500 per month, the private pay option is not a long-term solution for most people. The second option is the Long Term Care Medicaid Program. Since this is a government benefit program, there are asset and income requirements to be met in order to qualify. The rules differ depending on if you are single or married. As a result of the eligibility determination process, many clients structure their estate plans in a way to enhance their eligibility in the event such costs become necessary. The remainder of this article will focus on one of the more popular estate planning tools used to enhance Medicaid eligibility for long-term care costs. A special type of trust often referred to as an “irrevocable trust” is a popular planning option. I prefer to call this trust a Medicaid Asset Protection Trust. It is important to note that most trusts that are set up are revocable trusts which offer no protection from nursing home costs. In most cases, in order to gain eligibility, one must either give away assets or structure assets in a MAPT. Gifting assets to your children is usually a poor option, since those assets then become exposed to the children’s debts and liabilities, divorces, etc. For these reasons, the MAPT may be a preferred option as it leaves you in control. The primary disadvantage of the MAPT is that it limits you and your spouse to the income earned on the trust assets, as the principal is restricted and protected for the benefit of your remainder beneficiaries, usually your children. The MAPT does allow you to have full use and benefit of your home and real property, including the right to sell it (provided the proceeds stay in the trust). As with most asset transfers the creation of a MAPT is subject to a Medicaid “look back” of five years. This means the trust should be created and funded at least five years prior to applying for any Medicaid benefits. It is important to note that most clients who set up a MAPT elect to keep a sufficient amount of assets out of the trust so they will have full access and control to a comfortable level of assets for their lifestyle. IRA’s and other retirement plans are usually left out of a MAPT. In summary, planning for the cost of long-term care is an important issue that many people need to consider when setting up their estate plan. This type of planning is very specialized and should only be implemented with the help of an experienced elder law attorney.

In an era of rapidly evolving technology, a new asset class has emerged that has captured the attention of investors worldwide: cryptocurrency, particularly Bitcoin. While Bitcoin and other cryptocurrencies offer a decentralized and borderless financial system, they also introduce unique challenges for estate planning—challenges that can leave families struggling to manage or even access digital wealth after a loved one’s passing. If you haven’t thought about how your cryptocurrency holdings will be handled after you’re gone, it’s time to take action. The rise of digital currencies, such as Bitcoin, presents a new dimension to estate planning that requires both attention and foresight. Why Cryptocurrency Requires Special Attention in Estate Planning Unlike traditional financial assets like bank accounts or real estate, cryptocurrency operates outside of the traditional financial system. Transactions are recorded on a decentralized ledger called the blockchain , and ownership of cryptocurrency is verified through a system of cryptographic keys. These private keys act as a digital "password" to access your holdings, and without them, your crypto assets are as good as gone. This is where the estate planning process becomes critical. If a family member or loved one doesn’t know how to access your Bitcoin wallet or other digital assets, your wealth could be lost permanently. In fact, millions of dollars in Bitcoin have already been lost due to forgotten keys or inadequate estate planning. The Cryptocurrency Challenge: Securing and Sharing Your Keys The most important step in ensuring your cryptocurrency is accessible to your heirs is safeguarding your private keys . These keys are the keys to your digital wallet, and without them, nobody—not even the most skilled hacker—can access your coins. Here’s the catch: Private keys are not like regular bank account login details. If you lose your private key, there is no password recovery system to fall back on. Therefore, it is imperative that you store your keys securely and make sure your family knows how to access them when the time comes. What You Need to Do Now: Planning for Your Digital Wealth When it comes to planning for Bitcoin or other cryptocurrencies, there are a few practical steps you can take right now to ensure that your assets are passed down smoothly: 1. Create a Detailed Cryptocurrency Inventory : List all of your cryptocurrency holdings, including any Bitcoin, Ethereum, Litecoin, and other tokens you own. Don’t forget to include where these assets are stored (whether on a hardware wallet, a software wallet, or an exchange platform like Coinbase). 2. Store Your Private Keys Securely : Your private keys are the cornerstone of your crypto holdings. There are multiple ways to store them securely: Hardware wallets (such as Trezor or Ledger) are physical devices that store your keys offline, providing the highest level of security. Paper wallets involve printing out the private key and storing it in a safe location. Password managers can also securely store private keys, but make sure the password manager itself is protected by multi-factor authentication. 3. Whichever method you choose, make sure your family knows where to find these keys. 4. Designate a Trusted Executor for Your Cryptocurrency : A digital executor is someone you trust to manage your digital assets upon your passing. This person should have clear instructions on how to access your crypto holdings. You can even choose a backup executor in case your first choice is unavailable. By taking proactive steps—creating an inventory of your crypto holdings, securing your private keys, designating a trusted executor, and communicating your plans with your family—you can ensure that your digital wealth is passed on seamlessly to the next generation. The future of money is digital, but the future of your wealth doesn’t have to be uncertain. Start planning today to secure your cryptocurrency legacy for tomorrow. Ryan Villano is an attorney at Farrar and Williams PLLC which is conveniently located at 1720 Higdon Ferry Rd., Hot Springs, AR . To discuss your estate planning needs or to schedule a consultation, give us a call at (501-525-4401) or visit our website at [www.farrarwilliams.com]. 

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.