General DefinitionA decedent's intestate estate is defined as any part of the estate not effectively disposed of by a valid will. Sec. 28-9-202
Order of DistributionUpon the intestate's death, the estate will pass as follows:
- To the children of the intestate and the descendants of each child of the intestate who may have predeceased the intestate. The children and descendants will take per capita or per stirpes;
- If the is no surviving descendant, to the intestate's surviving spouse unless he/she had been continuously married less than three years, in which event the surviving spouse will take merely 50% of the intestate's estate;
- If the intestate is survived by no descendant or spouse, to the intestate's surviving parents;
- If the intestate is survived by no descendant but is survived by a spouse to whom the intestate has been continuously married less than three years next preceding the death of the intestate, the entire portion of his or her estate which does not pass to the surviving spouse will pass to the intestate's surviving parents, sharing equally, or to the sole surviving parent if only one of them is living;
- If the intestate is survived by no descendant or parent, then all of his or her estate which under subdivisions (3) and (4) of this section would have vested in the intestate's surviving parent or parents will pass to the intestate's brothers and sisters and the descendants of any brothers and sisters of the intestate who may have predeceased the intestate, such brothers, sisters and descendants taking per capita or per stirpes;
- If the intestate is survived by no descendant, then in respect to such portion of his or her inheritable estate as does not pass as detailed above, the inheriting class will be the surviving grandparents, uncles, and aunts of the intestate. In this situation, each surviving grandparent will take the same share as each surviving uncle and aunt, and no distinction will be made between the paternal and maternal sides. In other words, a maternal grandparent, uncle, or aunt shall take the same share as a paternal grandparent, uncle, or aunt and vice versa. If any uncle or aunt of the intestate shall predecease the intestate, the descendants of the deceased uncle or aunt will take, per capita or per stirpes, the share the decedent would have taken if he or she had survived the intestate;
- If the intestate is survived by no descendant, then in respect to the portion of his or her estate as does not pass as detailed above, the inheriting class will be the surviving great-grandparents and great-uncles and great-aunts of the intestate. In this situation, each surviving great-grandparent will take the same share as each surviving great-uncle and great-aunt, and no distinction will be made between the paternal and maternal sides. In other words, a maternal great-grandparent, great-uncle, or great-aunt will take the same share as a paternal great-grandparent, great uncle, or great-aunt and vice versa. If any great-uncle or great-aunt shall predecease the intestate, the descendants of the decedent will take, per capita or per stirpes, the share the decedent would have taken if he or she had survived the intestate.
- If heirs capable of inheriting cannot be found within the inheriting classes described above, the real and personal property of the intestate shall pass according to Sec. 28-9-215. Sec. 28-9-214.
If there is no person capable of inheriting under Arkansas law, the estate will escheat to the county where the decedent resided at death. Sec. 28-9-215(3).
Common Law or Community PropertyArkansas is a common law, elective share state.
CapacityAny person of sound mind 18 years of age or older may make a will. Sec. 28-25-101.
DraftingThe execution of a will, other than holographic, must be by the signature of the testator and of at least two witnesses. The testator must declare to the attesting witnesses that the instrument is his or her will and either:
- Himself or herself sign;
- Acknowledge his or her signature already made;
- Sign by mark, his or her name being written near it and witnessed by a person who writes his or her own name as witness to the signature; or
- At his or her discretion and in his or her presence have someone else sign his or her name for him or her. The person signing must write his or her own name and state that he or she signed the testator's name at the request of the testator.
The signature must be at the end of the instrument; and the act must be done in the presence of two or more attesting witnesses. The attesting witnesses must sign at the request and in the presence of the testator. Sec. 28-25-103.
When the entire body of the will and the signature must be written in the proper handwriting of the testator, the will may be established by the evidence of at least three credible disinterested witnesses to the handwriting and signature of the testator, notwithstanding there may be no attesting witnesses to the will. Sec. 28-25-104.
Any person, 18 years of age or older, competent to be witness generally in Arkansas may act as attesting witness to a will No will is invalidated because attested by an interested witness, but an interested witness, unless the will is also attested by two qualified disinterested witnesses, will forfeit so much of the provision made for him or her as in the aggregate exceeds in value, as of the date of the testator's death, what he or she would have received had the testator died intestate. Sec. 28-25-102.
