Paul Rabalais' Louisiana Succession Law Blog

How To Handle a Lost Will and Unfunded Living Trust

I met with a gentleman this past Thursday. He had emailed me the night before inquiring about how to get a Judgment of Possession because his investment firm told him he needed a Judgment of Possession before they would turn over his deceased wife's investment account to him.

After we talked on the phone for a few minutes, we determined it would be best if he collected all of his wife's important papers and then he would bring them in for me to review. He mentioned he had a trust prepared in another state years earlier before moving to Louisiana.

At any rate, he came in with all of his papers including his revocable living trust he and his wife established in Missouri, along with a copy of her Last Will. We quickly determined that none of his assets were titled in the trust's name, and we determined that he could not find her original Last Will and Testament. He had a copy, but it was not a copy of her signed document. Her signature was not on the copy.

First thing I said was, "I realize you set up this trust to avoid probate and make it easier upon a death, but your trust does not accomplish this because none of your assets are titled in your trust, so we have to go through probate to get the assets out of her name."

Second, we realized that we would have to treat this scenario as if she had no Last Will, and use the Louisiana intestate laws to move the assets out of her name. I showed him our sample Louisiana Succession, and I explained how he would continue owning his half of their assets, and how he would inherit the usufruct, until his death or remarriage, of her half of the assets, and their children were inheriting the naked ownership of her half of the community property.

Next week he will be signing all of the succession documents and all of his new estate planning documents so that his wife's estate can be settled, and it will be easier for his kids to manage his estate if he becomes incapacitated, and it will be easy for them to settle his estate when he is gone.

Take a peek every now and then and make sure you have your original estate planning documents, and also make sure that if you establish a revocable living trust to avoid a probate or a Louisiana Succession, you have "funded" your trust and transferred your "probate assets" to your trust during your lifetime.

Paul Rabalais

Final Steps in a Louisiana Succession

We are wrapping up several successions this week. Some of them have lasted several weeks; some several months; and there is one that has been going on for years. Every succession is different because every succession has different types of assets that must be transferred, different debts, and different personalities and relationships among the parties involved.

How we finalize a Louisiana Succession depends on whether the Succession was completed "with an administration" or "without an administration." Let's take a look at the differences.

Hypothetical: Dad died with a house, stock, a vehicle, and bank checking and savings accounts.

• Example 1: Dad left it all to Mom. Since Mom doesn't want to sell any of Dad's estate assets, she merely wants to have it put into her name. She already has access to the bank accounts because they were joint accounts. We would complete this succession without administration and petition the proper court to order that all of Dad's assets be re-titled into Mom's name.
• Example 2: Dad left it all to his three children. In this situation, we must have an administration. One of the kids will get appointed as the Administrator (if Dad had no Will) or the executor will be confirmed (if Dad had a Will naming an executor). The executor will open estate accounts, transfer Dad's bank accounts into the estate accounts, sell the stock, vehicle, and home, and ultimately distribute the cash and estate assets equally to the three children.

In either situation, the final step involves petitioning the court for a court order (also known in legal circles as the "Judgment of Possession") which orders parties to transfer assets to the heirs. This Order is filed in the real estate records of the parish where real estate is located, and it is also sent to investment firms, stock transfer agents, and banks when those parties need to be instructed to transfer assets into the names of the heirs pursuant to this order.

Successions can be difficult to understand because each one is so different and there are several different succession procedures (Will v. No Will; administration v. no administration; independent administration v. regular administration.

If you are in charge of completing a Louisiana Succession, give us a call and we'll talk you through all of the steps to complete it, and then we'll get it done in lickety-split.

Paul Rabalais

Splitting Assets of Deceased into Two Trusts

Started working on a Louisiana Succession this past Friday. The executor of the estate was in town - he lived out of state. He told me he thought he would have to stay in town until the entire estate was settled but he wanted to go home as quickly as possible.

The Will left everything that the deceased owned into two trusts: one trust for one child's family, and one trust for the other child's family.

