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Arkansas Trust Administration Guide
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Arkansas Trust Administration Guide

Arkansas successor trustee duties after death under the Arkansas Trust Code, Ark. Code ch. 28-73: notify beneficiaries within 60 days, pay debts, account, distribute.

By Settled Editorial

Arkansas trust administration is the work a successor trustee does to settle a revocable living trust after the person who created it dies. If you were named the successor trustee, you now hold legal title to the trust property, and you are responsible for protecting it, paying valid debts and taxes, keeping the qualified beneficiaries informed, and distributing what is left under the trust terms. Arkansas trusts are governed by the Arkansas Trust Code, a version of the Uniform Trust Code found in Ark. Code Title 28, Chapter 73.

This guide walks through the job step by step, from stepping into the role to making the final distribution. Most of this happens outside court, which is one reason families set up an Arkansas revocable living trust in the first place. But out of court does not mean no rules. The Trust Code sets real duties, and a careful trustee follows them in order. Use this as a planning map, not legal advice, and confirm your steps with a licensed Arkansas attorney.

The Successor Trustee's Job at a Glance

When the settlor (the person who made the trust) dies, a revocable trust becomes irrevocable. The named successor trustee steps in with no court appointment. Here is the usual sequence:

  1. Step into the trusteeship and read the full trust document plus any amendments.
  2. Order certified death certificates and secure the trust property.
  3. Get a trust tax ID number and open a trust bank account.
  4. Notify the qualified beneficiaries that the trust exists, as the Trust Code requires, within sixty days.
  5. Inventory and value the trust assets as of the date of death.
  6. Identify and pay valid debts, final expenses, and taxes.
  7. Keep beneficiaries reasonably informed and provide annual reports.
  8. Distribute the remaining property under the trust terms, then close the trust.

Each step below explains the Arkansas rule behind it.

Step 1: Stepping Into the Trusteeship

When the settlor dies, the revocable trust becomes irrevocable and your authority as successor trustee activates under the trust terms. There is no probate filing and no court appointment for the trust itself.

Once you are serving, Ark. Code 28-73-801 sets the baseline: administer the trust in good faith, in line with its terms and purposes and the interests of the beneficiaries, and under the Arkansas Trust Code. Two related duties run alongside it. Under Ark. Code 28-73-802, you must administer the trust solely in the interests of the beneficiaries, which is the duty of loyalty. Under Ark. Code 28-73-804, you must administer the trust as a prudent person would, considering its purposes, terms, and circumstances and using reasonable care, skill, and caution.

Read the document closely before you act. The trust is your rulebook. It names the beneficiaries, sets what they receive and when, and tells you which powers you hold. Not every trustee has every power, so confirm your authority before you sign or sell anything.

Step 2: Secure Assets and Get Organized

Before anything else, protect what the trust owns.

Order death certificates. Get several certified copies. Banks, title companies, insurers, and transfer agents each want their own.

Secure the property. Change locks if the home sat empty, keep insurance in force, safeguard valuables, and redirect mail. Make a first list of everything the trust holds.

Get a trust tax ID. Once the settlor dies, the trust can no longer use the settlor's Social Security number. Apply for a federal Employer Identification Number (EIN) from the IRS. The trust is now a separate taxpayer.

Open a trust bank account. Run every receipt and payment through one account titled in the trust's name using the new EIN. Mixing trust money with your own is the fastest way to create a dispute.

This ties directly to a recordkeeping duty. Under Ark. Code 28-73-810, you must keep adequate records of the administration, keep trust property separate from your own, and label trust property so the trust's interest shows in the records. A clean paper trail from day one is your best protection. Keep dated copies of every notice you send, every bill you pay, and every report you provide.

Step 3: Notifying the Beneficiaries

This is the duty most successor trustees overlook, and Arkansas puts a firm clock on it. Under Ark. Code 28-73-813, the trustee must keep the qualified beneficiaries reasonably informed about the administration and the material facts they need to protect their interests, and must promptly respond to a beneficiary's request for information unless that is unreasonable under the circumstances.

The statute then sets two sixty-day notice deadlines that apply when you step in after a death:

  • Within sixty days after accepting the trusteeship, notify the qualified beneficiaries of the acceptance and of your name, address, and telephone number as trustee.
  • Within sixty days after you learn that a formerly revocable trust has become irrevocable, including by the death of the settlor, notify the qualified beneficiaries of the trust's existence, the settlor's identity, the right to request a copy of the trust instrument, and the right to a trustee's report.

Unlike some states that use a vague "reasonable time" standard for this notice, Arkansas uses a fixed sixty-day window, so calendar it. Send the notice in writing, keep proof of what you sent and when, and respond to reasonable beneficiary requests as they come in. These notice and reporting rules apply to a revocable trust that becomes irrevocable on or after September 1, 2005. A beneficiary may waive the right to a report or other information, and may later withdraw that waiver.

This duty pairs with the duty to account, covered in Step 6. Together they are the heart of a trustee's obligation to be open with the people the trust is meant to benefit.

Step 4: Inventory and Value the Trust Assets

Build a full inventory of everything the trust owns, then assign each item a date-of-death value. Common categories:

  • Real estate, with an appraisal for the date-of-death value
  • Bank accounts and certificates of deposit
  • Brokerage and investment accounts
  • Retirement accounts and life insurance payable to the trust
  • Business and farm interests
  • Vehicles, jewelry, and other personal property

Date-of-death values matter for taxes and for fair, accountable distribution. Heirs generally receive a stepped-up tax basis on inherited assets under federal rules, so a clean valuation can reduce capital gains tax later when they sell.

