I get calls and emails almost every day from people in Louisiana who are not sure how to settle the estate of a loved one. Some people make assumptions about the process that are a little crazy, while others realize that the government makes the rules and we have to follow them. So, in order to minimize confusion about how a probate works in Louisiana, I thought I'd lay it out in a few simple steps.
First, let's assume that the deceased was single, has a last will and testament leaving his estate to his three adult children, and he named one of the children as the executor. He owned a home, stock, rental property, bank accounts, and vehicles. Here's one path for completing the probate:
- Get the Executor Confirmed. The heirs quickly discovered the Dad's stock account and his bank accounts were frozen upon his death. So, Step One involves getting the child confirmed as the Independent Executor. Two people who know Dad must sign an Affidavit of Death, Domicile, and Heirship, and pleadings will be filed at the courthouse, along with the original Last Will. If all of the paperwork follows the procedural rules, then a judge will sign an Order and the clerk of court will issue something called "Letters of Independent Executorship." Some people mistakenly believe they can get these "Letters" from an attorney's office, but it's not quite that simple - all of the court filings and court orders are required.
- Estate Account. The newly confirmed Independent Executor will go to the financial institutions where accounts are frozen and supply certified copies of these "Letters". The financial institutions will open an Estate Account and transfer the funds or securities from the Dad's frozen account into the new Estate Account.
- Sale of Estate Assets. Once the child is confirmed as the Independent Executor, the child can sell the home and the vehicles. The proceeds of the sales will be placed in an estate account. The kids get together and agree to keep the rental property, so this does not get sold as a part of the estate settlement process.
- Detailed Descriptive List of Assets and Liabilities. The attorney's office must prepare and file a detailed listing of all estate assets, debts, and other expenses. This filing is required in all Successions and is made part of the public Succession record at the local courthouse. Some people don't like the idea that the financial picture is made public.
- Petition for Possession. All of the three children must sign off on all of the court pleadings, including the final Petition for Possession, where all of the heirs are asking the assigned judge to sign a Judgment of Possession, which orders third parties to transfer estate assets to the appropriate heirs. It may take a few weeks or a few months to obtain this judgment once filed - sometimes the wheels of justice move a little slowly.
- Transfer of Rental Property. A certified copy of this Judgment of Possession gets recorded in the Conveyance Records of the parish where the rental property is located. This transfers title of the property from Dad's estate to the three children. The three children each then own an undivided one-third interest in the property.
- Disbursements. After the independent executor pays the final estate expenses and makes sure all taxes have been paid, the independent executor will disburse remaining funds or securities to the three children equally. Now it's often time for the heirs to go shopping. :)
Since all probates are not created equally, here are a few more pointers:
- Excluded assets. Assets like IRAs, life insurance, and annuities that have a designated beneficiary do not get included in the court proceeding. However, if the proceeds go to the "Estate" they will be part of the Succession process.
- Succession or Probate. Louisiana calls this proceeding a "Succession." Other states call it a "Probate." This confuses people.
- If one participant does not cooperate, then good luck. If there are eight heirs and only seven are willing to sign off on all of the legal filings, then the whole thing shuts down until all are cooperative or extra court hearings take place where all are hauled into court.
- An executor has zero power until confirmed as executor by the court. Producing the Will is not enough.
- It's best to work with someone who truly understands these court rules, as well as the tax consequences to the estate and to the heirs - not just estate tax, but income tax and capital gains tax. Lots of mistakes get made unknowingly by heirs who were not advised as to the tax consequences of different actions by the estate or the heirs.
- Sometimes, a Succession can be complete without an executor being confirmed - but you still have to do all of the other stuff so it takes a while.
While we don't handle estate disputes, our expertise is in working with ALL of the surviving family members to design an estate settlement plan and then implement it as expeditiously as the court rules and financial institutions permit - so that red tape is minimized and family relationships prosper. Call us at 866-491-3884 if you want to start a conversation about settling an estate.