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!
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!
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!
I had a question come up yesterday. Are joint bank accounts and investment accounts (i.e. Mr. and Mrs. Smith) frozen when they first spouse dies? Typically the bank accounts are not. If you have a "Mr. or Mrs." checking or savings account and one spouse passes away the other one can still access that account.
Typically the investment accounts are frozen. The investment firms’ rules are more rigid on what happens if one of the account owners dies. Those do get frozen and the surviving spouse cannot access those accounts without going through the Louisiana succession or probate to order those investment firms to release those investments to either the surviving spouse or the heirs, whatever the case may be.
So realize there is a difference. Now bank accounts, after both spouses pass away, if there's no other names on the account, those accounts get frozen then. So you can do some things to avoid that as well and make things simple for your family. If you have questions about that just post a comment to this blog post. We can comment and write back and forth about that. Have a good day.
On Monday I met with a gentleman. He was an only child and both of his parents passed away. His mother passed away last year and his father passed away last month. They were like most Louisiana families. They owned a home, owned a few investments, they had some bank accounts. All that was frozen. So in order for the son to get access or ownership of those assets we actually have to do two successions at the same time. Their house for example, is in both of his parents names and we have to do both successions to get both parents assets transferred to that one son. They both had wills and the wills left everything to the son and named him as the executor. So actually three days later he's coming back in today. He was so organized and efficient, he had done his homework, he saw on the internet some of those things that we have done, and he came in very well prepared. So now he's coming back in today (Thursday) to sign the necessary succession pleadings so we can file those at the local courthouse and get those assets transferred to him. So the moral of the story is sometimes we have to do two successions at the same time when both parents pass away and the family didn't do the succession after the death of the first spouse. If you have any questions, comments, experiences about that feel free to post a comment to this blog post. You'll be helping yourself and others who may be in similar situations as yours. Have a great day!
Let's talk about what happens when a married person dies, they have no kids, and they have no will. What happens to their stuff? In this case we are working with a husband who died and his surviving wife. The husband had no children and he had no will. Here's what happens, it depends on whether he had community property or separate property. If he had community property, he and his wife purchased a home together while they were married, he and his wife had bank accounts or investments together that they acquired during their marriage, all of that is community property. His one half of the community property goes to his wife. That's what happens to the community property. What happens to his separate property? He had actually brought some stock into the marriage, so he had it before he got married. That's his separate property, his wife doesn't get it. His separate property, since he has no surviving parents, goes to his siblings, not his wife. His siblings will get all of that stock and since some of his siblings had predeceased, those sibling's shares will go to those sibling's children. A little bit complicated but be aware that if a married person who has no kids and no will, where their stuff goes depends on whether it's community property or separate property. The surviving spouse gets all the community property, but typically does not get any of the separate property. You can change all of that by getting wills, trusts, estate legal documents in place, but in absence of that, it is going to happen just like I said so beware of that, have a great day!
There's a lot of reasons to get a succession done quickly after somebody dies. We ran into a scenario yesterday where we were working on a succession, a woman passed away and she lived in Prairieville, Louisiana. We were completing her succession and we did all the paper work very fast. Then there was a delay from the time the court issued this judgment until the time that the husband submitted all these court orders to the financial institution, who held an account in the wife's name. That account was frozen. We got the necessary court paperwork to the financial institution. That court order directed and ordered that financial institution to turn over all the money to the husband, but he got it to them too late. Once the legal department of this legal institution got the court order, they said we're not going to honor it. We want a court order that has been certified in the last sixty days. We have to go back to the court, get more court orders, and go back to the financial institution. So bottom line there is there's a number of a different reasons to really get things done quickly, in a succession, to really streamline the transfer of assets from the name of the person who died to the heir's names. Really that's our specialty, getting things done quickly using technology, using the computers. Getting things done so there are minimal delays involved. If you'd like some help developing a plan to getting assets transferred after someone dies, you can contact our office or toll free number: 866-491-3884. Have a good one!
Over the 20+ years I've been providing estate settlement legal services to families in Louisiana, I've seen surviving spouses, surviving children, and other heirs make a host of mistakes when it comes to settling the estate of their loved one who passed away. While I could easily make a list of 20-30 common mistakes that are made, the following are five that we see quite often:
Working with the wrong lawyer or law firm. Every week we get calls or emails from people who are frustrated because they feel that their loved one's succession is stuck in mud, because the attorney can't/won't/doesn't know how to/refuses to do the work to complete the succession. Sometimes it's because the lawyer won't return phone calls. Sometimes it's because the lawyer doesn't understand Louisiana Succession law. Sometimes it's because the lawyer is too busy handling other things. Sometimes it's because you don't get along with the lawyer. Sometimes its due to miscommunication or no communication. It could be anything. You need to work with a lawyer of law firm who can work with you to develop a written plan to take you from start to finish, is available to handle things that come up during the estate settlement (and things WILL come up), and keeps you posted of progress along the way. Work with someone who provides their fixed fee in writing so you won't be unpleasantly surprised later regarding legal costs. Work with a lawyer or law firm that handles estate matters exclusively so they are not sidetracked by other more pressing legal deadlines that they have in their other matters.
