Avoid Succession Louisiana

Who Should (and Shouldn't) Take Steps To Avoid Probate?

There's quite a bit written and discussed about whether people should take steps to avoid probate. On extreme you have the folks who say avoid probate at all cost because probate can be a significant legal hassle and expense, while others say that a Will is sufficient because when your heirs go through probate it will not be that bad.

The following are seven reasons why people commonly set up trusts to keep their survivors from going through the court supervised judicial Succession (also called "probate") proceeding, and three reasons why it may not be necessary to set up a trust to avoid probate.

Reasons often express why people should set up a living trust to avoid probate:

(1) Avoid multiple probates in multiple states when you own property in more than one state at your death;
(2) For incapacity planning, a power of attorney is only as effective as the third party is willing to honor it. Many financial institutions and title companies won't honor a power of attorney if it is old/doesn't have provisions they like, etc. If you have a trust and name a successor trustee, it is unlikely you will run into these "We won't honor your power of attorney" issues.;
(3) Reduce or Eliminate Post Death Settlement Costs. Probate costs the estate money, often in the form of attorney cost, executor fees, and court cost. Trust administration can often be done without any estate settlement cost.
(4) Potential for Conflict. Probate requires all parties to participate and be represented by attorneys. In addition, and in general, trust settlement is faster than probate. Generally speaking, the faster the settlement can take place, the less likely conflict will arise.
(5) Some Like to Plan Ahead. Some parents, for example, want to do as much as they can to make settlement matters simpler for their spouse and children. Setting up a living trust and titling assets in the trust is one way for parents to pre-arrange their estate, so that an immediate distribution is all that remains after death.
(6) Business Ownership. Some business owners like the idea that, immediately after their death, their Successor Trustee can transact business. In probate, there is delay.
(7) Just Make Things Easier. Some people want to do all they can while they are alive and well to make matters easier for their survivors.

Now, three reasons why you should not form a trust to avoid probate:

(1) The Small Succession Affidavit Procedure Will Apply. With an estate that does not exceed $125,000, and with your satisfaction of Louisiana intestate law, your estate will not have to go through the formal and judicial court-supervised Succession proceeding. Your estate can be handled through heirs signing Affidavits.

(2) There Won't Be Probate Anyway. If you own, for example, no real estate, and you just own an IRA (that has designated beneficiaries) and a bank account (which you've arrange to avoid probate at the bank), then you have no probate assets and there is no need to establish a trust.
(3) You Don't Care. Some people say they don't care that their heirs will go through probate. Some say, "I'll be dead."

You can get more in depth analysis on this subject by listening to my podcast titled, "Estate Planning with Paul Rabalais."

This post is for informational purposes only and does not provide legal advice. Please do not act or refrain from acting based on anything you read on this site. Using this site or communicating with Rabalais Estate Planning, LLC, through this site does not form an attorney/client relationship.

Paul Rabalais
Louisiana Estate Planning Attorney
Phone: (225) 329-2450

Info to Gather When Starting "Avoid Probate" Living Trust Based Estate Plan

I'm often asked, "Paul, what information do we need to gather and bring in to get started on our estate planning?" Well, this advice is based on a "typical" (even though there is no such thing as typical because every family's situation is unique and requires customization) person or couple who wants to set up an estate legal program and prevent their family and loved ones from having to go through the court-supervised judicial probate or Succession estate administration process. This typically involves establishing a Living Trust and transferring title to some of your assets into your trust while you are alive in order to make it easy for your Successor Trustee to access and disburse those assets when you die.

In general, there are three groups of information that must be provided: (1) family information; (2) asset information; and (3) substantive legal decisions.

(1) Family Information. This is typically simple. We are going to need the names of all who will participate in your estate planning program either while you are alive or after you die. This typically involves the full names (as you would have them listed in legal documents) of yourself and spouse, children, and sometimes grandchildren or others if they are included. We typically do not need the social security numbers of all of these people. although you may have to provide these numbers to financial institutions on items like IRA and annuity beneficiaries.