Like I always do, once we reviewed the special terms of the Will and uncovered all of the assets titled in the name of the deceased, I went through step-by-step what we would do to take them from where they were at that moment in our conference room to the entire estate being settled. I told him, generally, that we do the following:

1. While they were in the office, I told them, our Director of Client Services, would gather the information and prepare the necessary Louisiana Succession pleadings to have the son confirmed as the Louisiana Independent Executor. I told him once he signed these pleadings in our office that day he was free to leave Louisiana and go back to his home state. He was pleased.
2. I told them that once the son was confirmed the Independent Executor, the court would issue several certified copies of "Letters of Independent Executorship" (Letters).
3. Once we have these Letters, we can help him open an estate bank account, close all of the deceased's bank accounts, and deposit all estate funds into the estate account.
4. In the deceased's Will, the deceased made some specific bequests of money. I told him he will write out checks to these people from the estate account and we would handle all the paperwork to get these checks to the heirs and have them sign the necessary Receipts of Legacy.
5. I then told the family that we would petition the court so that a judge would sign a court order, also called a Judgment of Possession, so that the judge will order that all remaining assets of the deceased be divided between the two trusts.

I told the executor-to-be that he was "free to leave the state" and go home. He was really excited that all of this could be handled from our office. He signed all of the pleadings which allow him to be confirmed as the executor which we will file at the courthouse tomorrow. This is a great family and it's both a pleasure and an honor to assist this family with the transfer of the family's estate from one generation to the next. 

Is Louisiana Succession Really Necessary When Deceased Left a Clear Last Will?

 

We work with some great families getting estates settled after the death of a loved one. Occasionally we are asked, "Is a Succession really necessary if someone dies with a Will and they are clear about who the heirs are?" Sometimes they ask, "Can't we just take my Dad's Will and a death certificate to the bank and ask the bank to give us Dad's money?"

Well it does not work like that. A Succession is necessary even though the deceased left a Will when there are assets titled in the name of the deceased. The Will is filed at the courthouse along with a number of customized Succession documents including the detailed list of assets and debts, petitions, and a Judgment.

If the judge's office determines that all of the procedural rules have been followed, the judge will sign a Judgment of Possession which orders banks and others to transfer assets from the name of the deceased to the heirs named in the Will and in the Judgment of Possession.

We work with phenomenal families from all 64 Louisiana parishes in order to get estates settled. The fact that we embrace technology in our office allows us to get this done in lickety split, keeping suriviving heirs from suffering through delays and other stresses.

Fixing an Incorrect Judgment of Possession

I recently met with a client who was in a bind because the Judgment of Possession or "JOP" issued after her husband's death inaccurately reflected the terms of his will. Apparently the attorney responsible for overseeing her husband's succession forgot to mention include her 1/2 interest in the family home and the entirety of the home was left to her daughter subject to a lifetime usufruct for the wife.

This was incorrect because in Louisiana the home was considered community property. Upon the death of her husband, the wife legally owns 1/2 of all the community property in the husband's estate free and clear of the claims of the children. The inaccuracy of this JOP led to flaws in the retitling of the home. Only the daughter is listed on the new title, this makes the wife unable to sell her interest in the home and creates a real hindrance for Estate tax gifting and her other estate planning needs.

However all is not lost. We can file with the court to amend this JOP to make sure the wife's interest in the home is provided for. After the amendment is granted by the court, then we will have the home retitled to reflect the new and accurate Judgment of Possesion. At this point the wife will be able to exercise all of her rights as co-owner of the property.

If you have experienced problems with the succession for one of your loved ones and would like to discuss your options give me a call in the New Orleans/Metairie Area at (504) 247-1980 or send an email to chris@rabalaislaw.com. On the Northshore, contact Brent Durham at (985) 246-3020 or brent@rabalaislaw.com. In Baton Rouge, contact Paul Rabalais at 225-329-2450 or paul@rabalaislaw.com.

