Estate Planning Law Firm of Louisiana

Have Your Power of Attorney Approved By Brokerage Firm Before It's Too Late

I took a call from a polite woman this morning. Her father has accounts at Morgan Stanley. Her father is in a home for Veterans. She took her father's durable power of attorney to Morgan Stanley recently so that she can transact her father's affairs. Her father's ability to manage his accounts has diminished.

The brokerage firm basically told her, "We do not honor any power of attorney form except for our own. Take the Morgan Stanley Power of Attorney form to your father, have him sign it in the presence of a Notary, and bring it back to us. Then - and only then - can you transact your father's accounts.

Hopefully, her father still has the mental capacity and physical ability to sign the Morgan Stanley form. If not, the daughter will have no choice but to go through a difficult court interdiction proceeding to have her father declared legally incompetent.

This is just another of many instances where third parties sometimes don't honor a durable power of attorney. My advice - take your Louisiana durable power of attorney to your banks, financial institutions, and investment firms and make sure they will honor it when your Agent needs to use it. It doesn't do any good to have the best Louisiana Durable Power of Attorney in the world, if third parties won't honor it. So make sure they will honor it in advance.

At the end of the call the polite woman asked me to transfer her to our accounting department so she could give them her billing information so we could bill her for the call. I gladly told her, "We never charge anybody for a phone call."

If you need help with Louisiana estate planning issues, feel free to send me an email at paul@rabalaislaw.com, or call our office tollfree at 866-491-3884 to discuss how we might help you accomplish all of your Louisiana estate planning objectives.

Communicate Louisiana Estate Essentials With Your Survivors

Yesterday I reveived a call from a nice woman who was quite concerned about her father. Her mother had died not too long ago and her father took a turn for the worse in the last few days and the outlook was not good.

As the woman explained, her father was very private about his financial affairs and the woman - his only child - had no idea what her father owned or even where his records might be.

Fortunately for this woman, I was able to assure her that this would not be a problem because when her mother died, I handled the succession and we made a complete and detailed listing of every asset her parents had on the date his mother died. It's unlikely things have changed much since then. She was comforted knowing that she had a starting place to go to.

She also wanted to know if there was anything she needed to do hastily since her father's passing may be imminent. I told her "No." I told her she simply needed to care for herself and her father in these final days, and then she can contact me after he dies to start the process of getting everything settled.

This story reminds me to remind you that it is important to communicate at least some basic information about your estate to your survivors. At a minimum, you should communicate:

1. That you have (or you don't have) a plan in place.
2. Where your important papers are.
3. Where they can find a listing of your assets and liabilities.
4. Any attorney or other advisor that you would like them to work with upon your death.

It would also be a nice bonus if you also give them informal instructions regarding your funeral and burial wishes, health care wishes, desires regarding the distribution of personal effects, and instructions regarding how to use your Power of Attorney, and instructions to your executor.

We cover all these things in our Estate Planning Portfolio that every one of our Louisiana estate planning clients leaves our office with and maintains during their lifetime. If you'd like to talk to us at no cost to determine whether you'd like to use our estate planning legal services to plan your Louisiana estate, send me an email at paul@rabalaislaw.com, or give our office a call at 225-329-2450.

Paul Rabalais

Interdiction or Guardianship Procedure in Louisiana

From time to time a family member comes into our office and is required to undergo an Interdiction proceeding (states outside of Louisiana call this a Guardianship) because their loved one is alive but unable to transact their own affairs - and they have not designated anyone to transact for them with a Durable Power of Attorney. For example, let's say that Mom had a stroke and needs to sell her house, but she no longer has the capacity to transact.

A Louisiana Interdiction is more complicated and time-consuming than most people think. Even when it is obvious that a person needs to be interdicted in Louisiana, you have to follow the rules. Here are the rules in general (Note: these are general rules and some circumstances require that additional steps be taken):

1. A family member is the Petitioner and files the Petition for Interdiction. Need Petitioner's and proposed interdict's name, domicile, age, and current address, reasons why interdiction necessary, infirmities of proposed interdict.
2. Petition must be served on the proposed interdict by the sheriff.
3. Children and other parties must be notified by certified mail.
4. If the proposed interdict does not hire an attorney and answer the petition within 15 days, the judge must appoint an attorney to represent the proposed interdict. The court-appointed attorney must personally visit the defendant.
5. The court shall fixed a hearing or trial date.
6. A Judgment signed by the judge must appoint a curator and an undercurator.

