Arkansas

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Arkansas Asset Protection Overview

Debtors in Arkansas may opt for the federal or state bankruptcy exemptions. Statute*

Arkansas offers only nominal protection to homestead – probably not even worth a few hours’ attorney fees to make sure that it applies. Properly structured life insurance arrangements can be protected for creditors. The upside for debtors is that annuities are exempt from creditors.

Arkansas Statutory Creditor Exemptions

For additional detailed information on the use of life insurance, annuities, pension plans, and employee benefit plans for wealth preservation and asset protection, see advanced life insurance

Arkansas Homestead

The Arkansas homestead exemption is classified into two types of homesteads: rural and urban. A debtor may only choose one type.

• State Homestead Exemption:The homestead outside any city, town, or village, owned and occupied as a residence, shall consist of no more than one hundred sixty (160) acres of land, with the improvements thereon, to be selected by the owner. The homestead shall not exceed in value the sum of twenty-five hundred dollars ($2,500), but, in no event shall the homestead be reduced to less than eighty (80) acres, without regard to value.

Statute [16-66-210]

• Federal Homestead Exemption: Real or personal property if it is being used as a residence, is exempt. The homstead exemption limit for singles is $800, and $1,250 for couples.

Statute [16-66-218]

Arkansas Rural Homestead Exemption

• The rural homestead exemption is limited to 160 acres and up to $2500.

Statute

• The homestead must be no less than 80 acres.

Statute

• A couple may not double the homestead exemption amount.

See In re Stevens, 829 F.2d 693 (8th Cir. 1987).

Arkansas Urban Homestead Exemption

• The urban homestead exemption is limited to 1 acre and up to $2500.

Statute

• The homestead must be no less than 1/4 acre.

Statute

Arkansas Homestead Cases

• Lynn Carl Middleton, et al. v. Geraldine Lockhart, et al.,
  No. 04-473 (Ark. 10/20/2005)

• Berniece M. Groce v. Director, Arkansas Dept. of Human Services,
  CA02-1274 (Ark.App. 06/11/2003)

• Tri-State Delta Chemicals, Inc. v. Michael Wilkinson,
  55 S.W.3d 304 (Ark.App. 09/26/2001)

• Kenneth G. Middleton and Lynn Carl Middleton
  v. Geraldine Lockhart et al,
  43 W.W.3d 113 (Ark. 04/26/2001)

• Triple D-R Development, LLC v. FJN Contractors, Inc.,
  986 S.W.2d 429 (Ark.App. 03/03/1999)

• James Newberry, et al. v. George S. Scruggs, et al.,
  No. CA97-891 (Ark.App. 02/04/1998)

Arkansas Life Insurance

• Life insurance benefits of insured or beneficiary is exempt and shall not be subjected to the payment of any debt. [16-66-209]

  However, in re Hudspeth, 92 Bankr. 827 (1988), the court held that the state exemption contained in Ark. Code Ann. § 16-66-209 of the value of all insurance benefits without limitation was unconstitutional because Article 9 § 2 of Arkansas’s Constitution imposes a $500 limited exemption from creditor claims. Further, in Federal Sav. & Loan Ins. Co. v. Holt, 894 F.2d 1005 (8th Cir. 1990), the Court imposed a $500 exemption ceiling on life insurance benefits and policies’ cash surrender value.

Statute

Arkansas Annuities

• Annuity contract are exempt. [23-79-134]

Statute

• Disability proceeds are exempt. [23-79-133]

Statute

• Life, health, or disability insurance policy cash values, limited to the $500 exemption listed in Sections 9-1 & 9-2 of the Arkansas Constitution, are exempt.

See In re Holt, 97 B.R. 997 (W.D. Ark. 1988).

Arkansas IRAs & Pension Plans

• IRA deposits up to $20,000 are exempt, if they were deposited over one year prior to filing for bankruptcy. [16-66-218(b)(16)]

Statute

• ERISA-qualified plans are exempt.