Chris Kane, Attorney

Director, New Orleans Office

       

8 Things to Know About Louisiana Successions

People often call our office after a friend or family member has passed away wanting to know more about successions in Louisiana. Below is a general explanation of our unique, and sometimes complicated, law of successions.

1) When is a succession “opened”?

• The succession opens at the moment of death, and successors have immediate ownership of the property they inherit. This is regardless of whether the succession is actually filed with the Court, although a court order will usually be required for banks and other institutions to transfer funds, as well as for transfer of land ownership.
• While the succession is technically opened automatically, we DO NOT recommend that you forego filing the succession with the proper Court. Letting a succession go for several generations is a common problem in Louisiana that results in an extremely difficult task for the family member or friend who eventually has to deal with everything years down the road when paperwork has been lost and memories have faded.

2) What happens to a person’s community property if they die without a Last Will?

• If a person leaves behind a spouse and children, ½ of the community property will belong to the spouse in full ownership. The surviving spouse will have the usufruct of the other ½ of the community, and the children will have naked ownership. The spouse’s usufruct lasts until the spouse dies or remarries, whichever occurs first. Upon the spouse’s death or remarriage, full ownership of the ½ of the community that was subject to the usufruct automatically vests in the children.
• If a person dies leaving a spouse, but no children, all of the decedent’s property will pass in full ownership to the spouse.

3) What happens to a person’s separate property if they die without a Last Will?

• If they leave behind descendants, they inherit all of the property to the exclusion of everyone else, including a spouse.
  • In all areas of successions law, “descendants” include children that have been given up for adoption. They are still entitled to inherit from their birth parents.
• If they leave no descendants, but leave behind parents and/or siblings or children of predeceased siblings, the parents inherit the lifetime usufruct of the property and the siblings (or children of predeceased siblings) inherit the naked ownership of the property. (This is true unless the property is something the parent donated to the child. In this case, the property reverts to the parent in full ownership.)
  • If there are parents, but no siblings, the parents inherit in full ownership.
  • If there are siblings, but no parents, the siblings inherit in full ownership.
• If they leave no descendants, parents, siblings, or children of predeceased siblings, the property goes to the surviving spouse in full ownership.
• If they leave no descendants, parents, siblings, children of predeceased siblings, or spouse, the property goes to any surviving ascendants, such as grandparents or great-grandparents.
• If they leave no descendants, parents, siblings, children of predeceased siblings, spouse, or other ascendants, the property goes to any other collateral relations, such as great-nieces and nephews, great-aunts and uncles, etc.)
• If the decedent leaves absolutely no relations, the property will go to the state.

4) What happens to a person’s property when they die with a Last Will?

• After the Will is probated and the Judgment of Possession is signed, the property goes to whoever is named in the Will.
• What can’t a person give away in their Will?
  • A married person cannot give away more than ½ of their community property, because ½ of community is owned by the surviving spouse when the other spouse dies.
  • A married person can leave his or her ½ of the community property to anyone they wish, even to the exclusion of their spouse, but they must take into account forced heirship laws.
    • The part that the testator can will away is called the “disposable portion.” The part that the testator cannot will away is called the “legitime.” The legitime will be equal to either ¼ (if there is only one forced heir) or ½ (if there is more than one forced heir) of the testator’s ½ interest in community property.
    • Where forced heirship prevents alienation of part of the testator’s ½ of the community, the testator may leave the usufruct of their ½ to their spouse with the naked ownership of the legitime to the forced heir(s).
      • At the testator’s discretion, this usufruct can last until the surviving spouse’s death, remarriage, cohabitation with another person in the manner of married persons, etc.
      • The forced heirs’ naked ownership may be left in trust with the surviving spouse named as the trustee. This will allow the spouse to deal with the property without having to get permission from the forced heirs (such as selling the home or cars).  

5) What if a person doesn’t want the property they are to inherit?

• The successor may renounce the inheritance, but such renunciation must be express & in writing.
• The property will then go to whoever would have inherited if the renouncer had predeceased the decedent.
  • In the case of a succession where the decedent left a Will, the testator is allowed to say what he wants to happen to the property if it’s renounced or disclaimed by an heir.
  • The person who is disclaiming the property CANNOT say where they want the property to go. It is up to the testator, or, if they made no provision in a Will, to the law.