BeneficiariesA beneficiary includes, in the case of a decedent's estate, an heir, legatee and devisee and, in the case of a trust, an income beneficiary and a remainder beneficiary.
ModificationsA will or any part of a will is revoked
- By a subsequent will which revokes the prior will or part expressly or by inconsistency; or
- By being burned, torn, cancelled, obliterated, or destroyed, with the intent and for the purpose of revoking it by the testator or by another person in the testator's presence and by the testator's direction. Sec. 28-25-109(a).
If, after making a will, the testator is divorced or the marriage of the testator is annulled, all provisions in the will in favor of the testator's spouse so divorced are revoked. With these exceptions, no will or any part of a will is revoked by any change in the circumstances, condition or marital status of the testator. Sec. 28-25-109(b).
Naming of Personal RepresentativeDomiciliary letters testamentary or of general administration may be granted in the following order of priority:
- To the executor or executors nominated in the will;
- To the surviving spouse, or his or her nominee, upon petition filed during a period of 30 days after the death of the decedent;
- To one or more of the persons entitled to a distributive share of the estate, or his or her nominee, as the court in its discretion may determine, if application for letters is made within 40 days after the death of the decedent, in case there is a surviving spouse and, if no surviving spouse, within 30 days after the death of the decedent; and
- To any other qualified person. Sec. 28-48-101(a).
No person is qualified to serve as domiciliary personal representative who is:
- Under 18 years of age;
- Of unsound mind;
- A convicted and unpardoned felon, either under the laws of the United States or of any state or territory of the United States;
- A corporation not authorized to act as fiduciary in this state;
- A person whom the court finds unsuitable; or
- A natural person who is a nonresident of this state, unless he or she has appointed the clerk of the court in which the proceedings are pending, and the clerk's successors in office, or some person residing in the county of probate and approved by the court, as agent to accept service of process and notice in all actions and proceedings with respect to the estate. Sec. 28-48-101(b).
Admission to ProbateNo will must be admitted to probate and no administration must be granted unless application is made to the court for admission to probate within five years from the death of the decedent, subject only to the exceptions stated in this section. Sec. 28-40-103. No will is effectual for the purpose of proving title to or the right to the possession of any real or personal property disposed of by the will until it has been admitted to probate. Sec. 28-40-104.
An interested person may petition the court of the proper county:
- For the admission of the will to probate, although it may not be in his or her possession or may be lost, destroyed, or outside the state;
- For the appointment of executor if one is nominated in the will;
- For the appointment of an administrator if no executor is nominated in the will or if the person so named is disqualified or unsuitable, or refuses to serve, or if there is no will. Sec. 28-40-107.
Submission of WillAfter the death of a testator, the person having custody of his or her will must deliver it to the court which has jurisdiction of the estate or to the executor named in the will. Upon the written motion of an interested person, the clerk will issue a citation against any person who is alleged to possess the will of a testator directing that the alleged will be produced at a time specified in the citation.
A person who willfully refuses or fails to deliver a will after being duly ordered by the court to do so shall be guilty of contempt of court. He or she shall also be liable to any aggrieved party for damages which may be sustained by such a refusal or failure. Sec. 28-40-105.
NotificationsIf an interested person desires to be notified before a will is admitted to probate or before a general personal representative is appointed, he or she may file with the clerk a demand for notice. A demand for notice is not effective unless it contains a statement of the interest of the person filing it and his or her address or that of his or her attorney. After filing the demand, no will shall be admitted to probate and no personal representative shall be appointed until the notice has been given. Sec. 28-40-108(a).
At any time after the issuance of letters, any person interested in the estate may serve, in person or by attorney, upon the personal representative or upon his or her attorney and file with the clerk of the court where the proceeding is pending, with a written admission or proof of service, a written request stating that he or she desires written notice by ordinary mail of the time and place of all hearings on the settlement of accounts, on final distribution, and on any other matters for which any notice is required by law, by rule of court, or by an order in the particular case. Sec. 28-40-108(b).
