We've been working on a Louisiana Succession for the last several weeks. Dad passed away having left a last will and testament naming Son as executor, and leaving all of the assets to his four children.
The children were confused about the steps that needed to be taken because they had gone to several of Dad's banks. Some banks would not give the children any information. Some banks told the children they needed "a letter from the attorney." And some banks started processing the accounts instantly so they could be transferred to the children. There was also a home and some stock involved. They came to me to sort it all out. After about two hours of talking, digging, and a few phone calls to a few banks, I revealed the following steps that needed to be completed to get Dad's estate (or probate or Succession - whatever you want to call it) settled.
Here are the steps we are going through.
- Son Confirmed as Independent Executor. We prepared all of the court petitions and filings to enable a judge to sign the appropriate court orders confirming that the Son was the executor. Since the Will authorized the Son to act as an "independent executor," the court will issue court documents called "Letters of Independent Executorship." Even though the probate is still necessary, being confirmed as an "independent" executor is better than being an executor, because an independent executor can take more actions (such as paying debts or selling a vehicle) without having to ask a judge for permission every time the executor needs to do something.
- Open Estate Account. Once the initial court orders are issued, Son can go to the financial institution of his choosing and open an estate account. Then, Son can go to the various banks and other financial institutions and collect the funds from the frozen accounts, and deposit those funds directly into the estate account.
- Detailed Descriptive List. The family will get us the necessary information so that we can prepare the formal accountings including the Detailed Descriptive List of Assets and Liabilities. A judge won't allow assets to be transferred to the heirs until all of the Assets and Debts and Expenses are itemized the right way in this Detailed Descriptive List.
- Judgment of Possession. One of the last things that will happen in a Louisiana Succession is that the judge will sign the Judgment of Possession that we prepare and that all of the heirs sign off on. This judgment orders the executor and banks and other third parties to transfer remaining assets to the four children. The home will be listed as an asset of the Succession which must be transferred to the four children. This judgment will be recorded in the real estate records of the parish where the property is located - formally retitling the property into the names of the four children - so they can sell it when they are ready.
- IRAs. An IRA is one of those accounts where a beneficiary can be designated. Since Dad named the four children as the designated beneficiaries, the four children can work with the financial institution to have Dad's IRA transferred to the four Inherited IRAs. The children can elect to take taxable distributions over their lifetime of they wish, deferring the income tax while the investments continue to grow.
- Tax. The family was relieved that no federal estate tax was due since Dad's estate was well under the $5.45 million estate tax exemption. The only tax consequence is that the children will include in their taxable income the distributions that they get from what previously was Dad's IRA.
Completing a Louisiana Succession can be tricky. Getting the wrong advice or working with the wrong people can add months or years to an already difficult process. Check us out if you have a loved one who has passed away, and you and all of the other heirs want to streamline the estate settlement process.