6) Who handles the succession when a person dies?

• In the case of a death without a Last Will, someone, usually a relative, will petition the court to be appointed as an administrator. This person may act independently if all of the universal and general successors sign agreements. This allows the administrator to act without court approval for everything. If the successors do not agree to independence, the administrator will have to petition the court to do almost everything. The most common thing for which a non-independent administrator needs to ask permission is to sell immovable property.
• In the case of a death where the decedent left a Last Will, the decedent will almost always have appointed someone to serve as executor. This person will usually petition the court to be confirmed as executor. On occasion, the person named does not wish to or is unable to serve as executor. In this case, a person named as an alternate executor in the Will may petition the court, or, if there is no named alternate, any other interested person may petition the court to be named as “dative executor.”
  • The executor may act independently if either the testator stated that was their wish in the Will or if all of the universal and general successors sign agreements.
• The executor or administrator is entitled to payment for their services in the amount of 2.5% of the net estate, unless the decedent provided otherwise in their Will. This fee can be waived, and often is in the case of family members. If the fee is accepted, it must be reported as income on the executor’s/administrator’s tax return.

7) What are some duties of the administrator/executor?

• After being appointed by a court, the succession representative is issued Letters of Administration or Letters Testamentary. These Letters are proof of the succession representative’s authority to deal with matters on behalf of the estate. One of the main things that must be done is opening an estate account.
  • This account may be opened at any bank with a branch in Louisiana. To open an estate account, the representative will need to present the bank with:
    • A copy of the death certificate,
    • A Tax Identification Number, and
    • A certified copy of the Letters
    • Once the estate account is opened, the representative will take a copy of the Letters to the banks and financial institutions at which the decedent had accounts. They will ask that the accounts be closed, and that checks for the balance be issued to the “Estate of John Doe.” These checks will then be deposited into the estate account.
    • The representative will use the estate account assets to pay estate debts, which usually include:          
      • Legal fees,
      • Executor’s/Administrator’s fees,
      • Administration expenses,
      • Funeral and burial expenses,
      • Unpaid medical expenses,
      • 50% of community debts due at death,
        • This includes utility bills, credit card debt, car loans, mortgages, etc.
        • 100% of separate debts due at death
      • The representative will need to maintain a list of these debts, along with the proper documentation.
      • The representative will also need to make a list of the decedent’s assets and the value of those assets on the day the decedent died.
        • The most common assets that need to be listed include:
          • Immovable property (real estate),
          • Bank accounts,
          • Accounts with other financial institutions, such as brokerage accounts,
          • Stocks,
          • Bonds,
          • Cars, boats, trailers, and other titled vehicles,
          • Promissory notes owed to decedent,
          • Business interests (LLCs, corporations, etc.)
          • Assets that do not need to be listed because they are distributed outside of the succession include:
            • Beneficiary designated assets, such as IRAs, 401Ks, and insurance policies.
              • This is only if a beneficiary is actually designated. If there is no designation, or if the beneficiary has died or disclaimed the assets, the assets will be included in the succession, because they will be payable to the estate.
              • Savings bonds in the names of Decedent OR another person.
                • Ownership of these jointly owned savings bonds is transferred automatically to the survivor.
                • If only the decedent is named or if both named persons are dead, the bonds must be listed in the succession.

8) Once all of the paperwork is completed, and the Judge has signed the Judgment of Possession, our office will record the Judgment in the parish or parishes in which any real estate is located. The succession representative will handle distributions to the heirs, transfers of vehicles, stocks, bonds, etc.

If you are interested in retaining our law firm to provide you with our estate administration legal services, contact us for a no-cost initial discussion at 225-329-2450, or email us at laura@rabalaislaw.com.