Ignoring the estate settlement. No one is going to come knocking on your door after your loved one dies reminding you that it's your job to complete the estate settlement of your loved one. It's your job to take action, contact an estate settlement lawyer, and get the job done. Otherwise, there could be some hefty estate tax penalties and interest due if an estate tax return was required to be filed. Plus, you can't sell the house or any other estate assets until the Succession is complete. And, the longer you wait to do the Succession, the harder it is to gather all of the required date of death assets and values that must be disclosed on the Detailed Descriptive List of Assets and Liabilities. So, Git-R-Done.
Failure to Maintain Open Communication With the Heirs. This one causes family relationships to break. There is little that causes more stress than being involved in an estate settlement but not being able to get basic information about the workings of the matter. This causes stress, resentment, suspicions of impropriety, lack of trust, and worse, a complete and permanent breakdown of the relationships of what were formerly loving family members. Work with a law firm that has the legal, technical, and client service skills that will keep all of the heirs current on the progress of the estate.
Ignoring Current and Future Tax Consequences. If the Successsion / Probate / Estate Settlement (call it what you want) is done wrong, the heirs will pay more tax. Executors, trustees, and heirs have certain decisions they must make when the estate is being settled that will affect (often adversely) the amount of tax that the estate or the heirs must pay. Most estate settlements have tax consequences in the tax areas of: estate tax, capital gains tax, income tax, generation-skipping transfer tax, and property tax. One example is the "Executor's Fee." While the executor of a Louisiana is entitled to an executor's fee of 2.5% of the estate assets, an analyses must be made about whether to accept the fee. The fee is a deduction from the estate for federal estate tax purposes, but it is included in the taxable income of the executor. Work with a lawyer or law firm that understands the various tax consequences of settling an estate.
Failure to properly document "Usufruct" assets. When a married person dies, he often leave his surviving spouse the usufruct of assets in his estate. If his wife inherits the usufruct, she is going to be accountable to the naked owners when the usufruct later ends. Proper documentation of usufruct assets at the time of death AND proper documentation of the subsequent sale of those usufruct assets is a MUST to avoid complications at the end of the usufruct (which typically is when the surviving spouse dies) and the heirs of both spouses squabble over those assets. Work with a lawyer or law firm that understands the usufructuary accounting and can provide you with the necessary guidance so that the estate settlement goes smooth not only when the first spouse dies but also when the surviving spouse dies.
Mistakes are often made in estate settlement legal proceedings because most executors and heirs don't go through this very often, so they don't comprehend the consequences of a mistake. If you are the executor of an estate, or your loved one died recently with no Will, give us a call at 866-491-3884, and we'll help you develop a plan to get the estate settlement done quickly, easily, and without stress. We provide legal services for Successions in all 64 Louisiana Parishes. Call today!
The following story is a trap where unknowing families often wind up paying hundreds of thousands of unnecessary estate tax dollars. I was working with a family where Dad died a few weeks ago and the family was doing a lot of things on their own. Dad had some IRA's that went to the surviving wife. They were able to do all of that paperwork with the financial institution because she was the designated beneficiary. They also had an account that had about a million dollars in it and was titled, "Dad and Mom, Joint Tenants with Rights of Survivorship." Now, that's a form of title that Louisiana simply doesn't recognize. However, they had that account and as far as that investment company knew, if it was titled that way and Dad died, they were going to put the account in Mom's name. That's exactly what they did. Mom has all of the money and they felt like we didn't even need to address that account. Dad's last will and testament said that Dad gave Mom the lifetime usufruct of his estate. So I told them how really important it was to document that account and put it in as a succession asset and itemize everything in that account because if it was left how it was then when Mom dies in the future it was all going to be in Mom's estate. This could be a lot of unnecessary estate tax creating a large estate for Mom. However, if we document everything correctly now by documenting what Dad's estate was that Mom had the usufruct of Dad's half of the community property, then those things that Mom had the usufruct of won't be counted as part of her estate for estate tax purposes when she dies. A lot of financial institutions just let Mom put everything in her name, but it's really important for estate tax avoidance purposes to document what's in the estate of the first spouse to die so that it gets excluded from the estate of the surviving spouse. So make sure you take care of all those things.
I want to talk to you today about a common scenario that happens in Louisiana when a parent dies and their home goes to the children but the children decide they only want one of their siblings to own the home. I'm working on two of these successions right now.
Here's the way you have to do it. Again the scenario: parent dies and the home goes to the children. The children agreed that one sibling will own the home. You have to do the parents succession because the first thing that needs to get done is to transfer the home from the parents name to the children's name. The second step is the children can either donate or sell their share of the home to the child that will own the home entirely. The children will agree to donate it to their sibling or sometime the siblings will have an agreement to buy their shares from each other. However, you do have to complete the parent’s succession first to get the property out of the parent’s names into the children’s names.
This is just another succession story. Be aware that anytime someone dies with something titled in their name, they have to do a succession.
