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Conway Estate Planning Blog

Staying clear of estate planning mistakes in Arkansas

Planning an estate takes some thought and foresight. When making decisions about estate planning, Arkansas residents will want to ensure that their plans are complete and spell everything out. With that in mind, there are some things to be aware of. Making mistakes could mean added stress and grief for family members.

Anyone writing an estate plan should have a good grasp of what that entails. Moving forward when there are foggy areas doesn't make sense. Understanding how a plan works will make the writing of it much easier. In the very least, the basics of the plan should make sense.

Is an irrevocable trust the right document for your estate?

You begin to reach retirement age, and you start thinking about the future of your assets after you pass away. You know which assets will fall into the hands of which beneficiaries, and you want to secure your decision in a legal document.

Irrevocable trusts allow you to permanently allocate specific assets to your beneficiaries while you remain alive. Irrevocable trusts, compared to revocable trusts, allow security as they cannot face modification or the probate process in Arkansas. Because the probate process may take months to distribute assets to your loved ones, many individuals choose to establish irrevocable trusts, so that their beneficiaries can receive their generous gifts quickly when they pass away.

Sloppy estate planning can wreak havoc with family members

The best estate plans are the ones where all the i's are dotted and all the t's are crossed. Messy estate planning can create chaos in Arkansas families. Leaving things out of a plan or not having things properly documented or worse yet -- not having an estate plan at all -- could make life for already grieving loved ones even more miserable.

Not only should documents be in order such as an up-to-date will or trusts, but people should know that these days very few people are looking to amass things that they don't need. Leaving loved ones a lot of personal items may not be in their best interests, so streamlining personal possessions might be a good idea. Asking family and friends if they'd like things before donating them to charity may be very appreciated by loved ones.

Widows, widowers in Arkansas and estate planning needs

A person who has just lost his or her partner has many things to think about. Although it may not be the first thing that comes to mind in the throes of grief, a widow or widower in Arkansas really needs to pause to consider what steps need to take place in his or her own estate planning -- to protect him or herself and any heirs, especially when those heirs are children. Not only does the will of the deceased need to be reviewed, the surviving spouse's estate documents should also be reviewed and updated as soon as possible.

A widow or widower needs to ensure that documents in his or her estate plan are all-encompassing. They should at least include a durable power of attorney, a will, possibly trusts and a health care proxy. Just to note, if a health care proxy is not in place, a Health Insurance Portability and Accountability Act (HIPAA) release form will need to be signed.

Estate planning: A trust as a retirement account beneficiary

Sometimes there's nothing else to do but to trust in a trust. When it comes to estate planning, folks who have retirement accounts in Arkansas can have a primary and contingent beneficiary -- a person or body standing to get the account when the owner is deceased. Beneficiaries get these plans directly, avoiding the probate process.  When minor or special needs children are named as beneficiaries, having a trust as a beneficiary may be a wise planning decision.

A trust may also be beneficial as a way of sidestepping estate taxes of a surviving spouse. Assets go to the trust upon death, rather than to a spouse. The main downside to having a trust as a beneficiary is that certain retirement plans are subject to required minimum distribution (RMD) payouts. If there is more than one beneficiary on the plan, those payouts will be calculated based on the life expectancy of the eldest beneficiary. 

Protect your beneficiaries with a gun trust

If you have any guns — be it for sport, self-defense or family memorabilia — it’s important that you take estate planning steps to minimize the legal complexities of transferring these assets.

By establishing living revocable gun trust, you can accelerate the transfer process and ensure your beneficiaries won’t face consequences for unintentionally violating the National Firearms Act.

Arkansas estate planning: What to do in the event of divorce

Divorce is a fact of life. But how does a marital split affect any estate planning that has already taken place? Arkansas residents who are in this situation need to realize that their estate plans should reflect any life changes that take place and that includes divorce. An estate plan should include things like who would make health care decisions in case a person can't do so for him or herself, and that person is a spouse in many instances. So, unless someone wants his or her former spouse to make those kinds of judgments, these things have to be rectified in any formal documents.

If a spouse is a power of attorney, that should be changed as well. A durable power of attorney gives a spouse access to accounts and assets even when the other partner is mentally capable. That may be concerning, especially if the split is accompanied by hard feelings. A power of attorney is probably one of the first changes that should be made.

Aretha Frankin, Prince failed in estate planning

Both Aretha Franklin and Prince were outstanding performers. But they came up short in one thing that could have made the lives of their loved ones a lot less complicated. Neither of these entertainers did any estate planning and died intestate, so their estates will likely be embroiled in red tape for months and perhaps even years. Arkansas residents who want to avert such hardship for their loved ones should perhaps look into planning their estates.

Even though most people don't want to think about dying and estate planning might not be on the list of top priorities, those individuals who, for even a moment, think about the possible ramifications their deaths could have on loved ones may take some time to get the facts on planning their estates. And yet so many Americans don't have wills. They say they just haven't got around to it or they believe wills are only for those people with a lot of assets.

Estate planning doubly important for Arkansas entrepreneurs

Planning for the future may be even more important for business owners. Arkansas entrepreneurs may not realize the importance of estate planning and how it can affect their businesses after they're deceased. It just might be that many of a business owner's assets is in the person's company, and plans should be in place for the business to either pass to a family member or members or to be sold at a fair market price.

For those operating an owner-dependent business, estate planning focuses on the fact that the business will more than likely close its doors when the owner passes away. The goal, then, is to aim for the best income possible annually, allowing the owner to move profits into a retirement savings plan as income. Many lawyers, doctors, engineers, architects and other service providers choose this type of business model.

Estate planning not just for Arkansas residents with many assets

Most everyone has something of value. When it comes to estate planning, Arkansas residents don't have to have to be wealthy to write estate plans. Such a plan gives direction to loved ones when someone is not around to do that anymore. A plan can also encompass last wishes and what the person wants done with his or her personal items. Much has to do with leaving family members with much less stress amid losing someone they love.

For parents, it also means naming a guardian for any minor children. A well-rounded plan should also have an advance care directive that encompasses a living will outlining the type of medical care requested should the maker not be able to make decisions on his or her own behalf. And speaking about making those decisions, a power of attorney should also be named in an estate plan. A medical power of attorney and a financial power of attorney can be looked after by two different individuals, but doesn't have to be.

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