Independent Executor

The Louisiana Independent Executor

In 2001, Louisiana law first authorized the independent administration of a Succession. Prior to that time, any act that an executor or administrator took in the administration of a Succession was required to be approved by a judge. If the executor wanted to pay a utility bill, it must have been approved by a judge. If an administrator wanted to sell the clunker vehicle for $500, it had to be approved by a judge in advance of the sale. If an executor wanted to sell the home of a deceased person, a burdensome amount of legal advertising and judicial approval was required to sell the home. It made the administration of a Succession very difficult, time-consuming, and expensive.

Now, Louisiana allows executors to be "independent executors." And Louisiana law allows administrators of an intestate Succession to be "independent administrators." So what does that mean?

An independent executor and independent administrator can take certain actions without having to get pre-approval by a judge. The independent administration does not by any means eliminate the Succession, but the independent administrator or independent executor can pay bills, sell Succession assets, and take other certain specific actions without having to get a judge to approve the action in advance. The inventory or sworn detailed descriptive list is still required. Accountings are required (unless waived), and a judge is still required to order the transfer of assets.

How does one become an independent executor? One of two ways. Either the Will authorizes it expressly. Or, if the Will does not authorize it, the heirs all sign off on an Agreement to allow the executor to be independent.

How does an Administrator become an Independent Administrator. Well, all of the heirs who will inherit under state law must sign an Agreement to allow the court-appointed Administrator to be an Independent Administrator.

Note that if you are involved in a Succession in Louisiana and the executor or administrator is not independent, it is highly likely that one or more parties are being uncooperative, and the Succession will last a long time and be a significant burden on all parties involved.

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.

What is an Executor or Administrator of a Louisiana Succession: 7 Questions and Answers

What is an executor?

An executor is the person named in someone's Last Will and Testament whose job it is to work with the court system to have the assets of a deceased person transferred to their heirs.

Example. Pete wrote a Will leaving his entire estate to his three children. In Pete's Will, he named his oldest child, James, as the executor his Will. When Pete dies, it's James' job to hire an attorney and oversee the Succession or Probate court proceeding to make sure that Pete's estate gets managed correctly and that, ultimately, Pete's three children inherit Pete's estate at the conclusion of the Succession proceedings.

What is an administrator of an estate?

Sometimes people die without ever having written a Will, and a Succession is necessary to transfer the assets that are in their names, to their heirs. Often, the proper Louisiana court will appoint an Administrator to manage the assets of someone who died without a Will. The Administrator's job will also be to follow all of the court rules and see to it that the assets of the deceased ultimately get transferred to the heirs. When someone dies without a Will, state law dictate who inherits, so the Administrator must work with those people throughout the Succession court proceedings.

Example. Seymour died without a Will. Seymour had three children, but one of his children predeceased Seymour. Seymour's predeceased child had five children. After Seymour dies, one of the grandchildren quickly hires an attorney and petitions the court to appoint her as the Administrator of Seymour's Succession. The court appoints the 19 year old grandchild to be the Administrator of Seymour's Succession. The grandchild then will gain access to all of her grandfather's assets while she works with attorneys and the rest of the heirs to manage the estate and ultimately, have a judge order that assets be transferred to the heirs that state law provide that the estate must be transferred to.

What is the difference between an Executor and an Administrator?

Actually, the roles are similar. When someone dies with a Will, the person who wrote the Will named an executor, and the executor must work with heirs and attorneys to manage the estate as it goes through the court process. When someone dies without a Will, then obviously, an executor of a Will was not named, so the proper court must appoint an Administrator to manage the estate under similar rules that an executor would manage an estate.

What is an Independent Executor?

If the Will stated that the executor may act as an "independent executor," then the executor will be permitted to take certain actions that are involved in completing a Succession without having to get a judge's approval in advance.