~ Catherine Martinez

 

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Attorney Appointed For Heir That Can't Be Located

Someone called the office earlier in the week inquiring about our handling a succession. They said one of their heirs cannot be located. The heir was a long lost child of the deceased. The deceased died without a Last Will so this individual was an heir.

Here's what happens when no one knows where an heir is:

• The court must appoint an attorney to represent the absent heir;
• The appointed attorney must make all efforts to identify the heir and inform him that he inherited, and the attorney must represent the heir in all court proceedings;

Then, if the heir still cannot be located, the court may order that the executor or administrator deposit in a bank or in the registry of the court the funds credited to the missing heir.

Since all of the heirs (or their attorney) must join in the petition for possession in a Louisiana succession, you cannot ignore the fact that an heir is missing. Assets cannot be transferred to any of the heirs until this procedure for a missing heir is followed.

Let us know if you are involved in a Louisiana succession where there is a missing heir. So long as the succession is not contested, we'll be happy to talk to you about how we can expedite the process.

Paul Rabalais

What To Do After the First Spouse Dies to Avoid Estate Tax After the Second Death

I spoke with a daughter today. Her father died recently and she wanted to know how to handle his Louisiana succession (what she needs to do, how much, the usual).

I asked her about her parents' assets. When we added it all up, it was a little over $1 million. I asked her what her father's Will said and the will left everything to his surviving wife. This is commonly referred to as an, "I Love You" Will, because it simply leaves everything to the surviving spouse.

I knew that could be a problem. I told her that if everything gets lumped into Mom's estate, then there is the potential for some hefty federal estate tax when Mom later dies since she will likely own more than $1,000,000, and since the tax law provides that starting January 1, 2011, everything over $1 million will be subject to a federal estate tax which starts at 37% and creeps up to 55% quickly.

I suggested that before the family do anything, that Mom should at least consider disclaiming some of Dad's estate. Whatever she disclaims (or "renounces" or "refuses") will go straight to the children and will not be lumped into Mom's estate for estate tax purposes when she dies.

Even though the new law does not take effect until January 1, 2011, you need to start planning for it. Decisions that are made today can have adverse tax effects in the future if those decisions are not made with future tax laws in mind.

If you are an executor of a Louisiana succession, or if you are the "decisionmaker" of an estate, and would like to speak to us about how we can quickly and efficiently resolve and complete an uncontested Louisiana succession - and if you'd like to avoid or minimize estate tax along the way - give our office a call at 225-329-2450 - or send me an email at paul@rabalaislaw.com and in the subject line write - NEED AMAZING SUCCESSION LAWYER.

Paul Rabalais

Working With the Courts on Successions Can Be Frustrating

We strive at our office to be prompt, accurate and efficient when we are providing our Louisiana Succession legal services. I have to admit that our client services attorney, Catherine Martinez, does a whale of a job creating and processing all of our succession pleadings and other probate paperwork.

Today I received word that the judge's office rejected two of our Louisiana Succession Petitions for Possession. Just so you'll know, a petition or other court pleading can be rejected if it is not procedurally correct or for another valid reason.

In both matters, the Petition for Possession and corresponding Judgment of Possession was rejected because, as the clerk for the duty judge put it, we did not file the required, "Affidavits of Death, Domicile and Heirship."

So they rejected our documents and sent them back to us to start over. What the law clerk failed to realize was that we had filed the required Affidavits of Death, Domicile and Heirship when we filed the Petition to Probate the Will. Anybody who knows anything about Louisiana Successions would have known to look to see if these Affidavits were previously filed.

The solution has to be to either better train the clerk of court employees who are in charge of handling and processing succession pleadings, or to create a probate court which would exclusively handle succession matters. Since there would be cost and politics involved in establishing a probate court, I don't see that happening anytime soon.

While a Louisiana Succession can often times be a streamlined processing of paperwork at the proper courthouse, any number of things can and often do occur to slow down or stop the process in its tracks. The only way to completely avoid a Louisiana Succession is to make certain there are no assets titled in your name at your death which would require a Louisiana Succession - often done by creating and funding a revocable living trust.

Paul