(2) Asset Information. When you get started, you should have a good working knowledge of what you own. It is particularly helpful if you gather, up front, all of your real estate legal descriptions. In Louisiana, these real estate legal descriptions can be found on the "Act of Sale" from when you purchased the property, or the "Judgment of Possession" if you inherited the property. We need these up front so that we can prepare the necessary transfer documents that will be signed at the same time that you sign your trust. Documents regarding investments and brokerage accounts don't have to be provided up front (but great if you have them), because you cannot transfer those assets to your trust until after your trust is signed.

(3) Substantive Decisions. All of the "who gets what, how they get it, who will be in charge" decisions are gathered through the dialogue you'll have with your estate planning attorney. These are important decisions and you need an experienced attorney to guide you through this. But it doesn't hurt give some good thought to these things in advance.

Paul Rabalais
Louisiana Estate Planning Attorney

Nine Elements of a Louisiana "Avoid Probate" Estate Legal Program

Many seniors in Louisiana express a desire that their family and loved ones avoid the court-supervised probate process when they die. Because every family is unique and each person or couple owns different types of assets, it's important that they have a foundation for their Program. The following is a description of nine different elements of the Louisiana "Avoid Probate" Estate Legal Program.

(1) Revocable Living Trust. Their Revocable Living Trust ("RLT") is the foundation of their program. This is the customized legal instrument where you state who is in charge of your trust when become incapable or when you die, who will inherit or receive distributions from your trust after you die, and it will also state the rights and obligations of all of the parties that are involved. Your RLT really replaces the traditional "Last Will and Testament." The disposition of your trust assets are controlled by your trust instrument, not your Last Will and Testament.

(2) Pour-Over Last Will and Testament. If you happen to own any assets in your name when you die, and the title of which becomes frozen when you die because they are in your name, your Pour-Over Will is necessary. The executor of the WIll, after your death, will hire an attorney and go through the court-supervised Succession procedure to have those assets in your name transferred to your trust. Note that many people who set up an "Avoid Probate" Legal Program never need to utilize the Last Will because all assets will be titled in a way making the Succession unnecessary. "Funding" your trust (or re-titling your assets) is a critical step in the process so that nothing is left in your name when you die that would require a judicial proceeding.

(3) Durable Power of Attorney. This can also be referred to as Financial Power of Attorney, General Power of Attorney, or POA. An example of when this may be needed is when you are incapacitated and there is an IRA in your name and you are unable to transact the IRA due to your incapacity. Your POA should enable your "Agent" to act on your behalf at the financial institution where the IRA is held.

(4) Health Care Power of Attorney. Also called a Medicaid Power of Attorney or Health Care Proxy. This will enable your trusted family member or friend ("Agent") to talk to doctors and access your medical records in the event you are unable to do this yourself.

(5) Living Will Declarations. This is the legal instrument where you make your wishes known regardling life support machines. People who execute Living Wills typically want to relieve their family from the burden of making an end of life decision by putting their wishes on paper, in advance.

(6) Asset Transfers. All of your funding and re-titling documents should be organized in the Asset Transfers portion of your Estate Legal Program. This is where transfers of real estate, investments, and business interests are documented.

(7) Burial and Funeral Wishes. Part of completing your Estate Legal Program may involve informal documentation of your wishes regarding certain aspects of your passing, such as your burial and funeral wishes. 

(8) Distribution of Personal Effects. Some people provide for the distribution of their non-titled personal effects (jewelry, furniture, guns, etc.) in their formal legal documents. Others take a simpler approach and make an informal list of how they want their personal effects disbursed. Check with your attorney regarding the best way to provide for the distribution of your personal effects.

(9) Trustee Education. Since the establishing of an estate legal program may be new to you, your attorney should provide both you and your Successor Trustee(s) with education and instructions as to how to best serve as a Trustee of Co-Trustee. 

While every client is different, with different needs, this should give you a pretty good example of what the typical estate planning program consists of. Now go take care of business!

Paul Rabalais
Law Offices: All over South Louisiana
Phone: 866-491-3884