Lafayette estate planning lawyer

Two Types of Louisiana Last Wills: Part One - The Olographic Testament

In Louisiana, there are only two forms of valid Wills (known by our Louisiana law as “testaments.” The two forms are: olographic and notarial. This post addresses the less popular olographic (some people refer to it as an “holographic” Will).

When we discuss whether a handwritten Will is valid, we must look to the terms of the Louisiana statute that defines and olographic testament. Note that there are many, many court cases where lawyers have argued, and judges have determined, whether someone’s handwritten attempt at a Will is valid, and if so, how it should be interpreted.

Nonetheless, our Louisiana law states that “An olographic testament is one entirely written, dated, and signed in the handwriting of the testator.” The statute goes on to state, in part, what it means to be dated and signed, including the fact that writings after the signature do not make the testament invalid and such writing may be considered by the court, in its discretion, as part of the testament.

Many people think that if they just meet the validity requirements of an olographic testament, then everything will go hunky-dory when they pass away. But those people should think again.

It’s easy to make a valid olographic testament, but problems often surface after the death of the testator because the wording was either insufficient, ambiguous, errors were made, reasonable contingencies were not addressed, or bequests were made outright to people when they should not have due to age or financial immaturity.

The bottom line on Louisiana olographic Wills is that it is possible, if not simple, to write your own Will that would be recognized by a Louisiana court as a valid Will. However, if the reason you attempted to write your own Will was to save some costs today, know that the future costs to your estate and your heirs (both financial and emotional costs) will far outweigh any savings you felt you realized by making your own olographic testament.

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

www.RabalaisEstatePlanning.com

Phone: (225) 329-2450

Louisiana Family Supportive After Parent Dies Intestate Requiring Probate

I was contacted by a family recently that had a number of estate planning and administration issues that needed to be addressed.

Mom had died unexpectedly a few years ago. Mom died intestate - which means she had no Will or other estate planning legal documents in place when she died. Mom and Dad had accumulated a fairly significant estate by the time she passed away - including homes, mutual funds, stock, bank accounts, vehicles, and other assets.

Dad is planning on getting married again. Normally, this causes problems between the children of the first marriage and the new step-mom - but not here.

The children were super-supportive of their father. They said, "Look Dad, you raised us, bought us cars, paid for our college education, and you've been a great father. You and Mom don't owe us anything. We want you to have it."

Now that's support from children back to their father! The children realized that they could kick Dad out of his house on the day that he marries Step-Mom - but the kids are better than that.

But we still have legal work to take care of. We will complete Mom's Succession. And then after that, the kids will sign legal documents donating their share of their inheritance from Mom back to Dad. Dad will wind up being the 100% owner of everything. 

Dad is now establishing a new legal plan to support his new wife and his children the right way, and making things easy for them to inherit in the future.

If you live in Louisiana, and are in a situation like this, and would like to find out how easy it is to get all of this straight (and how much of a mess it will be if you don't address it), give my office a call at 866-491-3884, and we'll have a discussion about the easiest way to get all of it straight.

The Right Kind of Louisiana Trust Protects Estate From Nursing Home Costs

Been working with a Louisiana couple who's main concern was losing assets to nursing home expenses in the future. They had a revocable living trust set up years ago by a non-lawyer group. They were hoping that their existing trust would protect those assets from their future nursing home expenses.

Several of their family members had lost everything due to extended nursing home stays. This couple owned a home, rental property, as well as stock and mutual funds.

We quickly realized that their revocable living trust gave them no protection from nursing home costs in the future. So, part of their new estate legal program for these Louisiana residents includes establishing the right kind of trust that allows them to remain in control of their estate, yet have it structured in a way that their two biggest threats to estate depletion (nursing home costs and probate) are no longer a concern.

