I was working with a couple from Lake Charles, Louisiana, on their estate planning legal program. For estate tax avoidance purposes, they wanted to set up a trust for their 30 year old child, who lives in Baton Rouge. Assets in this trust will not be part of the couple's estate when they die.
Their 30 year old child was not responsible with money, but he was getting more mature by the years. But the parents did not just want to dump a big sum of money in their child's lap - for him to blow. They decided that the trust should stay in effect until their son is 55 years old, at which time he can have the trust assets put into his own name. When we were discussing other terms of this irrevocable trust, they asked me a question.: "Paul, what if our son happens to die unexpectedly while this trust is in existence for him?"
I told them, "It depends. Does your son have children?" Why did I ask them if their son had children? Because the Louisiana Trust Code provides guidance on your right to re-direct the trust assets of the trust if the beneficiary dies prior to the termination of the trust.
The couple told me that their son did not presently have children, but that he had a serious girlfriend and would likely get married in the next couple of children.
So, I told them, "If your son dies while this Louisiana Trust is in existence for him, and he does not have children (or grandchildren), then you can determine where the trust assets go if he dies before he turns 55 years old. The couple indicated to me that if their son dies with no children, the couple would then want the trust to be for the benefit of four nieces and nephews they had.
But then I said, "If your son dies while this trust is in existence for him, and he DOES have descendants, then his interest in the trust will be in his estate and will be for his heirs. Although you do have the authority to shift the trust principal to one or more of his descendants, under these circumstances where he dies with descendants.
I verified all of this by double-checking the relevant provisions of the Louisiana Trust Code, in this case it was Title 9, Section 1973, which was revised by the Louisiana legislature in 2016.
If all of this sounds confusing, don't be alarmed. It is confusing. So if you want to set up a Louisiana estate planning legal program so that what you own goes to your family, the right way, the first time, and protected from government interference, then you may want to call our estate planning law firm at 866-491-3884 and ask to set up a time to start a conversation about how to leave your estate to your family.