Disclaimer: This is general information about Arkansas law and is not legal advice. For advice about a specific situation, contact a licensed Arkansas attorney or the probate court in the county where the decedent lived.
Detailed Answer
When a person dies without a valid will in Arkansas, they are said to have died “intestate.” Any cash or funds that represent the decedent’s assets — including leftover proceeds from a recent sale of the decedent’s property — become part of the decedent’s estate and must be handled through the probate process unless the funds pass outside probate by operation of law (for example, by joint ownership with right of survivorship or by a named beneficiary).
Here are the basic steps that typically apply under Arkansas law:
- Who controls the proceeds initially? If the decedent had a personal representative (executor) named in a will, that person would ordinarily collect and control sale proceeds. If there is no will, the probate court will appoint an administrator (often a close family member) to collect the assets, including sale proceeds, and manage the estate. If sale proceeds are sitting in escrow or in a bank account, the escrow agent or bank may require a court order or an estate representative to release the funds.
- Are the proceeds estate property? Yes, unless the funds already belonged to someone else or passed by operation of law (for example, joint tenancy with right of survivorship, or payable-on-death account/beneficiary designation). If the decedent owned the property and the property was sold before final distribution, the sale proceeds are treated as estate assets.
- Pay debts and expenses first. The administrator or personal representative must use estate assets to pay funeral expenses, valid creditor claims, taxes, and the costs of administration (e.g., probate fees, attorney fees). Arkansas probate procedures control the timing and priority of these payments. Only after creditors and expenses are paid can any remaining funds be distributed to heirs.
- Distribution under Arkansas intestacy rules. After paying debts and administration costs, the administrator distributes the remaining assets according to Arkansas’s intestate succession rules. Those rules prioritize close relatives (typically the surviving spouse and children first, then parents, siblings, and more remote relatives). The exact share each heir receives depends on who survives the decedent and their relationship to the decedent. Arkansas’s probate and intestacy rules are part of the Arkansas Code (see Title 28 for statutes governing decedents’ estates and probate procedures).
- What if no relatives are found? If no lawful heirs can be identified after a diligent search, estate assets may eventually escheat to the State of Arkansas. The state also maintains procedures for unclaimed property; funds distributed to the state may become subject to Arkansas’s unclaimed property program.
- When funds bypass probate. Not every dollar the decedent owned becomes part of probate. Common examples of non-probate transfers include funds held as joint tenants with right of survivorship, accounts with payable-on-death (POD) beneficiaries, life insurance or retirement accounts with named beneficiaries, and certain trust assets. If sale proceeds were paid directly to a surviving joint owner or to a named beneficiary, those proceeds generally do not enter intestate distribution.
- Small estate procedures. Arkansas provides streamlined procedures for small estates that may allow someone to collect modest account balances or personal property without full probate. The size thresholds and procedures differ from full probate; check with the county probate clerk or an attorney to see if they apply.
Useful statutory starting points (Arkansas Code): general probate and intestacy matters are in the Arkansas Code (Title 28). For court rules and county procedures, contact the local county probate or circuit court clerk. You can browse the Arkansas Code here: https://www.arkleg.state.ar.us/.
Hypothetical Examples
- Example 1 — Estate probate and distribution: A homeowner dies intestate; their house is sold during probate for $150,000. The administrator deposits the proceeds into the estate account, pays $10,000 in funeral bills and $20,000 in valid creditor claims and realtor fees. The remaining $120,000 is distributed under Arkansas intestacy rules to the heirs (surviving spouse and children, if any) as determined by the court.
- Example 2 — Joint tenancy bypasses probate: A decedent and a sibling owned a rental property as joint tenants with right of survivorship. After the decedent dies, the sibling sells the property and receives all proceeds directly. Because of the survivorship interest, the sale proceeds belong to the surviving joint tenant and do not become estate property subject to intestate distribution.
- Example 3 — Unclaimed escrow funds: A house sale closed but the buyer’s check was returned and escrow still holds funds because no administrator has been appointed. The escrow agent will typically require a court order or appointment of an administrator before releasing funds; otherwise the funds may remain with escrow or be turned over under state unclaimed property rules if left unclaimed long enough.
Helpful Hints
- Locate any wills, beneficiary designations, deeds showing joint ownership, or account titling documents as soon as possible.
- If you find yourself holding sale proceeds and no will exists, contact the county probate or circuit court to learn how to open an estate or apply for appointment as administrator.
- Gather documents: death certificate, bank statements, escrow closing statements, deeds, and creditor invoices. These will help the administrator and the court.
- Determine whether the funds are truly estate property. Joint-tenancy and beneficiary-designated funds usually bypass probate and go directly to the co-owner or beneficiary.
- Expect creditors to have a limited time to present claims against the estate. Paying valid claims comes before distributions to heirs.
- Consider an experienced probate attorney if the estate is large, complex, contested, or if heirs disagree about distribution. An attorney can help navigate Arkansas probate and intestacy law.
- Check the Arkansas Code for statute language and the local probate court’s website or clerk for procedural forms and local rules: Arkansas Code and legislative resources and your county circuit court/probate clerk’s page (search from the Arkansas Judiciary website at https://www.arcourts.gov/).
If you want, I can outline the likely distribution to heirs based on a short list of surviving relatives (e.g., spouse only; spouse and children; children only; parents only). That will help show how Arkansas intestacy rules commonly allocate leftover sale proceeds after debts and expenses are paid.