If you'd like to start a conversation about how you can protect your home and life savings from government interference, give our office a call from anywhere at 866-491-3884

Signature on Life Insurance Form Saves Louisiana Family $1.2 Million in Federal Estate Tax

Been working with a couple from Lafayette, Louisiana on their estate legal program. One of the reasons they said they came to me was that I had a Masters Degree in Tax Law (from Boston University School of Law) and they wanted to make sure that they avoided estate tax as they passed their rather large estate on to their children.

We were going through their list of assets and I noticed that he had accumulated a number of life insurance policies during his lifetime. He had about $3 million of life insurance - it was a cluster of five different policies that he had been sold over his lifetime - some term insurance, some universal life, and some whole life.

He had done what most people do when they are married and they acquire life insurance. The husband had named himself as the owner of the life insurance policies, and he had named his wife as the beneficiary. This is what most people do.

So, if he has his policies structured this way, what will be the estate tax consequences? Well, if the husband dies first, there will be no estate tax as a result of these life insurance policies because the $3 million will be part of the Husband's gross estate, but they will be deducted from his estate under the federal estate tax marital deduction. But the problem is: THE WIFE NOW HAS AN EXTRA $3 MILLION IN HER ESTATE. There will be no way to exclude these funds from her estate. She can't give it away fast enough pursuant to the annual exclusion. These funds will cause an extra $1.2 million of federal estate tax when the surviving wife dies ($3 million * 40%)

We discussed having the husband and wife transfer OWNERSHIP of these policies either to their children, or to an irrevocable trust naming the children as beneficiaries, so that neither the ownership nor the proceeds of the policies would be in the estate of either spouse. We talked about how special rules apply to ownership of life insurance policies such that three years must pass after the transfer of ownership for the death proceeds to be excluded from the estate of the insured.

If you live in Louisiana, whether you live in Baton Rouge, Monroe, Shreveport, Lafayette, Lake Charles, or New Orleans, and you own life insurance and you would like for the death proceeds to not only avoid income tax but also the 40% estate tax, you may want to give our office a call at 866-491-3884 to start a conversation about how to set up your estate legal program to avoid estate tax when you (or you and your spouse) pass away.

Louisiana Parents Want Different Allocation to Their Four Children

Met with a couple in our Baton Rouge estate planning office today. They lived in Gonzales. They has a number of different rental properties throughout Ascension Parish and East Baton Rouge Parish and Livingston Parish.

The couple has four children. Their son works in their rental property business and handles all of the books for them. Their second oldest child has had substance abuse problems and has caused the family lots of grief.

One of the things that they wanted to accomplish was to set up an estate legal program so that after both the husband and the wife died, that 60% of their estate would go to their son in their rental business, and the child who had the substance abuse problems would only get 5% of their estate, and the 5% would remain in the trust until the child proved that he was clean and sober to his three siblings.

The couple feared that if their drug-abusing child got her hands on any money when the couple died, that the money would simply be used to support their daughter's drug habits. So, this was a scenario where we helped a couple in several different ways:

  1. The drug-abusing child will not get a lump sum handed to her. She will have to prove that she is clean and sober before she gets a nickel;
  2. They made the proper allocations to the four children to reflect how much certain children have helped them over the years;
  3. Their estates will not have to go through the Louisiana probates when they die because certain assets will be held in trust, bypassing the probate process;
  4. They won't have to sell any of their rental property if they go into a nursing home since they are setting their legal affairs up in a way so that their "Countable Resources" for Long Term Care Medicaid purposes are minimized; and
  5. Their responsible son who helps them manage and account for their rental property will have the authority to manage things if the couple becomes incapacitated or when they die.

If you live in Louisiana, whether it's in Metairie, Covington, Baton Rouge, Lafayette, Lake Charles, Monroe, Alexandria, or Shreveport, and you have particular family circumstances and you want to make sure that you have a simple but thorough estate legal plan to preserve all that you've worked for, give our office a call at 866-491-3884 to start a conversation with an estate planning attorney who - I guarantee - will put your mind at ease.

Paul Rabalais