Your Will Only Keeps You Safe from Intestacy—But Ross & Shoalmire Helps Keep Your Properties Out of Probate
Almost everyone needs an estate plan, even if they’re still young and have no reason to anticipate not living for many years to come. However, the need to draft an effective plan—a plan that consists of more than a will and powers of attorney—is all the more pressing for people who own properties outside their home state. In the absence of a well-considered strategy, your heirs may have to spend big money hiring lawyers, traveling between states, and trying to stay atop the multiple requirements set by different states throughout the country.
Ross & Shoalmire’s experienced team of Estate Planning Attorneys has spent years helping forward-thinking people in both halves of Texarkana build the confidence only assured peace of mind can afford. We can help you, too. Please send us a message online, or call us today to find out how an estate plan, will, and revocable living trust could lay the foundation of your legacy.
Outlining the Essential Elements of an Effective Estate Plan
When a person dies without a valid will, revocable living trust, or other comprehensive asset-redistribution instrument, this is defined as dying intestate. But an estate plan helps everyone avoid certain complications. If drafted properly—by an estate attorney and in accordance with the provisions of your state’s probate code—a well-crafted estate plan protects your right to make informed and independent decisions about your health, your wealth, and the legacy you’d like to leave behind.
If You Meet Any of These 5 Criteria, You Need More than a Will
Far too many people make the mistake of thinking that a last will and testament is the only estate planning document worth writing. Although this belief isn’t entirely misplaced—after all, taking the time to draft even a simple will could spare your family a great deal of trouble and inconvenience—a boilerplate will or internet-template testament doesn’t typically protect the interests of anyone who meets any of the following criteria:
- Owns their own home.
- Has a child or children.
- Has a husband, wife, or domestic partner.
- Is recently divorced, but never updated an existing will or reviewed their beneficiary designations.
- Anticipates or hopes to grow old, retire, or apply for federal benefits programs like Medicaid or Medicare.
Many wills fall short because few incorporate provisions beyond lists of heirs and assets. You can, of course, write a very long and complex will that directs the distribution of everything from your kitchen appliances to your home—but that may not be the best idea, especially if you suspect there’s even a small chance that an angry heir or opportunistic creditor could try staking their own claim in court.
How Estate Plans Protect Much More than Inheritance Rights
Everyone has their own vision of what constitutes a generous or just legacy. But most people, regardless of circumstances, can cement their preferences for sickness, old age, and inheritances by creating an estate plan that includes or accounts for the following.
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A last will and testament. Again, a valuable document but it can’t do everything. Still, it’s one of a few ways to keep your estate from being parceled up by a judge—a judge who won’t have any choice but to refer to your state’s intestacy statutes when determining who gets to be your heir—and who has no rights to an inheritance.
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An advance directive. Also known as an advance health care directive, this is a provision in your will or a separate document that explains your preferences for end-of-life care. Your directive helps ensure that you receive care to a limit you find acceptable in the event that you’re ever seriously injured and unlikely to recover.
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A candidate for executor. Your executor is the person—a friend, family member, or lawyer—responsible for submitting your will to the court, administering probate, and ensuring that your instructions are executed in deference to your last wishes. Executors are sometimes referred to as “estate representatives” or “personal representatives” in Texas and in Arkansas.
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Guardianship preferences. If you have a minor child or children, you can use your will to nominate a guardian for them. Even if you’re married, selecting a guardian is critically important—if you and your spouse are seriously injured or killed, the court may have to make a custody decision on your behalf.
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Powers of attorney. This document is a legal directive authorizing another person or party to make certain decisions or conduct specified transactions in your stead. Different types of powers of attorney serve various purposes. A medical power of attorney, for instance, grants a trusted individual the right to make decisions about your care in the event you’re unable to consent to a procedure. In contrast, a durable power of attorney allows a close friend or relative to manage your money, such as giving them authorization to pay your rent or mortgage if you’re incapacitated.
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Digital interests. Texas and Arkansas have both adopted similar variants of the Revised Uniform Fiduciary Access to Digital Assets Act, or RUFADAA, which gives your executor the legal right to take control of your most treasured digital assets—including valuable cryptocurrency wallets—before transferring them to your estate and distributing them to heirs.
