Paul Rabalais' Louisiana Succession Law Blog

Probate Pain - Avoid the Family Drama!

I had a telephone call yesterday and with a woman and her brother passed away in the past couple of weeks and her brother didn’t have any children and her brother had been sick for awhile. She said that the family, her siblings are stressed and they are concerned so I walked her through the steps that the family is going to have to go through to get everything settled. The brother that passed away owned a business, investments, vehicles, ect and it was all frozen. So I walked the family through the steps and the steps were as follows to get everything settled.

Number one was he had a will naming two of his sisters as co-executors, so step one was getting those two sisters confirmed as whats called the independent executors. Number two, is once they are confirmed as executors then they will be able to access his funds so they can pay bills and take care of things while this is taking place. Step three was to sell the things that need to be sold. Their bother had a home that needed to be sold. Step four was complied a detailed list of all the assets and along the way having good and open communication with all of theparties involved in this are all on the same page. Finally once things are sold and all of the money is collected and all of the necessary estate accounts then we will go back to court again and all the remaining estate assets to be dispersed equally among the heirs.

Our conversation was a little more indebt than that and I told her the next step is to get all 4 heirs on a conference call since not all of them are in the same area. Where they can hear from the horse’s mouth the steps so we can get all of their questions answered because it’s so much easier to settle an estate when all of the heirs are on the same page, everyone knows what’s going to happen, there are no surprises, no false expectations and it really provides for a smooth transition for the family. So my point is when someone passes away its just makes things so much easier in the long run to get all of the parties that are involved can work together in open communication and get on the same page, agree on that plan and get settled.

Then, it’s our job to create that plan and implement that plan to keep those relationships strong. If you have questions about a succession, perhaps you an executor and you want to make sure these legal steps are being followed and keeping those relationships strong you may want to give us a call on our toll free number 866-491-3884. I’m Paul Rabalais, have a great day!

Helping 4 Generations of Family Memmbers

I've been working with a family recently and we set up the grandmother's estate plan to leave things for her daughter, but the daughter and her husband both passed away so now things going to go to the grandson of the grandmother so it has been 4 generations of this great family that we have been working with. We are now setting things up so that the grandson who has some young children and take some of this inheritance that he received from his parents passing away and set up some trusts for her children so that he knows that the rest of his life time no matter what happens to him, his two young daughters will always have funds set aside for them in trust, so that they have a head start on life and have a gift from their grandparents.

It is never too early and it is never too late to start estate planning. It can have a profound impact on your family, your relationships and your descendants. Just with some simple planning and some simple strategies you can make sure things stay in the family. If you have questions about that call at our toll free number, 866-491-3884. Have a great day!

WARNING: Don't Advoid Estate Tax Return Filings

I'd like to tell you about a matter that my partner in Metairie, Chris Kane and I are working on together. He has been working with a family in Louisiana in the Metairie area and the wife passed away back in 2004 and for one reason or another the family just never got around to filing an estate tax return. Chris Kane did some research and realized that the estate tax exemption back in 2004 was 1.5 million dollars and its 5 million dollars today. The family wants to make sure that there's not going to be these major IRS estate tax problems when the surviving spouse passes away in the future.

We are going to go ahead and revisit all of those tax issues; file an estate tax return, get all the property appraised as it should have been back in 2004 and 2005 and just eliminate all of those pervious tax concerns even though their mother passed away 9 years ago. Keep in mind, that if the value of an estate is such that an estate tax return is required it's never too late to get that stuff taken care of. If you never take care of it than interest and penalties can continue to accrue and you want to get that taken care of and nip that in the bud.

If you have concerns about whether estate tax returns should have been filed after a death of a family member you will want to give us a call at 866-491-3884. We can help you determine what you need to do to make sure there are no future tax problems for the family in the future. I'm Paul Rabalais, have a great day!