Property that the settlor properly retitled into the trust during life is already part of the trust estate. Assets left in the settlor's individual name with no beneficiary designation are not, and may have to pass through Arkansas probate, often through a pour-over will, before they can join the trust. While you hold and manage trust investments during administration, the prudent administration standard in Ark. Code 28-73-804 applies: invest and manage as a prudent person would, considering the trust's purposes and circumstances. You do not need to be an investment expert, but get professional help for a complex portfolio.

Step 5: Paying Debts, Final Expenses, and Taxes

A revocable trust does not make the settlor's debts vanish. As successor trustee, you identify the decedent's valid debts, final expenses, and any taxes, and pay them or hold a clear reserve for them before you distribute. Distributing too early can leave you personally on the hook for a shortfall.

On taxes, the administration usually involves:

  • The settlor's final personal income tax return (federal Form 1040) for the part of the year up to the date of death.
  • A federal fiduciary income tax return (Form 1041) for income the trust earns after death, with an Arkansas fiduciary return (Form AR1002F) as well if the trust has Arkansas income.

Arkansas has no state estate tax and no state inheritance tax, so there is no separate state death tax return here. Federal estate tax applies only to very large estates above the federal exclusion amount, which most estates never reach. A CPA who handles trust returns is worth the cost on anything beyond a simple trust. For more, see the Arkansas creditor claims guide on handling debts during an estate.

Step 6: Keeping Beneficiaries Informed and Accounting

The duty to inform under Ark. Code 28-73-813 does not end with the first notice. The trustee must send the distributees and permissible distributees of trust income or principal, and any other beneficiary who requests it, a report at least annually and at the termination of the trust. The report must list the trust property, liabilities, receipts, and disbursements, including the source and amount of your compensation, a listing of the trust assets, and, if feasible, their respective market values.

Practical version: keep a running ledger, send a clear written accounting on a regular schedule, and give a final accounting before the last distribution. Beneficiaries who can see the numbers are far less likely to fight you. A documented, transparent administration is also your strongest defense if a dispute ever lands in court.

Step 7: Making Distributions and Closing the Trust

Once debts, expenses, and taxes are handled or reserved, you distribute the trust property under the trust terms. Read the document closely. It controls who receives what, in what order, and on what conditions.

  • Specific gifts of named items or amounts usually come first.
  • Outright shares go directly to the named beneficiaries.
  • Continuing or sub-trusts, such as a trust for a minor or a beneficiary with special needs, may need to keep running after the main trust is settled.

If the beneficiaries and trustee want to resolve a question without going to court, Arkansas allows a nonjudicial settlement agreement under Ark. Code 28-73-111. Interested persons may agree on matters such as approving a trustee's report, interpreting the trust terms, or determining the trustee's compensation, as long as the agreement does not violate a material purpose of the trust and includes terms a court could properly approve.

Get a signed receipt for every distribution. When the property is out and the reports are accepted, the trust is closed. Our Arkansas estate settlement checklist helps you track each of these steps in order.

When You May Need the Court

Trust administration is generally private and out of court, which is a key contrast with probate administration in the Circuit Court, Probate Division. But the court is available when you need it. Under Ark. Code 28-73-201, by accepting a trusteeship of a trust with its principal place of administration in Arkansas, the trustee submits to the jurisdiction of the Arkansas courts on matters involving the trust. A trustee may petition the circuit court to resolve a question of administration, approve an accounting, or settle a dispute when an agreement is not possible.

For the court-supervised alternative that funded assets are meant to avoid, see the Arkansas probate guide and the Arkansas executor duties guide, which covers the parallel job of a personal representative in a probate estate.

Trustee Compensation

A successor trustee is allowed to be paid. Under Ark. Code 28-73-708, if the trust document sets the trustee's compensation, follow it, though a court may adjust it when the duties turn out to be substantially different from what was contemplated or the stated amount is unreasonably high or low. If the document is silent, the trustee is entitled to compensation that is reasonable under the circumstances. Reasonable usually turns on the time and skill the work took, the size and complexity of the trust, and what is customary locally. Many family trustees waive a fee to leave more for the beneficiaries, but you are not required to.

Whatever you decide, report the amount and source of your compensation in your accounting so beneficiaries are not surprised.

How This Fits Into Your Estate Plan

Trust administration is the back end of a plan the settlor built years earlier. It works best when the trust was fully funded, meaning assets were retitled into the trust during life. Assets left in the settlor's individual name with no beneficiary designation may still have to pass through Arkansas probate before they can join the trust, often through a pour-over will. The trust controls the funded assets; probate handles the leftovers.

If you are settling a trust now, two related guides help you place the pieces. The Arkansas revocable living trust guide explains how the trust was set up and funded, and the Arkansas estate planning basics guide covers the wider set of documents that surround it. For a side-by-side look at why people choose a trust over a will, see the will vs. trust comparison.

The Bottom Line

An Arkansas successor trustee has a clear job: step into the role, secure and value the assets, notify the qualified beneficiaries within sixty days, pay valid debts and taxes, keep beneficiaries informed with annual reports, and distribute what is left under the trust terms. The Arkansas Trust Code, Ark. Code Title 28, Chapter 73, sets each of these duties, and most of the work happens without a court.

Take it in order and document everything. The two steps trustees skip most often, sending the beneficiary notice on time and accounting clearly, are exactly the two that prevent disputes. Pay debts or hold a reserve before you distribute, and get an Arkansas attorney or CPA involved for real estate, creditor questions, or tax issues. Done carefully, trust administration here is steady, private, and far simpler than full probate.

Sources

This guide is general information, not legal advice. Consult a qualified Arkansas attorney about your situation. It is not legal advice.

Information current as of June 20, 2026

This content is for informational purposes only and does not constitute legal advice. Probate laws and procedures in Arkansas can change. Consult with a qualified attorney for advice specific to your situation. Full disclaimer.

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