What Your Family Stands to Lose If You Don’t Have a Plan
If you pass away without an estate plan, you won’t have to deal with the fallout—but your friends and family will.
In both Texas and Arkansas, if and when somebody dies intestate, their spouse or other surviving relatives must still open a probate claim to dissolve their estate. But instead of receiving the inheritance you’d want them to have, the court will refer to a rigid set of laws, parceling up your estate on your behalf.
Intestacy laws favor close living relatives, but can lead to your preferred heirs receiving much more or much less of an inheritance than you’d have preferred.
The Challenge of Leaving Behind Real Property in Multiple States
All your estate planning documents are valid only if they meet requirements set by your state of residence. Many states—including those on both sides of Texarkana—will honor the provisions of an out-of-state will, so long as the document is valid under the laws of the state in which it was executed.
However, while a Texas court or Arkansas judge would likely let your executor open probate in the county court holding jurisdiction over your case, they would almost certainly reject a request to oversee the probate of a home, commercial plot, or other real property titled in another state.
Arkansas Law on Out-of-State Assets
Arkansas has different laws that apply to various types of probate claims. The Arkansas Constitution, for instance, specifies that an out-of-state resident’s local property holdings fall under the jurisdiction of “the county wherein is situated the greater part, in value, of the deceased person’s Arkansas home or lands.”
In certain cases, an executor who has already opened probate in another state may submit a petition to initiate an alternate form of proceedings known as ancillary probate. By providing out-of-state probate documents, an Arkansas court may allow the executor to bypass a series of time-consuming formalities.
However, the executor will still have to travel to Arkansas—perhaps more than once, and possibly at their own expense—to administer and close the petition. If the deceased person was an Arkansas resident, then the laws of whichever state the decedent’s property is located in take precedence.
Texas Law on Out-of-State Assets
If you’re a Texas resident whose primary place of residence is in the Lone Star State, then your executor must file a petition to open probate in the court having jurisdiction over your out-of-state property. Depending on the laws of that state, this may or may not involve ancillary probate.
If you’re not a Texas resident, then many of the same principles that hold true in Arkansas apply to Texas, too—a local judge may accept your out-of-state will, but require that property-related transactions be conducted in a Texas court and in accordance with Texas law.
Using a Trust to Keep Out-of-State Properties Out of Probate in Every State
Your estate comprises everything of value that you possess in every state in which you own assets. Even if many of your assets don’t require a deed or title, the law considers them to be your property.
After you pass away, your properties—cars, jewelry, art, and land—must pass from your estate to your individual heirs or other beneficiaries. In most cases, this means your executor must file a probate petition, manage your assets for several months, and pay your creditors before distributing inheritances. However, probate isn’t an inevitability: a revocable living trust could help keep your property out of court altogether.
How a Revocable Living Trust Helps You and Your Family
The term revocable living trust may well conjure images of unrestrained affluence, but you need not be wealthy to have your own trust.
In simple terms, a trust is a type of legal entity that can receive, own, and manage a wide range of assets. Much like a family-owned business or a limited liability corporation, a trust can have an identity somewhat separated from that of the person—or people—who use its assets, own the rights to its name, and direct its day-to-day operations. And trusts, like companies, are almost always formed to fulfill a specific set of objectives.
Revocable living trusts, for instance, are typically established by an individual trustor—that’s you. These documents serve many purposes, but are most often used to:
- Protect your privacy by re-titling your home and other properties in the trust’s name.
- Ensure the separation of personal properties from those acquired jointly and in the course of marriage.
- Condition inheritances far beyond the limitations of a will, with trustors reserving the right to stagger trust distributions or earmark funds for a child’s college tuition or living expenses.
However, the most frequently touted advantage of trusts is that they help avoid probate in its entirety. So long as the trustor is alive, they retain the right to use and access trust assets as they see fit. They may transfer assets into the trust’s custody, or return a trust-held title to their own name. But, when they pass away, all of the items, possessions, and properties owned by the trust remain in the trust’s care. They don’t revert to the deceased trustor’s estate, and, for that reason, aren’t subject to probate.
One of our knowledgeable Estate Planning Lawyers at Ross & Shoalmire would be happy to provide you with comprehensive solutions for securing your multiple properties so your beneficiaries can enjoy them for years to come.
