Succession Attorney Louisiana

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.

Starting a Louisiana Succession: Info To Gather

There is certain information that needs to be collected prior to starting a Louisiana Succession judicial proceeding. Getting off on the right start with the right information can enable the attorney and the family to design, agree on, and implement a plan to be as efficient as possible.

It typically starts with determining whether a Last Will and Testament exists. Many surviving family members have come to my office to discuss completing a Succession - but they neglect to bring the Will.

If a Will exists, we want to look closely at who the executor is. Is the executor an independent executor? Who are the heirs (also known in Louisiana as "legatees")? Are all of the people named n the Will still alive? Answers to all of the questions will help determine who the participants are in the Succession. You need to include all of the participants early on because their cooperation is necessary to conclude various Succession matters.

In addition, you'll want to gather all of the asset information. Make sure you get everything - all of the legal descriptions of real estate that the deceased had an ownership interest in, all of the bank accounts and investment accounts, any small business interests like limited liability companies, corporations or partnerships, any, vehicle titles, and anything else titled in the name of the deceased, or that the deceased had a community or separate property ownership interest in. Failing to gather all of the necessary asset and debt information on the front end may lead to frustration on the back end when you have to either start over or continue going back to court to petition a judge to amend the Succession court orders - this all takes additional time and money.

Once you have a good understanding of the provisions of the Will, the participants in the Succession, and all of the assets are involved, you and your attorney(s) should be able to devise a plan to complete all matters related to the Succession - from start to finish.

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.

Louisiana Succession With Land, a Mobile Home, and Bond Mutual Funds

Working with a really nice family getting their parents' Successions completed. Met with all of the children a couple of times as we developed an efficient plan for getting everything done. The parents' had Wills essentially leaving everything to the children equally. The Wills named two of the children as the co-executor. After going through quite a bit of information and discussion, our firm will be leading them through the Succession process that will look something like this:

  1. Step One - Confirmation of independent executor. We have already prepared, and all of the heirs have already signed, the initial court paperwork to get the executor "confirmed." Since the Will was written prior to 2001, we had to get all of the heirs to sign this paperwork. As an independent executor, the executor can take certain actions without having to get a judge's approval first.
  2. Step Two - Estate account. Once the executor is confirmed by the court as the independent executor, the clerk of court will issue "Letters of Independent Executorship." The executor will then take these "Letters" to the brokerage firm and establish an estate account at the brokerage firm. The parents' brokerage account is currently frozen. But with the Letters, the brokerage firm will be required to establish an estate account and move the investments from the frozen brokerage account into the new estate account.
  3. Step Three - Managing the estate account. Expenses of the estate will be paid from the estate account. The family decided to sell the investments in the estate account so that cash will be readily available to pay expenses and ultimately, distribute to heirs. The refund check from the nursing home that is payable to "Estate of....." will be deposited into the estate account. The proceeds of the sale of the mobile home will be deposited into the estate account.
  4. Step Four - Detailed Descriptive List of Assets and Debts. Our office will prepare the required Detailed Descriptive List of Assets and Debts that the court must have before assets can be distributed to heirs.
  5. Step Five - Judgment of Possession. Our office will obtain the necessary court Judgment which orders third parties to transfer assets to the four heirs. A certified copy of this judgment will be recorded in the parish where the family owns land - this makes the heirs the new owners of the property. After expenses of the Succession are paid, the executor will distribute remaining funds in the estate account to the heirs, equally, in accordance with the Last Will of the parents.

There you have it. Often glitches appear when settling an estate and it's likely that "stuff" will pop out of the woodwork as we work on this, but wanted to give you an idea of a few of the steps that are involved in completing a Succession.

Let me know if a loved one has passed away, and the heirs want a simple and expedited process for getting all matters settled.

How To Complete the Probate of a $1 Million Louisiana Estate

I've handled many Louisiana Successions over the last 25 years. Every one is different and there can be many different ways to "skin the cat." But I want to give you an overview of what typically is involved when a "typical" one million dollar estate is being probated in Louisiana.

First, some terminology - Probate or Succession. When someone dies with assets in their name in the United States, it is up to our government (the judicial system) to see to it that those assets are managed properly and then ultimately transferred to the rightful heirs after all applicable delays and court costs, attorney fees and other administrative expenses have been taken care of. The fact that the government must oversee this is the topic of another discussion.

