Life & viatical settlements in Arkansas

How life settlements work in Arkansas

Life and viatical settlements in Arkansas are regulated under a dedicated statute: the Arkansas Life Settlements Act, Ark. Code Ann. §§ 23-81-801–818, which requires life settlement providers and brokers to be licensed in the state and sets standards for disclosures, advertising, and minimum payments.

The Arkansas Insurance Department licenses life settlement providers and brokers and serves as the primary regulatory authority for Arkansas consumers with insurance-related questions. Arkansas law also gives policy owners a statutory right to rescind a life settlement contract within 15 days after the date it is executed by all parties.

For cancer patients in Arkansas, the most common path is a viatical settlement under IRS §101(g), where proceeds are generally tax-free at the federal level if the insured is certified as terminally or chronically ill. Arkansas generally follows federal income tax treatment for qualifying viatical settlements.

Medicaid impact in Arkansas

A life or viatical settlement can affect eligibility for Medicaid and other means-tested public assistance programs. Arkansas's Medicaid asset limit is currently $2,000 for individuals (2026) under Aged, Blind, and Disabled (ABD) Medicaid, the same as the federal SSI standard. Because Medicaid rules vary by program and individual circumstances, Arkansas residents should review current eligibility requirements through the Arkansas Department of Human Services – Division of Medical Services (Arkansas Medicaid) before accepting a settlement.

Depending on your situation, planning tools such as special needs trusts or pooled trusts may help preserve eligibility for certain public benefits. These arrangements generally should be established before settlement proceeds are received.

This is often the most important planning consideration for Arkansas cancer patients considering a life or viatical settlement. We can help connect you with an Arkansas elder law attorney if additional guidance is needed.

What’s different about Arkansas

• A dedicated Life Settlements Act (Ark. Code Ann. §§ 23-81-801–818) governs transactions, including licensing requirements for providers and brokers
• Owners have a statutory right to rescind a life settlement contract within 15 days of execution
• State oversight rests with the Arkansas Insurance Department, which also enforces a specific viatical settlements regulation
• Medical and policy information remain protected under HIPAA privacy requirements
• Federal tax-free treatment may apply to qualifying viatical settlements under IRS §101(g)
• Medicaid eligibility may be affected by settlement proceeds depending on the recipient's circumstances

Major Arkansas cities we serve

Statewide. Our licensed specialists work with policies throughout Arkansas, including Little Rock, Fort Smith, Fayetteville, Springdale, Jonesboro, North Little Rock, Conway, Rogers, Bentonville, and Pine Bluff, and surrounding communities. No in-person meetings are required. Documentation, signatures, and notarization can all be completed remotely.