How to Distinguish Estate Assets from Corporate Assets in Arkansas
Detailed Answer
When a relative forms a corporation during your loved one’s life, assets may overlap. Arkansas law treats decedents’ estate assets under the Probate Code and corporate assets under the Business Corporation Act. You can separate these assets by following four key steps.
1. Understand the Probate Process in Arkansas
The probate court oversees a decedent’s estate. Under the Arkansas Probate Code, the personal representative must identify and collect all assets titled in the decedent’s name. See Ark. Code Ann. Title 28, Ch. 41. Only assets that the decedent owned at death form part of the estate.
2. Conduct an Inventory and Appraisal
The personal representative must file an inventory and appraisal within 60 days of appointment. See Ark. Code Ann. § 28-41-126. Review bank statements, deeds, titles and account records. Assets held by a corporation in its own name do not belong to the estate.
3. Recognize Corporate Ownership
Under the Arkansas Business Corporation Act, a corporation enjoys separate legal existence. See Ark. Code Ann. Title 4, Ch. 27. Shares or membership interests belong to shareholders, not the decedent’s estate unless the decedent owned shares directly and did not transfer them before death.
4. Watch for Commingling and Veil Piercing
Courts may pierce the corporate veil if the corporation lacks genuine separation from its owners. Look for commingled funds, undercapitalization, or use of corporate assets for personal benefit. See Ark. Code Ann. § 4-33-114. If a court pierces the veil, corporate assets could become part of the estate.
Helpful Hints
- Review corporate bylaws, meeting minutes and articles of incorporation for asset transfers.
- Check deeds, titles and account statements for the exact ownership name and vesting.
- Obtain certified copies of corporate filings and annual reports from the Arkansas Secretary of State.
- Search the probate court docket for estate inventories and appraisals.
- Consider consulting both a probate attorney and a corporate attorney for complex matters.