Example. Jeff's Will stated, "I appoint my daughter, Margaret, as executor of my Will. My executor may act as an independent executor." If Margaret were simply an executor - and not an independent executor - she would need to formally petition a judge to get express written permission from a judge to sell Jeff's house, stock, car, or even his personal items, after Jeff died. This can be a real nuisance and a financial burden when Margaret tries to settle Jeff's estate. But since Margaret is an independent executor, a Succession is still required, but Margaret can take certain actions (like selling estate assets) without first having to petition the court to take that action.

Virtually every Will written in Louisiana these days should authorize the executor to act as an independent executor. If a Will written in Louisiana does not have these express provisions authorizing the executor to serve as an independent executor, then either:

  • the Will was written prior to 2001 when the "Independent Executor" position was created by state law; or
  • the attorney who prepared the Will is shamelessly ill-informed.

What if the Will does not authorize the executor to be independent?

There's hope. If the Louisiana Will does not authorize the executor to be an independent executor, then, generally speaking, all of the heirs can sign an Agreement authorizing the executor to serve as an independent executor. But it must be unanimous. A few other details exist that must be complied with but your Succession Attorney can help you verify whether the Succession you are working with can operate under the independent administration rules.

What is an independent administrator?

If the person who died had no Will, then the court will appoint an Administrator of the Succession. An Administrator must get every action approved by the judge. However, if all of the heirs sign an Agreement allowing the Administrator to be an Independent Administrator, then the administrator can act under the simpler "independent administrator" court proceedings. Every court-appointed Administrator should seek to be appointed as an Independent Administrator.

Does having an Independent Executor avoid probate?

No. Even if there is an independent executor or an independent administrator involved in a Succession, the Succession is still required. There must be court proceedings to get the independent executor or administrator appointed or confirmed. The assets, liabilities, and estate expenses must be documented and valued, the heirs must sign off on the plan for distribution, and accountings are necessary. Judges will still need to get involved to sign various court orders, and court orders will have to be distributed to various heirs, financial institutions and other third parties to "un-freeze" the estate assets to have them managed and ultimately distributed to the heirs.

What is a Louisiana Succession or Probate?

A Succession is the court-supervised process of transferring a deceased person's assets to his heirs.

What's the difference between a Succession and Probate?

Really, nothing. In Louisiana (where our laws are different from the laws of the other 49 states), the court proceeding is called a Succession. In all of the other states, it's commonly referred to as a Probate. For purposes of this book, since we will be focusing on the procedure that must occur when a Louisiana resident dies, I'll call it a "Succession." Although you are free to refer to it when talking to your attorney or others as "Probate." In Louisiana, both terms are acceptable.

Example. Carol and Peter had been married for 40 years. They owned a home, an investment account, two vehicles, bank accounts, and a certificate of deposit. Peter died. Peter's Succession is necessary. After Peter dies, title to the home, investment account, and other assets are frozen. Carol (or perhaps Carol and their children - depending on who the heirs are) will hire an attorney, and the family and the attorney will work together to gather family and asset information, prepare and sign court pleadings, and ultimately have a judge order the transfer of assets out of Peter's name into the names of the heirs. Peter's estate assets will be used to pay for these proceedings, and it is likely that it will take anywhere from a few months to years or more to complete this matter, based on many factors.

Which Families Must Complete a Succession?

Anytime a Louisiana resident (or "domiciliary") dies, owning assets, a Succession is required to oversee the management and distribution of the assets to the appropriate heirs. Some people mistakenly believe that if one dies with a Last Will and Testament, that the Succession is avoided. Unfortunately, those people are wrong. When a Louisiana resident dies with a Last Will and Testament, a Succession is still required. The Will simply names an executor (who is in charge of seeing that the court-supervised Succession is handled the right way, and the Will tells a judge who to make sure the remaining Succession assets get transferred to at the conclusion of the Succession proceeding.

What is the Louisiana Small Succession Affidavit Procedure?

A simpler procedure may be allowed if a Louisiana resident dies and all of the following occur:

  • The gross estate of the deceased is less than $75,000; and
  • The deceased died while domiciled in Louisiana; and
  • The deceased did not have a Last Will and Testament.

