A Tale of Two Letters

The difference between a revocable and irrevocable trust is that you can change a revocable trust, but you can’t do anything with an irrevocable trust except use any income it generates. Keep this in mind as you read about this recent case.

William Ash was the beneficiary of an irrevocable trust created by his mother's will.  Ash also personally owned another batch of stock in a bank  (worth $1,241,920).  Ash was advised to set up a trust to protect the stock from his creditors.

He claims that he hired an attorney to create a new revocable trust to receive the stock. He met his attorney at the bank and signed some documents. All he remembers is that he saw that the stock was going into a trust.

The documents actually included a stock power that transferred his individually owned stock into the irrevocable trust created by his mother, which he found out when he tried to borrow money from the bank secured by the stock. The bank declined because the stock was now owned by the irrevocable trust, and the trustee didn't agree to the loan.

Ash sued the bank for putting the money in the wrong trust. The trial court granted summary judgment to the bank; in other words, the bank won its argument. The Arkansas Court of Appeals mostly agreed with the trial judge.

The Court of Appeals restated its position that you really ought to read things before you sign them. Ash signed the transfer of the stock into the irrevocable trust, and therefore he lost control. However, the Court of Appeals did find that there was still a question as to whether or not the bank breached a duty of care to Ash when it let him make the transfer.

All of this headache was caused by the presence of just two little letters on the front of the trust documents--i and r, turning a revocable trust that would have let Ash keep control, into an irrevocable trust.  If you want to read the whole case, look for a link here.

KATV Channel 7--Setting up a Pet Trust

Well, Peanut wasn't sure about all the commotion in the studio, but everyone else enjoyed petting him! Check out Jason's segment on setting up pet trusts HERE.

It is estimated that at least five million pets end up in shelters when their owners die. Worse, at least 60% of them are euthanized because they are not adopted.

Call us for a consultation or for a copy of our report on pet trusts. 501-374-0616 And as always, thank you KATV Channel 7 for letting us visit with you and your viewers!

LITTLE ROCK, Ark. (KATV) — It's important to have your pets taken care of in case something happens to you.

Attorney Jason Files explains how to set up a pet trust.

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Living Trusts on KATV Channel 7

See Jason Files on KATV's Good Afternoon, Arkansas on November 19, 2018. 

 WATCH HERE

LITTLE ROCK, Ark. (KATV) — Attorney Jason Files describes what a living trust is and in what ways people would use them.

"A living trust is similar to a will, in that it is a way to transfer your property to your heirs. But, it has some advantages-- it is faster; it is private; it doesn't require the court to be involved- it avoids probate; it can be cheaper. It is also different in that a trust takes effect immediately, not on your death. It can be used if you become temporarily disabled- you can have a successor already lined up who will be able to put your assets to use for you.

 What a trust is-- it is a separate entity into which you can put your property. With a revocable or "living" trust, you can take those things out of the trust at any time. You are still in control. It is basically like a treasure chest that you have the key to.

Who is a trust for-- not just for wealthy people. Not right for everybody; if you have a very limited estate there may be an easier way to avoid probate.

What happens at death-- the living trust becomes an irrevocable trust. The successor trustee takes over, and must follow the dictates of the person who created the trust. The creator has much more flexibility in what happens versus distribution through a simple will. If you have a minor child, the trust can continue until they are an adult. If you have an heir who can't handle money, you can keep their inheritance protected."

Get a free consultation by calling 501-374-0616 to talk to an attorney about what is right for your situation. We focus our practice in Pulaski County, Saline County, Faulkner County, Arkansas County, Conway County, Perry County, Pope County, Yell County, and Lonoke County. If you are elsewhere in Arkansas, we can still help, even if that means connecting you to a trusted colleague. Call us today!  

What is Probate in Arkansas?

 Every state has its own laws regarding how to distribute property when someone dies with or without a will. Probate is the legal process to determine what will happen with the person’s property. The person who has died is the “decedent.” 

When someone dies with a will, the will must be “admitted to probate.” In most cases, this must be done within five (5) years of the death. Someone—usually a family member or the person who was appointed by the decedent as the administrator—files a claim in probate court. In most counties in Arkansas, it costs $165 to file (Attorneys are charged $185). Other costs will include attorney fees, the cost to publish notices, administrator bonds, and more. Depending on the size of the decedent’s estate, costs can grow into the tens of thousands of dollars. 

The proceedings are like most other court cases. The filings and any hearings are open to the public. That means anyone can look up the case. In many counties in Arkansas, the filings can be found online at : https://caseinfo.arcourts.gov/cconnect/PROD/public/ck_public_qry_main.cp_main_idx 

Probate can also take a long time. The judge will help resolve any disputes, such as a will contest. Beneficiaries or heirs can contest their share of an estate, or someone could challenge the validity of a will. The court will require an inventory of the estate, and creditors will want what is due (mortgage, e.g.). Some assets, like a piece of art, may have to be appraised to determine value. It can also take time to change the title to assets. Then the estate will be distributed. Of course, the larger the estate, the more complicated the process can become. 

Get a free consultation by calling 501-374-0616 to talk to an attorney about what is right for your situation. Often, it is safer and less expensive to set up a living trust, which can avoid probate altogether. We focus our practice in Pulaski County, Saline County, Faulkner County, Arkansas County, Conway County, Perry County, Pope County, Yell County, and Lonoke County. If you are elsewhere in Arkansas, we can still help, even if that means connecting you to a trusted colleague. Call us today!