How I Answered 17 Different Succession Questions

I spoke with a gentleman yesterday on the phone and his name was Joe. He was named as the executor of his uncle’s succession. When I first talked to him, his uncle had died two days earlier and I asked him if he had any special concerns. Joe asked me 17 different questions. Joe had never been through this before and Joe had very good questions. So I just walked him through the steps from where he was yesterday, to getting the estate settled. From contacting different third parties, from getting confirmed as the executor, from opening up estate accounts at the bank, to selling assets as executor of the estate, from being what is called the “independent executor”, to compiling the list of assets to handling personal effects, to the sale of the property, to handing final medical expenses. We went through the whole thing from A to Z.

After about an hour, he felt that he was really relieved knowing that he had a plan to take care of everything he needed to take care of and he knew he could rely on us to handle it. So we started working with him yesterday and we look forward to working with Joe and walking through that process. It can be a complicated process especially if you are not working with someone that really understands those interknit Louisiana succession probate rules.

If you are an executor of estate and you want to make sure that you don’t get pushed around or you don’t get caught by a rule that you didn’t know about, make sure you check with us and we will walk you through that process. You can check out things on our website at www.rabalaislaw.com or you can give us a call state wide. We have 5 attorneys around the state that can handle successions and probates in any of the 64 Louisiana parishes.

Our toll free number is 866-491-3884. Have a great day!

I Pretended the Audience Was in Their Underwear

A couple of months ago I was asked by the Louisiana State Bar Association to be a speaker at the Sixth Annual Solo and Small Firm Conference. The woman who requested that I speak said there would be about 400 Louisiana attorneys at the conference, and she wanted me to speak on "Successions: Basics and Updates."

So, on Friday, February 15, 2013, I stepped up to the podium to deliver my presentation. Even though it was a talk presented to hundreds of lawyers, you can benefit from understanding the probate system in Louisiana. Here's what we discussed:

1. Review the Will. First I told them it was important that the Will be reviewed (if a Will exists), and that the attorney go over all of the assets of the deceased. It's important to identify the heirs and it's important to know what assets will have to be transferred to heirs and what debts, if any, need to be paid as part of the Succession.
2. To Administer or Not. I then told the audience of lawyers that it was important to make a determination of whether to "administer" the Succession or not. I told them that if the Succession was relatively simple, that they could petition the court to have the deceased's assets re-titled. However, if there were frozen accounts that needed quick access, or if an asset needed to be sold quickly, or if the deceased had debts that needed to be paid, or if there was any other complicating factor, a Succession Representative must be confirmed or appointed. I told the audience of lawyers that there are four different kinds of Succession Representatives: Execuotors, Independent Executors, Administrators, and Independent Administrators. I talked about how an "independent administration" is simpler. We also talked about how the executor must open an Estate Account and deposit all Succession funds in the Estate Account.
3. Detailed Descriptive List. I then talked about which assets are probate assets and which are not. Probate assets include real estate, bank accounts, stocks, bonds, mutual funds, vehicles, and business interests. Nonprobate assets include IRAs, 401(k) accounts, life insurance, annuities, out-of-state real estate, US Savings Bonds that are co-owned. We talked about some of the exceptions to the abovve, and we talked about how some assets get transferred outside of the Louisiana Succession proceeding. 
4. Taxes. We spent a good bit of time talking about taxes. We addressed how the estate tax exemption is $5 million, adjusted for inflaction annually. We talked about income tax effects of inheriting, and we talked about the step-up in bais for capital gains tax purposes.
5. Finishing Up. We discussed obtaining the final court order - the Judgment of Possession - and how to transfer assets to heirs once the necessary court orders have been signed.

After I finished, I was surprised at how many of the lawyers asked me to autograph the copy of my book that they received. My hope is that I helped people and families go through this often stressful probate process in Louisiana in a way that the relationships of the surviving family members flourish.

 

Special Rules for Out of State Executor

Hey, I’m often asked whether an executor of a Louisiana succession or probate must be a Louisiana resident and the answer is no. I’m working with a family right now out of Washington and their father died. He lived in Louisiana, but all of the children live out of the state. So the question they had was can an executor live out of the state? The answer is yes, but there are a couple of rules that apply specifically to out of state executors.