Other requirements apply but if all of the requirements are met, the family does not have to go through the full-blown Succession judicial proceedings, but the family will still likely have to hire an attorney to deal with the complexities of the Small Succession Affidavit procedure. Further, some third parties may not honor the Small Succession Affidavit. Some brokerage institutions may require that the family complete the entire Succession judicial proceedings before the authorize the transfer of assets to the appropriate heirs.

Do All of the Assets Have To Be Involved in the Succession Judicial Proceeding?

Not necessarily. Many people own "non-probate" assets. There are assets that are titled in a way so that they pass to others at death without the requirement of Succession court orders.

Example. James died leaving three children. James' Last Will and Testament left his estate to his three children equally. When James died, James owned a home, 100 shares of stock in a brokerage account, a vehicle, a boat, an IRA, and an annuity. After James died, James' children were required to hire an attorney (or multiple attorneys) in order to complete the Succession and have the home, stock, boat, and vehicles transferred to the children. But the children were able to work directly with the appropriate financial institutions to have the IRA and annuity transferred to the children. IRAs and annuities are typically structured so that they have "beneficiaries" named. Since James had named his three children as the beneficiaries of his IRA and annuity, these assets were not part of the Succession proceeding. But since James was not permitted to name a beneficiary of his home, stock, boat, and vehicle, the Succession judicial proceedings were required in order for the government to oversee the distribution of James' "probate assets."

What Information Do You Need To Gather To Complete a Succession?

Your Succession attorney should be able to give you a list of what information you need to gather to complete the Succession. The information that you need to supply depends on what the deceased owned, who the heirs are, and other factors. But for starters, you can expect to have to provide the following:

  • The names and addresses of all of the parties involved in the Succession, including all of the heirs and any creditors that are owed;
  • A complete listing of all assets the deceased owned, including real estate legal descriptions, brokerage account statements, bank statements, and boat and vehicle titles;
  • A complete listing of all debts of the deceased, including mortgages, credit card balances, and any other indebtedness;
  • The original, signed Last Will and Testament. The original Will (not a photocopy) must be filed into the Succession record at the courthouse.

There can be quite a bit of additional information that is required, based on the circumstances, but this should get you started in the right direction.

What Kind of Attorney Should You Hire To Avoid Problems With the Succession?

Not every attorney is well-versed in the intricacies of Louisiana Succession and Probate law. Many attorneys spend their days and their careers dealing with car accidents, truck accidents, divorces, immigration law, criminal law, corporate law, or any of the many other legal fields. Most lawyers don't deal with Succession law every day. At a minimum, you should hire an attorney that has the following attributes when you are retaining counsel to walk you and your family through this difficult process at this difficult time:

  • Hire an attorney who has significant experience handling Succession legal matters.
  • Hire an attorney who will listen to your needs rather than simply vomit information at you.
  • Hire an attorney that will help you determine the simplest path to complete all matters related to the Succession, and then provide you with a fixed fee amount, in writing, for the services to be performed. Don't get caught in the trap of, "We'll just simply bill you at several hundred dollars per hour," and then walloped with bills each month for your phone calls that weren't promptly returned, your emails that did not get responded to, and questionable time spent by the attorney or his staff in an attempt to complete a process that will take longer than you want or expect.
  • Hire an attorney who understands the complex tax consequences that a Succession involves. Not just the estate tax - but the heirs are likely to have income tax and capital gains tax issues that can be minimized or avoided with the right Succession attorney advising you.
  • Hire an attorney who is recommended. Does the attorney you are considering have dozens or hundreds of testimonial letters from previously satisfied clients, glowing about the attorney's professionalism, courteousness, and promptness? If so, this would be a sign that you are on the right track to hiring the right Succession attorney.

What is the Executor's Role in a Succession?

An executor is not necessarily involved in every Succession. Some Successions are completed "without an administration" rendering an executor unnecessary.

