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

Easy To Sell Home - Even if 11 Heirs Exist all over the Country

I met and spoke to a gentleman today. He said his wife's family was stressed about getting their father's home sold. He thought it would be really difficult to sell the house since the father recently died and there were 11 children scattered all around the country.

I told him it would be easier than he thought. I told him if all 11 sign a separate agreement allowing his wife to be appointed the Independent Administrator, then she could handle EVERYTHING related to the sale of the home. The other 10 children would not have to sign off on paperwork to sell the family home.

Sure, the Independent Administrator will have to split the estate funds among the heirs, but she will be able to list, negotiate, and close the sale on her own without having to get any express permission or writings from any of the other heirs.

This is one of the most misunderstood rules relating to the sale of real estate in a Louisiana Succession. An Independent Administrator or Executor is not required to consult with any of the heirs when selling estate assets - even real estate. Sure, as a matter of common courtesy and in the interest of keeping the lines of communication open, an executor or administrator will communicate his or her actions to the heirs, but it is not required by the provisions of Louisiana Succession law.

Paul Rabalais

Louisiana Succession May Need More Than One Estate Account

Was working with a family today settling the estate of their parent. Based on the way their parent's accounts were set up, I advised them that they will need two estate accounts.

Once the child is appointed the Independent Administrator (we prepared all the documents allowing her to be appointed while she was in the office), she will open an estate bank account at a local bank and move all of the parent's funds into the new estate bank account.

The deceased also had an account at Edward Jones with investments in it. The family wants to sell the investments and divide the proceeds among the heirs. So, the Independent Administrator will open an estate account at Edward Jones, move the assets from the parent's single account into the estate account, sell the investments from the estate account, and then move the estate account cash from the estate account at Edward Jones to the estate account at the local bank for ultimate distribution to the heirs.

We've worked with several estates that have had to open multiple estate accounts, particularly if there are investments at multible brokerage firms that must be sold. Often these estate accounts are temporary but they are a means to an end of getting estate investments liquidated so distributions can be made to heirs.

If you are named as the executor of a Louisiana Succession in a last will, or if you would like to be appointed as the Administrator of a Louisiana Succession (because there is no last will), give our office a call and we'll be happy to have an opportunity to discuss serving your estate settlement needs.

Paul Rabalais

P.S. Thanks to Laura Bittel from our office. Our new client said that were it not for how nice Laura was when she called, she may not have come in. Thanks also to Catherine Martinez for getting succession pleadings prepared so quickly while our client was in our office that it saved our client an extra trip from out of town.

Forced Heir's Portion May Be Placed In Trust

Was working with a family in our office yesterday. Mom had died leaving three children, one of which is a disabled forced heir. Years ago, Mom wrote a Last Will leaving everything to her two other children (the ones who are not forced heirs. Because there is a forced heir, we have to include that forced heir in the succession. Generally speaking, since there is one forced heir and only three children, the forced heir must receive 25% of the estate, even though the Will provides that nothing is to go to this child. Note that if there had been no Last Will, this child would receive 1/3 (or 33%) of the estate.

The family is worried that the receipt of the inheritance by the forced heir will jeopardize Long Term Care Medicaid benefits that the child would otherwise be entitled to.

As part of the legal services that we will be providing in the Louisiana Succession proceeding, we will petition the court to allow the "forced portion" to be placed in trust for the benefit of the forced heir, protecting it so that it won't all have to be consumed prior to Louisiana Long Term Care Medicaid eligibility.

It's a crazy system we work in: Forced heirship laws require that incapacitated children inherit, but Louisiana Long Term Care Medicaid Law penalize those who inherit. Planning ahead here is the key.

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. 

Ameriprise Financial TOD Account Agreement Excludes Louisiana Residents

Louisiana residents by the truckload are titling their financial accounts with a Transfer on Death (TOD) designation. Why are they doing this? Two reasons:

1. They think they are setting up their account to avoid the Louisiana Succession at their death; and
2. The financial institutions permit them.

The issue of whether TOD accounts are binding in Louisiana is cloudy. So much so that some financial instituions do not permit customers to provide a TOD designation.

Ameriprise Financial, in its instructions in its Transfer on Death Account Agreement and Payable on Death Account Agreement, specifically provides that these are, "Not available to residents of Louisiana."

If you want your investment accounts to avoid the Louisiana Succession, you should create a revocable living trust and title your account in the name of your trust. If your financial institution allows you to provide a TOD or POD designation, your designee may wind up in a squabble with your heirs when you die.

Paul Rabalais

Spousal Usufruct Only Applies To Community Property

Here in Louisiana, we have a fairly  unique property system for spousal unions. Louisiana is what's known as a community property state. Community property means that you and your spouse each have a 1/2 ownership interest in most of the property acquired during your marriage.

When one spouse dies leaving children and no will, the children get naked ownership of the deceased spouse's 1/2 share of community property, but the other spouse inherits the right to use the property left to to the children. This use right is called a spousal usufruct, and this right lasts until death or remarriage under Louisiana Estate Law.

However not all property owned by married persons in Louisiana is considered community property. Property that a spouse inherits during or before the marriage, property owned by one spouse prior to marriage and any property acquired with funds that were not earned or received during the marriage are considered separate property. In a Louisiana Succession, the court will determine which of a deceased souses assets are considered community property and which assets are separate property.

With separate property, your children will inherit that property in full as long as they are 18 years of age or older. Your surviving spouse has no right to use your separate property under Louisiana Law.

A well drafted estate plan can provide your spouse with more rights than the law allows. For this reason it is a  good idea to seek out the help of a professional to protect you spouse where Louisiana law fails to do so. To discuss your estate planning options in New New Orleans, Metairie, Kenner, the Westbank, Slidell, Madeville, Covington, and other areas of Southeast Lousiana; call me at (504) 274-1980 or email chris@rabalailaw.com.

 

Chris Kane, Attorney

Director, New Orleans Office

     

 

Warning: Louisiana Successions Are Public Record

I talk a lot about avoiding Louisiana probate (or succession as we call it) with a Revocable Living Trust. Typically the primary reasons stated for avoiding succession are avoiding high costs and time delays, but there is one major reason to avoid a Louisiana succession that seems to be lost amongst the others. That reason is PRIVACY.

Louisiana Successions are court proceedings, and like all other court proceedings; they are a matter of public record. This means that the information contained in a succession proceeding is available to anyone who seeks it. With the internet age, public records are available worldwide to anyone with internet access.

This is troublesome because a required part of any Lousiana probate succession is a detailed and descriptive list of all of the assets and debts of the deceased and the approximate values of said assets at the time of death. The succession records also include the names and addresses of those inheriting from the estate of the deceased. With the ease of access to such records, it its not hard to imagine an unscrupulous salesman or creditor contacting your heirs to prey on them after your death.

This public nature of successions can be escaped by avoiding probate with a revocable living trust. To find out more about this probate avoidance procedure call me at (504) 722-3344 or send me an email to chris@rabalaislaw.com.

 

Chris Kane, Attorney

Director, New Orleans Office

     

 

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.