 One, is an out of state executor must appoint someone in Louisiana as what’s called their registered agent for service of process and the reason for that is if the executor ever gets sued, the out of state executor must have named someone in Louisiana who can received those lawsuit papers.

That’s one factor for an out of state executor; the other factor is that when they go to open the estate account, the estate account must be opened at a Louisiana bank.

That is just one Louisiana state succession rules some out of state executors would prefer to open at estate account where they live, but it needs to be a Louisiana bank. You could get smacked with a pretty hefty penalty for not compiling with that rule.

So be aware of that, an out of state person can be an executor If you have any questions about becoming an executor of a succession or an Louisiana probate we handle those in all of the 64 Louisiana parishes. We would be happy to talk to you about it, give us a call at 866-491-3884. Have a great day!

The Difference Between Probate and Non-Probate Assets

I was working with a family earlier this week and they came in because a family member had passed away.   The family came in to talk about getting the probate done, or in Louisiana we called it a succession, they called it a probate.  A probate is all of that court supervised process of getting things transferred when somebody dies.

We went through all of their assets and we realized that a probate was not even necessary because you may own what is called "probate assets" or you may own some "non-probate assets."  Common non-probate assets are assets that when you pass away they don't have to go through the courts to get things transferred.  Things like IRA's that have a designated beneficiary, annuities that have a designated beneficiary, life insurance and there are non-titled personal effects that typically don't go through the court process.

They had some assets in a trust, and again if the trust is worded right the courts don't need to oversee the distribution of those assets because they are not frozen.  So all of these assets that this family had didn't need to go through the courts because everything they had was a non-probate asset.  Now, if you do own a probate asset in your name when you pass away there is a court process including real estate that is in your name, investments that are in your name, those are the kinds of things that will often have to go through the court process to get things transferred.

In conclusion, realize that there are probate assets, non-probate assets, some will have to go through the court process, and some will not have to go through the court process.  I'm Paul Rabalalis and if you have some questions, maybe a family member passed away and you don't know what to do about getting assets transferred, we work in all 64 Louisiana parishes.   You can call us at our toll free number at 866-491-3884.

Why Would You Refuse An Inheritance?

Hey, I want to talk about an important matter in settling an estate. Particularly when a family is trying to avoid estate tax over the long term.

I was working with a woman a couple of days ago. Her father had passed away and she was scheduled to inherit over a million dollar inheritance. So what she chose to do (we had been talking about this in recent months) was to refuse her inheritance or the IRS term is "disclaim" her inheritance. The Louisiana term is "renounce" her inheritance. It would allow it to go on down to her children.

So the benefit of that is all of that seven figure inheritance doesn't go into the daughter's estate, it's not going to be part of the daughter’s estate when the daughter passes away, and she wants to leave it her children. It just flows straight from the father through the daughter, to the grandchildren so it's not like the daughter is receiving this seven figure inheritance and then just has to give it away $13,000 or $14,000 at a time.

 Be aware that this opportunity to disclaim, renounce, or refuse an inheritance is there. Be very careful because it has to be timely. You can't do it more than nine months after somebody dies and you can’t do it after you've already received the inheritance. So you have to understand this on the front end before you start handling the probate and transferring assets around.

 If you're involved in an estate and you want to make sure that the estate tax over the long term is minimized for that family (it's a 55% tax) you can give us a call. We handle settling estates in all 64 Louisiana parishes. 866-491-3884. Ya'll have a great day and go tigers!

Four Common Questions About the Louisiana Succession: What is it? How Long? How Much? Can We Avoid it?

The Lousiana Succession is a complicated and confusing procedure. Most Louisiana residents are involved in a Louisiana Succession a handful of times during their lifetime. When a family member passes away, the surviving family members are starting at square one - they often have no idea what a Succession is or what is involved in completing it.

