Arkansas Estate Planning Considerations
Common Law State
- Arkansas is a Common Law State, which means the rules governing the ownership, division, and inheritance of income and property acquired by a husband or wife during their marriage hold that subject to various qualifications, each spouse owns and has complete control over his or her income and property.
Last Will and Testament
The minimum age of a person competent to make a will is 18. The number of witnesses required to execute a will is two.
The original custodial gift may be a life insurance policy or annuity contract.
Custodial property may be invested in or used to pay premiums on (1) a policy on the minor’s life if the minor’s estate is the sole beneficiary, or (2) a policy on a third party in whom the child has an insurable interest if the minor or the custodian is the irrevocable beneficiary.
The custodial arrangement terminates when:
The minor child reaches age 21 for custodial transfers made by irrevocable lifetime gift, will, or trust, or exercise of a power of appointment (donor may override by specifying any age from 18 through 25).
The minor child reaches age 18 concerning other custodial transfers.
The minor child dies.
Dying without a Last Will, the Arkansas laws of Intestacy.
The estate goes to children and descendants of the deceased, as follows:
- 100% per capita and in equal shares (see Ark. Code §28‐9‐204, 205)
- If there are no children or descendants, the surviving spouse takes the estate as follows:
- If married continuously for a least three years before death, —100% of the estate.
- If married less than three years before death, —50% of the estate.
- If there is no descendant or surviving spouse, or if half of the estate does not go to the spouse:
- 100% (or applicable portion) to surviving parent or parents equally
- If there is no descendant, spouse, or parent, or if half of the estate does not go to the spouse:
- 100% (or applicable portion) to siblings and descendants of predeceased siblings per capita and in equal shares (see Ark. Code §28‐9‐204, 205)
- If none of the above:
- Intestacy laws outline further distribution steps to the level of grandparents, then great-grandparents (and descendants). See Ark. Code §28‐9‐214. If none, a surviving spouse married less than three years takes 100%, or the estate is distributed to the last spouse to whom the decedent was married and heirs. See Ark. Code §28‐9‐215.
- If no legally described recipient can be found, estate assets go to the state of Arkansas.
Arkansas follows the Revised Uniform Fiduciary Access to Digital Assets Act to ensure that testators can retain control of their digital property and plan for its ultimate disposition.
- Arkansas does not impose an inheritance tax.
- Arkansas imposes an estate tax equal to the maximum credit allowed under the federal tax code for paid state estate and inheritance taxes under IRC Sec. 2011. However, the current federal tax code does not permit a credit for paid state estate or inheritance taxes. Therefore, Arkansas has no credit estate tax in effect at this time.
- Arkansas does not impose a GST tax.
- Arkansas does not impose a gift tax.