InventoryWithin two months after his or her qualification or as the court may direct, a personal representative must file a true and complete inventory of all property owned by the decedent at the time of his or her death, except such interests as terminated by reason of his or her death, describing each item of property in detail and setting out the personal representative's appraisement of the fair market value of the property as of the date of the death of the decedent. The personal representative must append to the inventory his or her affidavit to the effect that the inventory is complete and accurate to the best of his or her knowledge and belief and that the personal representative was not indebted or obligated to the deceased at the time of his or her death except as stated in the inventory. Sec. 28-49-110(a).
Errors or omissions in an inventory should be corrected by supplemental inventory or the next accounting of the personal representative or as the court may direct. Sec. 28-49-110(b).
Homestead, Exempt Property, Dower, Curtesy and the Family Allowance
If the owner of a homestead dies leaving a surviving spouse, but no children and the surviving spouse has no separate homestead, the homestead is exempt and the rents and profits vest in the surviving spouse during his or her natural life. However, if the owner leaves one or more children, the child or children share with the surviving spouse and be entitled to one-half (1/2) the rents and profits till each of them arrives at 21 years of age. Sec. 28-39-201(a).
The surviving spouse and minor children are entitled to the decedent's exempt personal property, tangible or intangible valued at no more than $4,000. Sec. 28-39-101.
The surviving spouse and children of a decedent are entitled to dower and curtesy rights under Sec. 28-39-301.
When a married person dies testate as to all or any part of his or her estate, the surviving spouse will have the right to take against the will if the surviving spouse has been married to the decedent continuously for a period in excess of one year. In the event of such an election, the rights of the surviving spouse in the estate of the deceased spouse will be limited to the following:
- The surviving spouse, if a woman, will receive dower in the deceased husband's real estate and personal property as if he had died intestate. The dower will be in addition to her homestead rights and statutory allowances; and
- The surviving spouse, if a man, will receive a curtesy interest in the real and personal property of the deceased spouse to the same extent as if she had died intestate. The curtesy interest will be in addition to his homestead rights and statutory allowances; and
- If, after the assignment of dower or curtesy, as the case may be, and the payment of all statutory allowances, taxes and debts, and the satisfaction of all testamentary gifts and devises, there remains some residue of the deceased spouse's estate which is not disposed of by will, then, if the deceased spouse has been survived by no natural or adopted child, or the descendants of any natural or adopted child, and by no parent, brother, sister, grandparent, uncle, aunt, great-grandparent, great uncle, great-aunt, or the lineal descendants of any of them, then the surviving spouse will take by inheritance the undisposed residue. Sec. 28-39-401.
Debts and DistributionsNo claimant should be entitled to payment unless his or her claim should have been duly filed with and allowed by the court except:
- claims for expenses of administration may be allowed upon application of the claimant or of the personal representative, or may be allowed at any accounting, regardless of whether or not they have been paid by the personal representative; and
- the personal representative may pay reasonable funeral expenses and reasonable medical and other expenses incident to the last illness, as well as claims amounting in aggregate to $3,000 or less, no one of which shall exceed the sum of $300. Sec. 28-50-105.
At the time of their allowance, all claims should be classified in one of the following classes, and, if the applicable assets of the estate are insufficient to pay all claims, the personal representative shall make payment in the following order:
- Costs and expenses of administration;
- Reasonable funeral expenses, reasonable medical and other expenses incident to the last illness, and wages of employees of the decedent;
- Claims based on a liability of the decedent for any state tax debt assessed against the decedent, or due at the time of his or her death, or due from the decedent's estate as a result of his or her death; and
- All other claims allowed.
No preference should be given in the payment of any claim over any other claim of the same class, nor should a claim due and payable be entitled to a preference over claims not due. Sec. 28-50-106.
There is no estate or inheritance tax in Arkansas.
Income Tax Charitable Deductions and/or Credits
Arkansas allows a taxpaying resident to deduct itemized charitable gifts in the same manner as the IRS with certain limitations. Sec. 26-51-419.
Artistic, literary and musical contributions are deductible if the taxpayer meets the following conditions:
- The taxpayer earns not less than 50% of his or her income from an art related profession.
- The fair market value of the contribution must be determined by a qualified appraisal.
- The donation must have been made to a museum, art gallery, or other non-profit organization located in Arkansas.