Many years ago it was determined that when someone dies with an asset in their name, the asset becomes "frozen" and it is up to the applicable court system to oversee the management of the asset and the ultimate disposition of the asset to the heirs. Is having the court system oversee the distribution of assets after every person's death the most efficient way to provide for a speedy estate settlement while maintaining the relationships of surviving family members? No way - but that's another newsletter article.

I've likely been asked, and have answered, tens of thousands of questions about the Louisiana Succession over the years. The following are four questions that we get regularly - with answers.

1. What is the difference between Probate and Succession? Practically - nothing. When someone who resides in Louisiana dies, all of their assets are frozen and the family must go through a court process to access the assets. This court process in Louisiana is called a "Succession." All of the other states call their court process "Probate."
2. How long does a Succession take? This question is common because all of the deceased's assets are frozen until the Succession is complete and the appropriate Judge assigned to the Succession signs the necessary Succession court orders and assets have been transferred to heirs in compliance with the court orders. Every Succession requires the Affidavits be submitted by heirs, detailed lists of assets and debts be prepared by the law firm and filed at the courthouse, executors or administrators be confirmed or appointed, and other procedural rules must be followed to the letter. Some Successions are completed in a matter of months. When theres' a glitch, it can go into years.
3. How much does it cost to complete a Succession. Tough question. They are all different. The only certainties are that there is no standard cost for a Louisiana Succession, and that every Louisiana Succession encompasses court filing fees and law firm charges that are always in the thousands or tens of thousands. Other states have fixed costs. For example, the California Probate Code has a complicated formula for determining California probate costs, based in large part on the value of the estate. In California, a $1 million estate will incur fixed probate costs of $46,000. The key for Louisiana families who are handling a Succession for a deceased loved one is to get the fixed reasonable probate costs in writing prior to obligating yourself to use the legal services of a particular attorney or law firm.
4. How can we avoid the Louisiana Succession / Probate? Some assets that you own (IRAs, for example) avoid probate by their nature because you can designate a beneficiary or beneficiaries to receive your IRA when you die. Other assets (your home, for example) must go through probate if the home is in your name when you die. You can transfer your "probate assets" to your revocable trust before you die so that your designated "trustee" can quickly transfer the assets from your trust to your heirs after you pass away without our broken court system and law firms needing to get involved.

“The handling of my mother’s succession was extremely professional. A very easy process for me and my siblings. Everything was explained to us on a step by step basis. You and your staff were the utmost professionals.” Michael Corry, Lafayette, LA

“Everything was handled perfectly. I was very happy that I did not have to make any long trips and you resolved everything for me. Catherine was so nice and helpful. Thanks for taking care of all that I did not understand.” Vickie Boyd, Jayess, MS

Access to Tenants in Common Account

Different people, when they pass away, they have different kinds of accounts. Yesterday I was working with a really nice lady. Her husband passed away just a few weeks ago. She brought in her brokerage statement and she was thinking all of the accounts were frozen.

There were three accounts in that brokerage statement.

-          One was her deceased husband's IRA,

-          One was her IRA,

-          One was called a tenants in common account.

All three accounts will be handled differently. Her IRA, that won't change, it will just stay in her name. Her deceased husband’s IRA, that account once the brokerage firm gets a death certificate and has her fill out some paperwork, they'll move his IRA into her IRA. The tenants in common account, Louisiana doesn’t even recognize tenants in common as a form of ownership, but many of the national brokerage firms will title accounts that way. That account is frozen, she can’t access that. We've got to go through the probate or succession.

 Her husband  had a will and he left everything to her. So she can’t access that tenants in common account even though her name is on the account. It's frozen because his name is on the account also. So we'll go through the succession and it will take a little while for her to get access to that tenants in common account.

Be aware,  you really have to look at what kind of account it is and how its titled to determine what access the family has, if any, after a family member or account owner passes away. If you need help with getting a succession completed or getting access to things, maybe a family member passed away and you need help getting access to things, give us a call. We do successions in all sixty four Louisiana parishes. It starts with a phone call 866-491-3884. Have a wonderful day!