This procedure must be followed even if all parties are in agreement that someone needs to be interdicted.

If you have a loved one or family member that needs to be interdicted in Louisiana, let us know. We can expedite the preparation and filing of necessary Interdiction pleadings. Feel free to send me an email at paul@rabalaislaw.com, or give our office a call at 225-329-2450.

Paul Rabalais, Board Certified Specialist Attorney in Estate Planning and Administration

What happens to estate if no surviving spouse, descendants, parents or siblings?

I was working with a nice couple this past Friday on their estate plan. They had accumulated quite a bit of assets. The husband was an only child and his parents and grandparents had passed away. They had two children and no grandchildren. The husband wanted to know, in the absence of a Last Will, who would inherit his estate if he, his wife, and his children all died in a common disaster.

Here's the Louisiana law on the issue: "If the deceased leaves neither descendants, nor brothers, sisters, or descendants from them, nor parents, nor spouse not judicially separated, nor other ascendants, his other collaterals succeed to his separate property. Among the collateral relations, the nearest in degree excludes all others. If there are several in the same degree, they take equally and by heads."

So, in this instance, I'm thinking the husband's aunts and uncles (his parents' siblings) would equally - by heads - divide his estate.

Of course all of this can - and will - change because he will designate in his Last Will who will inherit his estate given that the unlikely scenario occurs.

If you have questions about planning your estate, or if you'd like to inquire about our estate planning legal services, please feel free to send me an email at paul@rabalaislaw.com, or give my office a call at 225-329-2450. Until next time...

Paul Rabalais

"Aforesaid" Estate Planning Documents Can and Should Be Easy To Understand

I find that some lawyers like to "strut their stuff" by creating lengthy, complex legal documents that the educated lay person cannot understand. Often I'll read documents that have language like:

• The said person...
• Wheretofore,...
• At any time heretofore held against the aforesaid parties...
• Why not change, "In the event that," to "If"

In fact, you may have seen some legalese that you'd like to share with our readers. It's everywhere and it cause lawyers and their frustrated clients to spend lots of time (and in many cases lots of the clients money) explaining and reexplaining legal gobbledygook.

I'm on a mission to make all of your estate planning legal documents in Louisiana arranged in a way so that they accomplish all of objectives that need to be accomplished, but in a way that is easy for the educated lay person to understand.

If you have a good example of legalese that you'd like to share, by all means post it as a comment.

Or if you'd like us to arrange an estate planning portfolio of legal documents for you that is written so that you know what you're doing, and your heirs will understand, then send me an email to get started at paul@rabalaislaw.com, or give my office a call at 225-329-2450.

Paul Rabalais

P.S. If you want an easy to understand explanation of Louisiana estate planning terms, purchase my book at Barnes & Noble or amazon.com

Inheritance Rights of an Unborn Child in Louisiana

One of my employees was wondering today about the rights of an unborn child. I'm not going to tell you which employee asked me but I will tell you that one of my employees is 8 months pregnant.

Let's say that new Dad owns separate property. He is eagerly anticipating the birth of his first child when he slips on some Boudreaux's Butt Paste at Babies "R" Us and dies of a head injury. Who gets the separate property?

The answer? As long as the unborn child conceived at the death of the decedent is thereafter born alive, then the child inherits all of his father's separate property.

I've always advocated that parents of minor children have an estate plan in place, but I now also recommend that all parents of unborn children have their estate plan in place. It does not make sense for an infant to inherit outright and have the inheritance overseen by a judge until the child turns 18. Parents of unborn children should make sure that their children's future inheritance is placed in trust and managed by a competent trustee until the child is mature enough to manage it on their own.

Follow Up From Power of Attorney Article in E-newsletter

A while back I prepared durable powers of attorney and other estate planning documents for a nice couple. The husband emailed me and said he had gone to take care of some Social Security issues for his ailing wife at the local Social Security office. He brought along her power of attorney.

