It's Time to Have the Talk

     The advances in medical technology have given us the ability to live longer and healthier lives.  Although these innovations have allowed us to spend more quality time with our loved ones, certain procedures and techniques are used to keep individuals “alive” when their mind and body have ceased to function naturally.  This type of treatment may be or may not be what you desire if/when you reach a situation in which you are no longer able to make decisions for yourself.  In order to ensure that your wishes are carried out upon your incapacity, it is recommended that every individual over 18 years of age have a General Power of Attorney, Health Care Power of Attorney and a Living Will.  The following is short summary of each one of these documents:

     1.    General Power of Attorney (“GPOA”)—a GPOA grants another individual, known as your agent, to handle your assets in the event of your incapacity.  This would allow your agent broad authority to make decisions concerning your real and personal property.  Because of this broad power, it is essential that you name an agent you trust to make such decisions. 

     2.      Health Care Power of attorney (“HCPOA”)—a HCPOA is similar to a GPOA except that the agent is granted the authority to make decisions concerning your medical decisions and obtaining access to your medical records or information. 

     3.   Living Will—a Living Will lets your loved ones and your attending physician know your desires concerning treatment that would only prolong the process of dying, such as receiving artificial hydration and nutrition, when you can no longer make decisions for yourself.  Additionally, a Living Will is only used in the instance that you have an incurable or irreversible condition that will cause your death within a relatively short time frame. 

    It’s that time of the year where we gather with family, exchange gifts and watch an endless cycle of Christmas movies.  While your family is together, it may be the perfect time to discuss your preferences for your end of life decisions.  It may be unpleasant to think about but I’m sure everyone would rather make these decisions themselves and relieve your family of that burden.     

Beneficiary Deeds and Avoiding Probate

     Even for those that don’t know the ins and outs of the probate process, most people know enough that they would like to avoid probate because of the time and money it requires.  There are several ways to avoid probate altogether but the beneficiary deed is a very simple method of allowing real property to be transferred without the court’s supervision.

     A beneficiary deed is a deed that transfers an owner’s interest in real property at the death of the owner.[1]  Unlike other types of deeds, the beneficiary deed must be filed during the owner’s lifetime and does not involve any type of exchange of value between the owner and beneficiary.   However, the process and procedures for filing a beneficiary deed are similar to filing any other type of real property deed and should be filed at the circuit clerk’s office in the county where the real property is situated.    Additionally, a beneficiary deed can be revoked during the owner’s lifetime. 

     Although this is a very simple and cost effective method of transferring property, a beneficiary deed does have its limits.  When an owner passes away, the beneficiary of the real property still receives the property subject to any mortgages, liens, or other encumbrances that may be in existence at the time of the owner’s death.   Moreover, the Department of Human Services may be able to make a claim against the real property transferred to recover certain types of aid received by the owner or beneficiary.[2]

     There are minority of other states that allow this type of deed including the surrounding states of Missouri[3] and Oklahoma[4].  So if you own property in Arkansas or any of the other states who allow beneficiary deeds and you want that property to transfer at your death without court supervision, you might think about filing a beneficiary deed.  By doing this, your real property will automatically be taken out of your estate and avoid the long and costly process of probate. 

---

[1] See Ark. Code Ann. § 18-12-608 (West)

[2] See Ark. Code Ann. § 20-76-436 (West)

[3] See Mo. Ann. Stat. § 461.025 (West)

[4] See Okla. Stat. Ann. Tit. 58, § 1252 (West)

Wills: Sanity Not Required

As I stated in my last post, wills are the simplest part of an estate plan.  However, there are many formalities and hoops to jump through before a will is considered effective under Arkansas law.  I will discuss some (but not all) of the issues below that frequently come up when trying to finalize a will.

1.     Who can make a will?

Under Arkansas law, any person can make a will but you must be at least eighteen years of age and “of sound mind.”[1]  Many of you may be thinking there is no way your parents’ or grandparents’ will is of any use because they are out of their mind.  Luckily for you (and your family), the courts have followed a simple test for over a century to determine whose mind is “sound.”  A person is said to have a sound mind if (a) the person can remember, without prompting, the extent and condition of their property; (b) to whom the person is giving the property; and (c) the relations of those entitled to receive it.[2]  It personally makes me feel a lot better that Arkansas’ highest court actually said “[c]omplete sanity in the medical sense is not required.”[3]

2.     How many witnesses do you need?

Generally, two disinterested witnesses who aren’t receiving some beneficial interest from the will must attest the will.[4]  The fact that an interested witness attested your will won’t invalidate your will but the interested witness will forfeit any amount that exceeds what they would have received under Arkansas’ intestacy statutes.[5]  However, an interested witness won’t forfeit anything if there are at least two other disinterested witnesses.  Similar to who can make a will, these witnesses must be at least eighteen and competent. 

3.     Who needs to sign the will?[6]

The person making the will (the “Testator”) and the witnesses all need to sign the will.  The Testator’s signature should be located at the end of the document and be made or acknowledged in the presence of the other two witnesses.  Additionally, the witnesses should also sign in the Testator’s presence.  These are only the beginning of all of the nitpicky rules concerning when and how a will is signed. 

4.     How do ensure your will is effective?

To ensure your will is effective, you should really speak to someone who is competent and routinely works in estate planning.  Although you can attempt to draft a will yourself, you should at least let someone look over your documents to ensure they will accomplish what you intended.  Otherwise, a will or devise may be invalid or your assets and property could go to unintended recipients. 

---

[1] Ark. Code Ann. § 28-25-101

[2] Noland v. Noland, 330 Ark. 660, 665-66, 956 S.W.2d 173 (1997).

[3] DesLauriers v. Marilyn Irene DesLauriers Revocable Trust, 2010 Ark. App. 211, 374 S.W.3d     732, 736 (2010).

[4] Ark. Code Ann. § 28-25-102

[5] Id.

[6] Some of these rules do not apply to holographic wills.  

Wills & Why We Need Them

WILLS & WHY WE NEED THEM

     No one wants to think about it, but our time on this earth is very limited.  We can't predict how or when our lives will come to an end.  For that reason, every person, especially those with children, should begin thinking about the future and make plans to ease the burden for their family.  A Last Will and Testament (a "Will") is a document that can relieve some of these burdens and ensure your last wishes are carried out. 

     A Will is the simplest part of an estate plan that specifies and controls the disposition of your property at your death.  A Will is a legal document that is drafted during your lifetime that can address several issues including but not limited to:

• Property and asset distribution;
• Naming the person who will handle your affairs; and
• Naming legal guardians for your children.

     In the absence of a Will, Arkansas law deems that person to have died "intestate" and your property and assets will be distributed according to Ark. Code Ann. § 28-9-214 and § 28-9-215.  If any of the family members listed under these statutes cannot be found, your property will ultimately be given to the county where you resided at your death.  See Ark. Code Ann. § 28-9-215.  Moreover, the court will be in charge of naming who administers your estate and naming a guardian for any minors involved.  

     There are positives and negatives to every type of estate planning but a Will is a safety net to ensure your family, favorite charities, or friends receive your property and assets the way you intended.  Of course, there are several formalities and hoops to jump through to ensure a Will is effective but I'll save that for an upcoming post.