Last month we discussed the probate process. Probate is not inevitable. There are several ways to pass assets outside of probate in Arkansas. Regardless of how you choose to handle your property, it is still advisable to have a Will to serve as a safety net and address items of tangible personal property such as jewelry.
A trust avoids probate as to assets that are actually owned by the trust. Assets are transferred to a trust through a process called funding. If a trust is properly funded, there is no need for probate upon the grantor's death because trust owns the property, not the grantor.
Beneficiary designations kick in immediately after death. Beneficiaries are frequently assigned to bank accounts, annuities, life insurance policies and retirement plans. A beneficiary may also be assigned to a vehicle or even to a house through a beneficiary deed. Each institution will have its own particular form to complete. Pay careful attention to the instructions when completing a form to ensure you have validly named a beneficiary.
Property owned jointly with rights of survivorship does not become part of a decedent's estate. All owners have access to the property during their lifetime. When a joint owner dies, the surviving owners continue to own the property. Keep in mind that once you add a joint owner to property, the property becomes subject to all of the owners' creditors. There is also a risk that a joint owner will use your property for his or her own benefit.
With a properly structured plan, it is possible to avoid probate completely. Each of the methods discussed has its advantages and disadvantages and may not be appropriate for every situation.
For more information, contact Ashley Naramore. Ms. Naramore is an estate planning attorney with her JD (law degree) with Cum Laude from University of Arkansas School of Law in Fayetteville, Arkansas and her LLM (Masters of Laws) in estate planning and elder law from Western New England University School of Law in Springfield, Massachusetts.