Even though the power of attorney was effective immediately, the Social Security office told him he needed to go get doctor's written statements that she was incapacitated. Also, they said they would not honor the power of attorney because it did not expressly give him the right to handle Social Security issues for her.

I emailed him back and told him that Social Security's position had no basis in Louisiana power of attorney law. Nonetheless we've just added language to our durable powers of attorney form so that in the future, the Agent will expressly be permitted to handle Social Security issues. 

Copy of My Recent Developments E-newsletter

Sent out the following Recent Developments E-newsletter to my contacts yesterday. Thought you might be interested in the topics discussed:

In this edition of Recent Developments, you will discover:

• How the Decline in the Value of Your Estate Affects Your Estate Planning;
• Caution: Your Old Power of Attorney May Not Be Worth the Paper It's Written On;
• Avoiding Probate/Succession in Louisiana Worth Carefully Considering;
• Find Out More About Estate Planning, Successions, and Medicaid By Checking Out Paul's Blogs; and
• Did You See My Ad for www.SuccessionAttorney.com?

How the Decline in the Value of Your Estate Affects Your Estate Planning

From an estate planning standpoint, we are living in uncertain times. The stock market lost half its value but is slowly working its way back up. Real estate values dropped. I met with a family last week whose real estate value had dropped from $1,300,000 to $400,000 in a few short months. The estate tax ($3,500,000 exemption for deaths during 2009) is scheduled to disappear in 2010, but reappear with a $1 million exemption in 2011 and beyond. Congress and the President are proposing significant changes to our estate tax laws but nothing has passed yet.

So if you live in Louisiana, what should you do? Married couples often question whether - upon the death of the first spouse - they should leave their spouse "ownership" or "usufruct" of their estate. Here's the short answer: If a married couple has a combined estate in excess of $1,000,000 in fair market value, you should leave the "lifetime usufruct" of your estate to your surviving spouse. None of the assets over which you leave your spouse usufruct will be lumped into the estate of your surviving spouse. If you leave your spouse "ownership," then your estate will be lumped into your spouse's estate for federal estate tax purposes.

If your combined estate is - and will continue to be - less than $1,000,000 in value, then estate tax implications should not need to be factored into your decision. Even if you leave your spouse "ownership," there should be no estate tax when the surviving spouse dies - unless of course they make major changes to tax laws in which case we'll start this conversation all over again!

Caution: Your Old Power of Attorney May Not Be Worth the Paper It's Written On

I've been getting more calls lately from real estate title examiners, investment companies, and clients, about powers of attorney. Many people don't like dealing with old powers of attorney.

Not long ago, a major investment company told me that they will not honor a power of attorney that is more than five years old. I guess they are concerned about their potential liability in the event they were not aware that the person revoked or changed the power of attorney in the previous five years.

Also not long ago, I was talking to the corporate counsel for a major bank. The bank lawyers called me from Dallas to tell me that they don't honor a power of attorney when two people have to act together on the power of attorney.

So, what should you do to make things easy for your family? I suggest that you take a look at your Power of Attorney. If it is more than five years old, sign a new one. And don't set it up so that two people must act jointly on your behalf. It is common that if you want to name more than one person to act for you, set it up so they can act "jointly or separately."

If it's been more than five years and you want to update, let us know. If we are going to update your power of attorney, we will also want to talk to you to make sure that the rest of your estate plan is in order. There have been some changes to our Living Will laws and our Last Will and Testament laws in recent years that you may want to incorporate in your plan.

Avoiding Probate/Succession in Louisiana Worth Carefully Considering

You've probably read about it in the national journals: "Avoid Probate With a Revocable Living Trust." Louisiana traditionally has not been one of the "major players" in the Revocable Living Trust talks - primarily because probate (or in Louisiana it's called "Succession") in Louisiana can be simpler and less costly than the probate processes that exist in other states like California where statutory required delays exist, and legislatively imposed court costs and attorney fees drive a family's probate costs through the roof.

In Louisiana, however, a succession can be a cost and an aggravation that can be avoided with careful preparation. In East Baton Rouge Parish, for example, the court costs have TRIPLED in recent months, due largely to the fact that they are building a new monster courthouse downtown. And it seems lately that unreasonable delays exist in either getting a judge to sign a probate order, or in getting the courthouse employees to promptly process the necessary paperwork.