Statute

Arkansas Fraudulent Transfers

For additional detailed information relating to fraudulent transfers, including the text of the Uniform Fraudulent Transfers Act, see fraudulent transfers

Arkansas Fraudulent Transfer Act

• Arkansas Fraudulent Transfers Act

Arkansas Fraudulent Transfer Cases

Federal Circuit Court

• In re Southern Health Care of Arkansas, Inc.,
  2004.C08.0000595 (8th Cir. 05/10/2004)

State Appellate Court

• Lynn Carl Middleton, et al. v. Geraldine Lockhart, et al.,
  No. 04-473 (Ark. 10/20/2005)

• Dennis Martindill v. Robert Stanton,
  No. CA04-8 (Ark.App. 06/01/2005)

• George T. Ginsburg, et al. v. Phyllis Ginsburg,
  No.CA 02-207 (Ark. 06/26/2003)

• The Entertainment & Leisure Corp., et al. v.
  RazorBack Entertainment Chancellor Corp,
  No. CA 00-876 (Ark.App. 05/16/2001)

• Middleton v. Lockhart,
  43 S.W.3d 113 (Ark. 04/26/2001)

• Wonderland Cave & Clube, Inc. v. Tara Hughes,
  No. CA 99-251 (Ark.App. 12/08/1999)

• Thomsen Family Trust v. Peterson Family Enterprises Inc.,
  989 S.W.2d 934 (Ark.App. 05/19/1999)

• Sands Apts. v. Bank of McCrory and Fletcher C. Lewis,
  No. CA 97-740 (Ark.App. 02/11/1998)

• Wesley Roberts and Environmental Suppply
  v. David Feltman and D & W Textiles,
  1996.AR.580 (Ark. 11/0719/1996)

• Janet Renfro v. Jerry Eugene Adkins and Juanita C. Adkins,
  1996.AR.50 (Ark. 02/09/1996)

• Clark v. Bank of Bentonville,
  824 S.W.2d 358 (Ark. 02/03/1992)

• Johnson v. Ramsey,
  817 S.W.2d 200 (Ark. 10/21/1991)

• Saunders v. Adcock,
  462 S.W.2d 219 (Ark. 01/25/1971)

Arkansas Trusts

For additional detailed information relating to the use of trusts for asset protection, including foreign and domestic asset protection trusts, see trusts.

Arkansas Trust Act (Non Self-Settled)

• Arkansas Trust Act

Arkansas Spendthrift Trust Act

Any retirement plan which meets the requirements of section 401 or section 403 of the Internal Revenue Code of 1986, as amended, which contains a prohibition against alienation and a prohibition against attachment shall be conclusively presumed for the purposes of Arkansas law to be a spendthrift trust.

• Arkansas Trust Act

Arkansas Spendthrift Trust Cases

• In re Wayne H. Schultz, Jr., Debtor,
  No. 4:04-bk-20602 (Bankr. E.Ark. 04/25/2005)

• Medical Park Hospital v. BanCorpSouth Bank of Home, Arkansas,
  No. 03-1199 (Ark. 05/06/2004)

• Harris J. Buchbinder, et al. v. Bank of America. N.A.,
  30 S.W.3d 707 (Ark. 11/09/2000)

Arkansas Business Entities

Arkansas Acts

• Arkansas Corporation Act
• Arkansas Limited Partnership Act
• Arkansas Limited Liability Company Act

Arkansas Charging Order Statute

• Arkansas Charging Order (LLC)

Arkansas Charging Order Cases

• No cases yet

Arkansas Alter Ego & Corporate Veil Cases

• Jerry Bullington v. Helen Palangio,
  45 S.W.3d 834 (Ark. 06/21/2001)

• Clara Crutchfield v. Russ-Mar, Inc., Donna Fleharty and Michael Fleharty,
  No. CA 98-901 (Ark.App. 03/17/1999)

Useful Arkansas Links

For additional detailed information relating to financial frauds and tax scams, see http://www.quatloos.com

• Arkansas Secretary of State
• Arkansas Attorney General
• Arkansas Bar Association

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