Arkansas Property Code #2
Next section in this series is Chapter 2 of the Arkansas Property Code – 18-2-101 to 18-2-106, called Commutation of Interests. What the heck does that mean is your first question. Well, this statute explains how you value things such as life estates or a dower interest if a court for some reason decides to reduce them to present cash value. It includes an actuarial table, interest rate to use, and an example of how you calculate the value. We’ll discuss Arkansas dower rights in the next month or so in connection with another section of the code.
In a decade of practice, I’ve used this statute exactly once, as part of a settlement negotiation I believe. It might be useful if, for example, children of a deceased individual wanted to buy the spouse’s dower right and the parties were trying to determine a value. I wish I could direct you to a case involving it, but they’re all tax cases not specifically dealing with the statute but rather how an interest is taxed.