Rabalais Estate Attorney

Two Reasons Louisiana Residents Don't Like the Louisiana Usufruct

The Louisiana Usufruct is a form of ownership that no other state has. It is designed to make assets available to another (perhaps a surviving spouse) while preserving the rights of the naked owners (typically, the children.

But many families don't like the application of the Louisiana usufruct laws. Here are a couple of reasons why:

(1) The Surviving Spouse's Heirs May Get Nothing. Let's say Husband and Wife each have two children from prior marriages. They have $1,000,000. Husband dies leaving Wife the lifetime usufruct of his estate. So, the Wife continues to own $500,000, and Wife inherits the usufruct of Husband's $500,000. Wife has a Will leaving her entire estate to her two children.

After Husband dies, Wife spends $500,000 on her care and her basic living needs. Here comes the tricky part. When Wife dies with only $500,000 remaining in her name, the Husband's children come out of the woodwork and proclaim, "We get all of the assets in Wife's estate because her estate owes us $500,000.

So, Husband's children get everything and Wife's children get nothing. This is not what they intended by leaving each other usufruct. They did not intend for the heirs of the surviving spouse to be excluded.

(2) Another problem that comes up often in any usufruct situation (even in traditional families) is that when one spouse leaves the usufruct of the home to the surviving spouse, the surviving spouse cannot sell the home without the written permission of the heirs of the first spouse to die. This often causes friction between the heirs of the first spouse to die, and the surviving spouse.

Both of these circumstances can be solved but you need to plan ahead to solve these problems. Call 866-491-3884 from anywhere in the State of Louisiana to perhaps start a conversation about how your estate legal program can protect yourself, your spouse (if married) and your heirs the right way - and you get it right the first time!

Louisiana Couple With Young Adult Children Can't Leave Everything To Each Other

I met with a middle-aged couple yesterday from Prairieville. They wanted to get their legal affiars in order. They said that getting their legal affairs in order had been on their "to-do list" for a few years, and they were glad they were now getting it taken care of.

They were wanting to keep things as simple for themselves as possible. They indicated that they each wanted Wills leaving everything to the surviving spouse, and then after both spouses died, they wanted everything to go equally to their three adult children, who were 18, 19. and 21.

I let them know that, at least for now, they could not leave everything to each other. Since they still had children who were forced heirs (age 23 or younger), they are forced by Louisiana law to leave their children an inheritance.

I told them they could satisfy these forced heirship rules by leaving their surviving spouse the usufruct of their estate, and naming the three children as the naked owners. Under this scenario, protections would be in place after the first spouse dies to ensure that when the surviving spouse dies, the children of the first spouse to die will receive the inheritance from the first spouse to die.

Example. Mom dies and leaves the usufruct of her estate to Dad, and Mom's Will lists the three children as the naked owners. Mom dies. Years later, Dad remarries New Wife and changes his Will so that his estate goes to New Wife. Since Mom left the usufruct of her estate to Dad and names Mom's children as the naked owners, then when Dad later dies, Mom's estate must go to the children before any of Dad's estate can go to New Wife.

I've written quite a bit more about this in my book, "Estate Planning in Louisiana, A Layman's Guide," but if you have children who are 23 or younger, realize you will not be permitted to leave your estate entirely, in outright ownership, to your spouse. You must satisfy the Louisiana forced heirship rules.

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.