Revocable Living Trust Louisiana

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
www.RabalaisEstatePlanning
Law Offices: All over South Louisiana
Phone: 866-491-3884

Key Feature of a Louisiana Revocable Living Trust

In the past few months our firm has been preparing an abundance of Revocable Living Trusts for Louisiana residents seeking to avoid probate or succession, as it is called in Louisiana. One of the essential parts of a Louisiana Revocable Living trusts is what's known as a pour-over will. Often clients are confused by this term, because their thinking is; "If I have a revocable living trust I shouldn't need a will". Well I'm here to explain exactly what the pour-over will is used for.

When you have a revocable living trust, your Louisiana pour-over will is a essentially the back-up plan for property that is not a part of your trust when you die.  First, the pour-over will governs the distribution of your assets that will not need to pass through a Louisiana succession or probate procedure. These assets include your vehicles and personal effects. The pour-over will is in place to dictate what will happen to such assets.  The other assets that the pour-over will covers are assets which should have been placed in your living trust, but for some reason or another, have not made it into the trust. The pour over will is there just in case there are some assets that still need to go thorough probate. The pour-over will typically leaves these assets to your living trust to be distributed according to the terms of the trust. However, the hope, in setting up a Louisiana revocable living trust, is that your estate will never need to pass through a Louisiana Succession.

If you are interested in setting up a revocable living trust, give me a call and I will work with you to establish a plan to protect your assets and provide great peace of mind.

Assets Louisiana Residents Do Not Neet to Transfer to a Revocable Living Trust

A lot of couples that come into my office want to avoid a Louisiana Succession by creating and maintaining a Revocable Living Trust.  But what many people don't realize is that some of their assets, such as IRA's and life insurance policies, do not go into a trust if the ultimate goal is to avoid probate.   These types of assets are payable to determined beneficiaries, and as long as the beneficiaries are properly designated, a trust does not have to be involved.

There are other types of assets that do not have to be transferred to a Revocable Living Trust and probate can be avoided.

1. Checking and Savings Accounts.  If you simply add an adult child to your bank account as having signature authority, then after you die, that child can have immediate access to the account, close the account, and divide the funds between your heirs.  All of this can be done without the involvement of the court.

2. Vehicles.  If the person you want to ultimately receive ownership of your car provides the Will or a photocopy of the Will to the Louisiana Office of Motor Vehicles, they will transfer the title after death without court intervention.

3. Personal Effects.  Because your personal belongings are not titled, family members usually divide personal effects after the death of a loved one without the involvement of the court.

If your ultimate goal is to set things up so your family doesn't have to participate in the lengthy and costly court probate process, then assets would typically require court involvement must be in a trust.  These types of assets include real estate, mineral interests, stock, Certificates of Deposit, interests in limited liability companies, other business interests, and non-IRA investments. 

Since many people have a large portion of their estate in retirement accounts, it's fairly easy to avoid probate by retitling the home and other probate assets to your trust.

Baton Rouge Couple Wants To Keep All Estate Affairs Private

I was working with a couple today. They own quite a bit of real estate. They own property in Baton Rouge, Zachary, St. Francisville, New Roads, Prairieville, and St. Amant. One of the most important things they want to accomplish is to provide for an ultimate distribution of their property to certain family members, without the other family members having any knowledge of it.

They ruled out making all of these bequests in their Wills, because they know that when they die, it is required that their Wills be filed into the public record for all to see.

They were also concerned about putting their Louisiana real estate in their revocable living trust, because when real estate is in a trust, a summary extract must be recorded in the parish. This extract must show who the parties in the trust are.

But we worked out a solution where he could keep all of his estate planning legal affairs private. He put his different pieces of property in LLCs, and he provided for the distribution of the LLCs in his revocable living trust. Therefore, nothing needs to be filed in the public records since the trust owns no property. The trust owns membership interests in LLCs. So, the people who they intentionally left out of the trust will not be able to determine who the properties or LLCs were left to.

If you live in Louisiana and you want to engage an estate planning attorney to keep all of your estate legal affairs private, out of the public court system, and out of the court-supervised probate proceedings, then perhaps you should email me at paul@rabalaisestateplanning.com to determine whether we should talk about how to get it right.

Whether To Leave Percentages or Specific Amounts To Your Heirs or Beneficiaries

Was working with a family today from Metairie who wanted to leave a bequest to many difference grandchildren, great-grandchildren, and even certain step=grandchildren. They also wanted to leave the bulk of what they had to their five children when they died.

They asked me whether they should leave a specific amount to these descendants who were at least two generations below them (say, for example, $25,000 to each one), and leave the rest of their estate to be divided equally among their five children. We discussed, however, the alternative of leaving a large portion (say, for example, 75% to be divided equally among their five children, and leaving the remaining 25% to be divided equally among the specific grandchildren and great-grandchildren that they wanted to benefit.

These kinds of estate planning decisions can be tricky. Generally, if someone wants to leave others a small amount, designed primarily to acknowledge the recipient, we usually see them leave a specific dollar amount to those beneficiaries or heirs. This is, perhaps, a simpler way to acknowledge a recipient. It gets more complicated when you leave each of several people 1% or 2% of your estate - the recipient might want to review accountings to make sure they are getting the correct amount. But if you leave someone a fixed amount like $10,000, it does not matter how large the overall estate is, the recipient will get his $10,000, whether the overall estate totals $300,000 or $3,000,000.

If you are wanting to leave each of several people a significant amount of your estate, then perhaps it's easier to leave each of them a percentage of the overall estate. For example, if you want to leave a substantial bequest to your two children and your three grandchildren, then perhaps you would leave 20% of your estate to each of the five. If, for example, you leave $200,000 to each of your three grandchildren, and leave the balance to be split among your two children, and if your estate does not exceed $600,000 when you die, then your children will get nothing because the specific bequests ate up the entire estate.

Your decision to leave specific dollar bequests versus a percentage of the estate is both important and tricky. Your estate will likely fluctuate in value from the time you put your estate planning legal program in place, until the time you pass away and your program plays out. This is a good reason to review your estate planning program every few years and, if necessary, work with your estate planning attorney to keep it current.

Does a Louisiana Revocable Living Trust Protect Assets from Nursing Home Expenses?

I was working with a couple from Opelousas today. The wife's father just died last month after a stay at a nursing home in Louisiana. The wife's parents had to spend all of their money on her nursing home expenses, including their checking account, savings account, their annuities, IRAs, and savings bonds. The wife's mother, who still lives in the home, realizes that when she dies, Medicaid's Estate Recovery Program will force the sale of the home to reimburse Medicaid for what they spent on the wife's father's nursing home expenses after the couple had spent all of their own money.

The couple that I was working with set up a revocable living trust about seven years ago. The trust now owned their home, their rental property, and their hefty checking and savings accounts. The couple does not want to ever reside in a nursing home, but they want to be prepared if they need long term care. They don't want what is happening to her parents to happen to them.

They asked me the question, "Paul, while I know that our assets that in our Revocable Living Trust avoid probate when we die, are these assets also protected in case we have to go in a nursing home?"

My answer was, "Not a chance," All assets in a revocable living trust must be spent if the person who set up the trust enters a nursing home. So, after about an hour of some rather in-depth discussion and education, they asked me to help them set up a new kind of trust - one that would give them protection if they go into a nursing home at least five years from now. We'll be performing all of the legal services to set up their new trust, and transfer assets out of their revocable living trust, and ultimately into their new trust which gives them the nursing home poverty protection they are looking for.

Congratulations to them for taking the simple but pro-active steps to protect what they worked for from long term care expenses.