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Arkansas estate planning and privacy -- trusts vs. wills

It is rather difficult in this technological age to keep private matters private. Arkansas residents who are thinking of estate planning should know about the differences between will and trust-based estate plans if they wish to keep their private affairs under wraps. In essence, estate plans that are will-based eventually become a matter of public record and anyone can access personal information contained in a will. 

Wills must be filed with local probate courts and as such anyone can ask to see one once it is filed. That means anyone who sees it will know what the testator owns, who the beneficiaries are and who isn't named in the will. Anyone viewing the document will also see personal information like addresses and phone numbers. 

Understanding assets in estate planning in Arkansas

When writing an estate plan, people have to think about all sorts of things, including their assets. But, what really constitutes an asset if one is in business? It may not be as clearcut as all that. When Arkansas entrepreneurs understand what's at stake in their estate planning, they may take the time to ensure those plans are thorough. Essentially, an asset is something that has some economic value currently or will have in the future.

Assets can be labelled as short term or fixed. When it comes to a business, assets are recorded on a balance sheet and current assets are usually converted into cash within a year. Fixed assets include things such as buildings and equipment. 

Planning for the care of a pet during estate planning

Most people who have pets consider them to be a part of the family. Arkansas residents who feel this way will be happy to know that they can, indeed, make provisions for their furry family members in their estate planning documents. The law, however, considers pets to be personal property, so that is another good reason to include Fido and Fluffy in an estate plan.

When considering including a pet in an estate plan -- whatever kind of pet that may be, some pertinent questions should be answered. Firstly, who will look after the pet? Having an important conversation with any likely candidates is extremely important. The testator will want to make sure the person chosen is willing to take on the care of the pet. Obviously, compassion, kindness, a love of animals and honesty should be qualities of the individual.

Will I benefit from a gun trust?

The founding fathers secured the ability to bear arms in the United States Constitution. However, they did not anticipate what happens to our firearms after we pass away, and it creates issues on how we distribute our protective pieces in an estate plan.

Luckily, the state of Arkansas allows residents to establish gun trusts, a trust specifically designed to hold personal legal titles over guns and assist with distribution after death. It eases the process of distributing your possessions for your friends and family.

Beginning of the year best time for estate planning gifts

The beginning of the year is the best time for gift giving when it comes estate plans. For those Arkansas residents who are thinking about making estate planning gifts, they should do so now. Very few estates are taxable under the law as it now stands, but there are other reasons annual giving makes sense. One of the greatest reasons to give gifts while still alive is the ability to see how they positively affect the lives of those who receive them.

Gifting money will also allow a testator to see how a potential beneficiary handles money and may sway the decision to leave that person something in a will. Someone who squanders funds may not do well getting a lump sum. Perhaps a trust would be better. Also, if gifting someone with property that produces income, giving it at the beginning of the year rather than at the end transfers income to people who may be in lower tax brackets.

The need for estate planning for Arkansas business owners

There are three documents that entrepreneurs need to include in their estate plans for safeguarding their businesses. Using savings and insurance alone doesn't cut it anymore and Arkansas residents who have spent the time and money into nurturing their businesses need to realize the importance of having wills, financial powers of attorney and living trusts when estate planning. As the business grows and prospers, these documents aren't only important to have, they're necessary.

Things like insurance can provide coverage for medical emergencies, but only a good estate plan can prepare a business for unforeseen, worst-case events. For example, what happens in the event of the owner's untimely death? Is there a succession plan in place? The same goes for retirement. A succession plan addresses those issues as well as chronicling what should happen if the business falls on financial hard times or if the owner can't oversee operations because of illness. 

Estate planning: Who is on the hook for estate taxes in Arkansas?

There are all kinds of decisions that need to be made when thinking about the future. For instance, during the estate planning process, Arkansas residents writing their estate plans need to be mindful of who of the named beneficiaries in the estate will be responsible for paying the estate tax. Wills and trusts have specific indications on this issue.

Those beneficiaries who have been left specific items of actual personal property are off the hook for paying estate tax. That holds true unless there are no other assets. If there is only a will in existence, those who receive property that doesn't have to go through the probate process but are included as part of the estate's value will have to pay a share of estate tax.

The importance of trusts for special needs children in Arkansas

Parents are always looking out for the welfare of their children. That still applies when their children have grown into adults. Arkansas parents who have special needs children may be even more conscious of those needs when they're planning their estates. Trusts can be particularly beneficial in these instances.

A Special Needs Trust will ensure that a special needs loved one is looked after when parents or guardians are unable to do so. Such a  trust will also protect any government benefits like Medicaid or Supplemental Security Income, which stipulate that a person cannot have more than $2,000 in assets to qualify. Putting assets into a trust will ensure the person with special needs will have enough support during his or her lifetime.

Updating estate planning documents in Arkansas is essential

It's great when people take the time to plan their estates. It's not so great when estate planning ends there. Leaving an estate plan drafted in Arkansas unattended for years as life circumstances change may be just as detrimental as not having a plan at all. Federal estate tax laws were given an overhaul with the Tax Cuts and Jobs Act, allowing individual gifts over a lifetime of more than $11 million for singles and double for couples.

It's a good idea to revisit estate planning documents when tax laws change, but that's not the only reason. Wills should be updated when circumstances change and perhaps there is a need for a new executor or maybe a beneficiary has died. Whatever the reasons, wills should be updated every so often. If estate documents contain provisions regarding the guardianship of children and children are now adults, that too should be changed. Updates should also happen if changes in guardianship are warranted or desired.

Which type of trust is better in estate planning?

For individuals thinking about how trusts might benefit them when planning their estates, the decision between a revocable and an irrevocable trust might seem perplexing. That estate planning decision pretty much hinges on how much control a grantor wishes to have over his or her assets. There are certain things a trust can and can't do for Arkansas residents.

A revocable trust is pretty much dictated by its name -- it can be revoked or changed by the grantor as many times as he or she deems fit. An irrevocable trust, on the other hand, is set up by a grantor but overseen by a trustee. Its contents are not changeable unless the trustee and beneficiaries of the trust approve the changes. 

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