- The Donation may not exceed 15% of the taxpayer's gross income for the year of contribution. Ark. Code Ann. §26-51-422.
Gift Annuity Requirements
Arkansas, a "registration" state, regulates the issuance of charitable gift annuities under Arkansas Code Sec. 23-63-201(d), with more specific provisions found in Rule 90 Charitable Annuity Requirements and Reporting. Charities must obtain a permit from the Arkansas Insurance Department's Finance Division before issuing charitable gift annuities in order to comply with state law. Failure to comply may result in penalties up to $10,000 and suspension or revocation of the charitable annuity permit.
To qualify, applying charities must have been in continuous operation for at least five years (or has an adequate level of management expertise and is associated with a corporation/association that meets the 5-year requirement) and maintain a segregated reserve account for the payment of all gift annuities not properly reinsured.
If you are offering the new IRA to CGA rollover option, updated contracts may need to be submitted for approval. If you adopt the ACGA rate schedule, you may need to submit an updated rate schedule when new rates are issued.
Application ProcessTo register for a permit with the Insurance Department, the charity must submit a detailed application. No fee is required with the Application. The Application for Charitable Annuity Permit must include the following: a list of directors/officers, corporate organizational chart, certificate of incorporation, tax-exempt letter from the IRS, gift annuity payout rate schedule (or statement certifying use of ACGA rates), sample gift annuity agreements, financial statements for the last five years (certified by an independent CPA), copy of any custodian agreement, a board resolution authorizing the creation of the segregated reserve account, investment standards and a Certification of Annuity Liability Valuation (reserves information). If the charity is domiciled outside of Arkansas and invests according to its own state law, the charity must provide a copy of the relevant state law. Sample gift annuity agreements should use a "John Doe" format and assign form numbers to different types of agreements.
Disclosure LanguageArkansas does not specify disclosure language requirements.
Reserve RequirementsThe segregated account must contain the greater of: (i) $50,000; or (ii) the sum of its reserves for all outstanding gift annuity agreements and other liabilities plus a surplus of 10% of its reserves; or (iii) at least equal to the amount of the reserves plus all other outstanding liabilities (if the reserves were calculated by maintaining reserves equal to the aggregate values determined at the dates of contribution of the assets with respect to annuitants then living). In determining the reserves amount (Sec. 23-63-201(2)(A) specifies several acceptable calculation methods), a deduction is permitted for any portion of a gift annuity properly reinsured. The segregated account should be invested either: (i) in accordance with the prudent investor rule stated in Arkansas Code Secs. 24-2-610 through 24-2-619; or (ii) only in securities permitted by Ark. Code Secs. 23-63-801 through 23-63-833, 23-63-835, 23-63-836, 23-63-839 and 23-63-840; or (iii) if applicant is organized under the laws of another state, the state law under which its investments are governed. Arkansas does not specify a minimum requirement for net unrestricted assets.
Annual Filing RequirementsOnce a permit is granted, Arkansas requires annual filings. The filing must be submitted to the Insurance Department's Finance Division within 180 days of the charity's fiscal year end. These filings renew the registration each year and include the charity's most recent audited financial report by a CPA reflecting information on the outstanding annuities with applicable reserves, an organizational chart, a list of new directors with contact information and title and any changes to the annuity program such as new rates or agreements. If the charity invests the segregated account in accordance with the prudent investor rule under Ark. Code Secs. 24-2-610 through 24-2-619, additional information is required, including: (1) a description of its investment philosophy for charitable gift annuities and how the investments of the company are designed to meet future charitable gift annuity obligations; (2) a report from the organization identifying the members of the investment committee charged with making investment decisions regarding charitable gift annuity assets including a description of each committee member's investment expertise; and (3) a certification of the board of directors of the corporation or association that attests that its investments and investment transactions match the organization's philosophy and meet the standards of the prudent investor rule stated in Sec. 24-2-610 through 24-2-619. Arkansas made Annual Statement B (form) available for charities to use as a guide in submitting annual statements. No fee is required.
State Contact InformationArkansas Insurance Department (for permit and annual filing-related inquiries)
1 Commerce Way, Suite 505
Little Rock, AR 72202-2087
Kimberly Johnson, PIR