Example. Dad died with a Last Will and Testament leaving everything to Mom. Dad and Mom owned a home, three joint bank accounts, and two vehicles. A Succession was necessary after Dad died so that the home could be re-titled into Mom's name solely. This would allow the home to be sold by Mom in the future. Since the bank accounts were joint accounts, they were not frozen - Mom continued to have access to the three bank accounts after Dad died. Mom had no desire to "quickly" sell the home or the cars. When going through Mom's Succession, Mom was advised that she could complete the Succession without actually getting "confirmed" as the executor. Mom and the attorney petitioned the court to order that Dad's portion of these assets be transferred directly to Mom. The judge signed this court order (called "Judgment of Possession), ordering that the home and vehicles and bank accounts be transferred to Mom. The attorney filed the Judgment in the real estate records of the parish, and Mom brought a certified copy of the Judgment to the Office of Motor Vehicles. The end result was that the home and vehicles were put in Mom's name, and Mom still had access over their joint bank accounts.

However, when assets need to be managed in an estate, then the court often confirms an executor who gets access to these assets while the Succession is taking place.

Example. Tommy dies leaving his estate to many heirs. He includes bequests to all of his children, his grandchildren, and even most of his nieces and nephews. Tommy owned stock, several pieces of real estate, and a business. In Tommy's Will, he appointed Rita as his executor. Immediately after Tommy dies, Rita locates a buyer for one of Tommy's pieces of real estate. Because it will take many months or years to complete Tommy's Succession due to the complexity and the number of people who have to be represented by an attorney, Rita petitions the court to have herself confirmed as the executor. The court quickly confirms Rita, and now Rita can start the process of selling the property as the executor of Tommy's estate. The sale does not have to wait until years later after the property gets transferred to many co-owners.

What is an Independent Executor?

Back in 2001, the Louisiana Legislature created the position of "Independent Executor." When someone is simply an "Executor," every action they take in the administration of the estate must be approved by a judge - sell a car or piece of real estate, sell stock, pay debts, etc. But if the executor is an "Independent Executor," then the Independent Executor can take certain actions without the necessity of getting a judge to approve the action in advance. Having an Independent Executor does not eliminate the need for a Succession, but it eliminates some of the onerous aspects of a Succession.

What Taxes are involved in a Succession?

Plenty. While most estates are not subject to the federal estate tax, most Successions have some form of income tax consequences and capital gains tax consequences. Capital gains taxes can be incurred when an estate or heirs sell property, and income taxes are often incurred by heirs or beneficiaries - particularly if the heir is also a beneficiary of a Traditional IRA or an annuity.

Who Should Sell The Home: The Executor or the Heirs?

We've been dealing with a probate matter In East Baton Rouge Parish for a few months now. Dad died. Dad owned a home, some bank accounts, some investments, and a vehicle - pretty normal stuff. Accounts were frozen immediately when Dad. Dad had a Last Will and Testament naming Daughter as the independent executor. The Will leaves Dad's estate to eight different heirs.

Dad's house now needs to be sold. People are asking me what's the easiest way to get Dad's house sold. I told them that they have two options:

  1. Keep the estate open and have the one Independent Executor sell the home on behalf of the estate. When the Independent Executor sells the house, the check will be payable to "Estate of Dad," and Daughter, as Independent Executor, will deposit the check into an Estate account that she establishes. Then, we prepare the necessary accounting and get the proper court judgments to allow those estate funds to be disbursed to the eight different heirs in the proper proportions.
  2. Close out the estate, get the final judgment transferring the house to the eight heirs, and then having the eight heirs list and sell the house. This process settles the estate quicker and transfers Dad's assets to his heirs, but all of the eight heirs, as the new co-owners o the home, will have to participate and sign off on the listing of the home, the negotiation, and all eight heirs will have to participate in the closing of the home when those documents are prepared and need to be executed.

In this instance, it was a pretty obvious choice. The decision made, and the one we are moving forward on, is to keep the estate open, have the independent executor sell the home by herself, and then go through the process in a few months (or perhaps even years - depends on how long it takes to complete the sale) go through the final probate process of preparing the necessary accountings for the court, and petitioning the judge to sign off on the final court orders so that the executor and the financial institutions are ordered to release remaining funds to the heirs in the proper proportions.