Paul Rabalais' Louisiana Succession Law Blog

Don't Sign Louisiana Succession Documents That You Will Regret Later

Here's the scenario that I've seen happen over and over in Louisiana: Dad dies - perhaps with a Last Will but more likely without. The children want to make things easy for Mom so they sign Succession pleadings in which they donate to Mom all of their interest in Dad's succession.

If they had not signed this Donation, then the children would have inherited Dad's estate subject to Mom's usufruct. The children - in donating everything to Mom - thought they were doing the right thing by allowing Mom to own everything.

So, what happens next? It happens every time. Mom remarries. When Mom later dies, everything goes to Mom's second husband - even the part that the children should have inherited from their father. The children get nothing because Mom left everything to Step-Dad. When Step-Dad later dies, Step-Dad will leave it all to Step-Dad's children.

Moral of the story: Be careful before you renounce or donate rights that you have in a Louisiana succession. While you think you are doing the right thing, you may be doing more harm than good. Once your refuse or donate your succession rights, you cannot go back and change your mind later. It's a done deal.

If you need assistance in handling a succession promptly and professionally, feel free to send me an email at paul@rabalaislaw.com.  Put in the subject line: NEED SUCCESSION HELP! I'll do my best to answer your questions and point you in the right direction. If you like what you see and hear from me, you may even want my office to provide you with our estate administration legal services. We'll give you a free quote for fixed succession costs.

Have a great day!

Naked Owner Can Force Usufructuary To Invest Safely

Typically, when property subject to usufruct is sold, the usufruct attaches to the proceeds of the sale.

So, let's say Dad dies and Mominherits the usufruct of the family home. Of course Mom wants to sell the home because she can't keep up with the big yard. Mom sells the home and as usufructuary, she gets to keep the cash. What protection to Dad's heirs - as naked owners - have?

According to Louisiana usufruct law, Dad's heirs (the naked owners) may demand, within one year of Mom's receipt of the proceeds, that the money be safely invested subject to the rights of Mom.

If Dad's naked owners make such a demand, and the parties cannot agree on how to "safely invest" the money, then the nature of the investment shall be determined by a court.

This law, however, does not apply to the sale of corporeal movables like equipment, appliances, and vehicles.

Renouncing Louisiana Usufruct Can Be Effective Post Death Estate Planning Tool

Let's say Wife dies with a Last Will providing that her husband is to inherit the lifetime usufruct of her estate. Her estate is less than (but close to) the estate tax exemption. The surviving husband is concerned that if he inherits the usufruct, all of this income from the usufruct assets will be lumped into his estate for estate tax purposes when he dies. He doesn't want to burden his children with any additional unnecessary estate tax.

If the husband feels his estate is enough to satisfy his living expenses for his lifetime, he can renounce (also known as "disclaim") his usufruct, allowing full ownership of his Wife's estate to go to the children. The children can agree to hold this money aside in case Dad needs it. Now, the income from Wife's estate will not be lumped into Husband's estate.

With the potential for an estate tax exemption of $1,000,000, this succession planning tool could save families loads of taxes.

If you are involved in a Louisiana Succession, and you want to know how a Renunciation might benefit your family, feel free to send me an email at paul@rabalaislaw.com, or give our law office a call at 225-329-2450. We'll be glad to chat with you about it. Until next time...

Paul Rabalais

Dad's Dead - Does Mom Have To Pay the Kids When the House Sells?

Dad died without a Will (intestate). Mom continues to own her half of the home, and she has usufruct of his half of the home. Since Dad died intestate, Mom's usufruct lasts until her death or remarriage - whichever occurs first.

Mom decides to sell the home because she doesn't want to maintain the yard anymore (or for whatever reason). She enters into a Purchase Agreement to sell the house for $200,000. When the house sells, do Dad's kids get to split $100,000?

No. When property subject to usufruct is sold, the usufruct attaches to the proceeds of the sale. So now Mom owns the entire $200,000, with an obligation to pay Dad's heirs $100,000 when she remarries or dies.

Which always begs the next question, "What if Mom spends it?" Well, when Mom remarries or dies, she owes Dad's naked owners $100,000. If she doesn't have anything...she doesn't have anything.

The Louisiana Succession When Minors Inherit

I started working today on a succession involving the death of a parent who had a minor child. The deceased intestate (without a Last Will) owning a few assets. Here's the steps necessary to complete this succession:

1. A minor does not have the legal capacity to inherit. First, we must get the surviving spouse confirmed as the natural tutor of the minor. This will allow the surviving spouse to handle the part that the minor inherits.

2. Have a tutor and undertutor confirmed by the court.

3. Petition the court to order the transfer the assets so the the surviving spouse inherits the usufruct (until death or remarriage) of the deceased spouse's one-half of the community property, and that the surviving parent (on behalf of the minor child) inherit the naked ownership of these assets  - subject to the surviving spouse's usufruct.

There are always extra steps involved in a Louisiana Succession when a minor inherits. Much of this can be avoided with proper will and trust planning on the front end.