USA – ARKANSAS Law and Practice Contributed by: Aaron Bundy and Danya Bundy, Bundy
back into the estate in full, with a 20% penalty on top. The lessons are old ones: fund early, respect the entity, keep genuine nontax purposes, and never gift from a hospital bed. The quality of the appraisal file matters more than the headline number. Because Arkansas imposes no transfer tax, discount - ing is a federal exercise. The same concepts appear in state court valuation disputes, including fiduciary accountings and buyout litigation, where discounts are argued case by case rather than applied auto - matically. Will and trust contests based on capacity and undue influence increase as the population ages, and blend - ed families are the most reliable accelerant, with con - flict between a surviving second spouse and children of the first marriage surfacing at the first death. Non- probate transfers generate a growing share of dis - putes, since beneficiary designations, joint accounts, payable-on-death arrangements, and beneficiary deeds move property outside the will and are often changed late in life under circumstances families find suspicious. Fiduciary litigation is expanding as beneficiaries grow more willing to demand accountings and challenge trustee conduct. No-contest clauses add a distinct - ly Arkansas edge, and the stakes rose in 2025. In Lasiter v Newland & Associates , a surviving spouse who had waived her rights in a premarital agreement attacked the plan anyway, through an administration challenge, an election against the will, and a suit to void the agreement. The court held she had triggered the forfeiture clauses, applied them as written with no probable-cause exception, and ordered her to repay more than USD1.4 million she had already received. A beneficiary weighing litigation in Arkansas may be risking the entire inheritance plus a judgment, and drafters must coordinate no-contest clauses with marital agreements so a spouse can enforce contract rights without triggering forfeiture. Farm succession fights and partition threats among co-owning heirs 5. Wealth Disputes 5.1 Trends Driving Disputes
are constants, and guardianship contests over elders and their assets round out the picture. 5.2 Mechanism for Compensation The Arkansas Trust Code supplies a complete reme - dial scheme. Courts may compel performance, enjoin threatened breaches, order accountings, and appoint special fiduciaries. A trustee who commits a breach is liable for the greater of the amount required to restore the trust to where it would have been absent the breach or the trustee’s profit from it, under Sec - tion 28-73-1002 of the Arkansas Code Annotated, and a trustee must disgorge profits made from the trust even without a breach. Removal, reduction or denial of compensation, constructive trusts, and tracing into the hands of transferees are available, and attorney fees may be awarded as justice and equity require under Section 28-73-1004. A fiduciary who litigates self-interestedly should not expect the trust to fund the defence. In probate, similar remedies run against personal rep - resentatives, and tort theories such as fraud and con - version can support punitive damages in egregious cases. The rationale is restoration first and deter - rence second. The measure aims to put beneficiaries where faithful administration would have left them and to make disloyalty unprofitable for the fiduciary who tries it. 6. Roles and Responsibilities of Fiduciaries 6.1 Prevalence of Corporate Fiduciaries Corporate fiduciaries are well established. Bank trust departments and trust companies, including several strong regional institutions, administer a substan - tial share of Arkansas trust wealth, regulated by the Arkansas State Bank Department or, for national insti - tutions, the Office of the Comptroller of the Currency. Corporate trustees are particularly valuable where trusts hold farmland and timber requiring active man - agement across decades, and families often pair a corporate trustee with an individual co-trustee who knows the family.
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