So is there a better alternative? Maybe. A revocable living trust that is both set up correctly and funded with all of your potentially probatable assets can make matters easier for your surviving loved ones. And when you consider that the financial cost of settling a succession may cost $5,000, $15,000, $25,000 or more (a married couple will incur this cost twice), then why not do some work on the front end to get your affairs in order with a revocable living trust?

But before you create your revocable living trust, read two things. First, read my blog post about how to avoid a Louisiana succession. Second, read my blog post about a situation where a revocable trust did not avoid probate. Then if you think a revocable living trust may be right for you, let us know and we will guide you through it.

Find Out More About Estate Planning, Successions, and Medicaid By Checking Out Paul's Blogs

In case you haven't noticed, I write a fair amount about protecting your Louisiana estate. I'm on a mission to make sure that Louisiana family relationships prosper from generation to generation, and hard-earned wealth stays in the family. I've written quite a bit on these subjects. In addition to my book which you can purchase from Amazon.com, Barnes & Noble, and other fine bookstores, I also maintain three separate blogs (short for "weblog"). Feel free to check out:

• My Louisiana estate planning blog;
• My Louisiana Medicaid Planning blog; and
• My Louisiana Successions law blog.

I'm confident you'll find my blogs helpful. I'd even like to encourage you to post a comment or two. On my Successions blog, you can even subscribe to get email updates every time I post to the blog.

Did You See My Ad for www.SuccessionAttorney.com?

If you read the Baton Rouge Advocate, you may have noticed my print ad. It is running for 30 consecutive days. I just released my new report, "How To Avoid or Minimize Taxes, Probate Costs, Executor Fees, Attorney Fees, Family Conflicts and Delays After the Death of a Loved One."

The ad and the Report have created a small tidal wave of families interested in coming in to discuss how a deceased loved one's estate can be settled quickly, professionally, and amicably. The Succession Report is creating so much interest that people are "dying" to read it.

To get your free report go to www.SuccessionAttorney.com.

Until next time...

Paul A. Rabalais

Board Certified Specialist Attorney in Estate Planning and Administration

Understand Tax Laws Before You Sell or Donate Appreciated Property

I was visiting with a wonderful married couple today. They had seen me speak to a big church group a while back and they attended my Barnes & Noble book signing and mini-seminar. They were telling me how fantastic their children and grandchildren were.

They have owned some acreage for many years. It has appreciated significantly in value, but they are not at risk for paying federal estate tax (at least not unless there are some major changes in estate tax laws - which might happen). They were considering selling this property to one of their grandchildren. I pointed out that if they sell this property to their grandchild, they will pay approximately $100,000 of capital gains tax because there has been so much appreciation since their original acquisition.

However, if the grandchild inherits this property, then the grandchild will inherit it at a stepped-up basis. All of that appreciation that would be taxed if they sold or gave away would no longer be taxed.

Here's my rule: If you are certain there will be no federal estate tax, DON'T GIVE AWAY APPRECIATED ASSETS. If you give them away, your donees will receive your basis (called a "carry-over" basis). Let your heirs inherit the asset and let them enjoy the stepped-up basis.

Of course every circumstance is different and other factors may affect your decision, but make sure you know the rules before you take action.

Can Person With Usufruct Lease Property?

Let's say that "Mom" dies and leaves the lifetime usufruct of her home to her husband ("Step-Dad") because Mom wants to make sure that her husband has a roof over his head for the rest of his lifetime. After Mom dies, Step-Dad decides he wants to move into another home, and he wants to lease Mom's home so he can get some good rental income for his lifetiime. As usufructuary, can he rent out Mom's home and keep all of the rental income? Good question.

Yes, he can lease, alienate or encumber his usufruct. However, all contacts cease when he dies. So, let's say Step-Dad leases Mom's house for three years. Six months after Step-Dad and the tenant sign the lease, Step-Dad dies. The lease terminates and Mom's children own the house outright. They can evict the tenant even though the tenant has a three year lease.

Also, Step-Dad needs to know that he is responsible for the abuse that his tenant makes of the property.

Paul Rabalais