How is your property distributed outside of and in probate in Arkansas (Bella Vista Probate Attorney)?

Property is distributed 2 ways:

1. Outside of probate
2. In probate

What Passes Outside of Probate?

Many people think that the Last Will and Testament controls everything. Nothing is further from the truth. Many things pass by “contract” or “operation of law” and skip probate.

401(k)’s, IRAs, investment, and other accounts

Any 401(k), IRA, investment, or other accounts with beneficiary designations properly set. This money will go straight to the beneficiaries. However, if the beneficiary is a minor, then the money may be held by the company until they turn 18, then a lump sum paid.

Many people don’t realize that beneficiary designations on accounts such as 401(k)s and IRAs can supersede the instructions in a will. That means that if you don’t keep your beneficiary designations up to date, your assets could end up going to someone you don’t want them to go to.

For example, if you get divorced and don’t update your beneficiary designation, your ex-spouse could still inherit your retirement account. To avoid this type of situation, it’s important to review your beneficiary designations regularly and update them as needed. Additionally, if you have multiple accounts with different beneficiaries, it’s important to make sure that the overall distribution of your assets is still in line with your wishes. Otherwise, you could end up leaving some of your loved ones out in the cold.

If these accounts don’t have a beneficiary, or the beneficiary fails, then they go to probate.

Real Estate in Certain Cases

It’s a common misconception that real estate always must go through probate to be transferred to the rightful owner. However, if the deed is properly prepared and lists more than one person, then the real estate may pass outside of probate. This is because the language of the deed will determine who the rightful owner is. So, if the deed is in order and lists more than one person, then the real estate will pass outside of probate.

If the deed has more than one person on it, and the language is correct, then real estate will pass outside of probate. If the language is “tenants in common,” or it is the last survivor of a married couple, then the property will probably fall into probate.

If the deed was “joint tenants with the right of survivorship,” and the other person is still living, then it is an automatic transfer. However, when the last owner dies, if nothing has been done, then it will go to probate.

Bank Accounts with Payable on Death

Much like IRA’s, the accounts will be paid to the people who were named on the account without probate. Accounts without any kind of designation go to probate.

Joint Accounts

If you have put your children on the accounts (highly not recommended), then those accounts will pay to them as a joint owner.

Many people choose to put their children on their bank accounts as joint owners, thinking that it will give them access to the money when they need it. However, this is not always the best idea. If you have put your children on the accounts, then those accounts will pay to them as a joint owner, regardless of whether you have given them permission to do so. This can lead to problems if your children are not responsible with money. Additionally, if you ever must go to court for any reason, the judge may order that the assets in those accounts be frozen until the case is resolved. As a result, it is generally advisable to keep your children off your bank accounts.

Cars

Arkansas has transfer on death titles for automobiles. If you meet the criteria, you can re-title your car to pass at death.

How is Property Distributed in Probate (in general)?

With a Will

This is the easier case because the rules of the will are followed for distribution.

Without a Will

If you die without a will, you are considered intestate and your estate is subject to intestate succession.

The basic rules of intestate succession in Arkansas are:

1. The living spouse, if any, gets 1/3^rd of the real estate as a life tenant. This means they can live there, get money if the house is sold, and can’t be removed. But, if the house is sold, then get a portion of the 1/3^rd and your children get the remainder. When the spouse passes, the children get the house free and clear.
2. The living spouse gets 1/3^rd of the money and personal property.
3. The children get the other 2/3rds of the money and personal property split evenly between them.

We are here to help you finalize your family member’s affairs so that you can move through the process in the least stressful way possible.  Simply contact our Bella Vista probate lawyers at (479)717-6300 if you need assistance.