All other states, except Louisiana, call this court-supervised process "Probate." In Louisiana, it is also commonly referred to as a "Succession." For purposes of this discussion, I will call this procedure in Louisiana - "Probate."

So let's look at an example. Dad died years ago leaving everything to Mom. Now, Mom just passed away three weeks ago. Mom lived in Louisiana when she died. Mom had previously signed a Last Will and Testament ("Will") leaving her entire estate equally to her three children. She named her oldest child ("Sonny") as the executor of her Will. When Mom died, she owned a home worth $300,000, bank accounts valued at $100,000, CDs valued at $200,000, an IRA valued at $150,000, a separate stock account valued at $100,000, an annuity valued at $50,000, US Savings Bonds valued at $50,000, a vehicle valued at $20,000, and other personal effects valued at $30,000. Mom also had a few debts. Mom has two credit cards (each with a $5,000 balance). There are ongoing insurance and maintenance expenses associated with the house. Mom's daughter, Sissy, paid the $10,000 funeral expense out of her own pocket.

So, here are the typical steps involved in settling this million dollar estate.

  1. Attorney For The Children. Generally, each child must have an attorney since all of the children are participants in this court proceeding. For purposes of this situation, let's assume that all of the children are represented by the same attorney. All communications with the attorney will be with all of the children present. There is no conflict between any of the children. If there is any conflict among the children, then different children will have different attorneys and the proceeding will likely move much slower through the court system - in fact, many contested probates never wind up getting fully resolved.
  2. IRA and Annuity. Let's assume that Mom designated her three children as the equal designated beneficiaries on the IRA and the annuity with the particular financial institutions. If so, then the three children can apply directly to these financial institutions to get their benefits. We'll talk taxes later, but the beneficiaries will include distributions they receive from Mom's IRA as taxable income, and they will also have to pay income tax on the gain that was recognized inside of Mom's annuity.
  3. Get Sonny Confirmed as Independent Executor. Court pleadings will be prepared, signed, and filed at the courthouse to open the Probate and to petition to be confirmed as the Independent Executor. Let's assume Mom's Will not only designated Sonny as the executor, but she authorized him to act as an Independent Executor. It is critical that Sonny be confirmed as the Independent Executor so that he can start to gain access to Mom's accounts, pay bills on behalf of the estate, and perhaps sell estate assets that need to be sold. When the judge signs this first court order, the clerk of court will issue certified copies of the "Letters of Independent Executorship."
  4. Open Estate Account. Once Sonny receives the court-issued Letters of Independent Executorship, he will go to a bank and open an Estate Account. Sonny cannot open an estate account until he has these "Letters."  Let's assume he opens the Estate Account at the same bank that Mom used. The bank will open the Estate Account and they will transfer Mom's frozen bank account funds and her frozen CD funds into the estate account. There will be no penalty for early surrender of the CDs when the bank transfers the funds out of Mom's CDs into the Estate Account.
  5. Detailed Descriptive List of Assets and Liabilities. The family provides information to the attorney regarding the specifics of Mom's assets and debts when she died. The court requires that a detailed listing of all assets and debts be filed into the court record before a judge can authorize a distribution of estate assets to the heirs.
  6. Separate Stock Account. The children talked and decided that since they have no emotional attachment to the stock that Mom owned, it would be best to sell the stock and divide the proceeds of the sale among the children. Sonny, armed with his Letters of Independent Executorship giving him authorization to sell estate assets, sells the stock. The check from the sale is made out to: Estate of Mom. Sonny deposits this check into the Estate Account at the bank.
  7. Mom's Home. Since all three children have their own homes, the children agree that it would be best to sell the home. The children quickly clean out the house and Sonny, as the Independent Executor, gets with a realtor to list the home for sale. Two months later, they find a buyer to buy the house from the estate. Sonny attends the closing. The check for $300,000 produced at the house closing is payable to "Estate of Mom." Sonny deposits these funds into the estate account.  There is no tax on the sale of the house because, even though Mom and Dad purchased the home years ago for $120,000, the children will enjoy the "step-up in basis" at Mom's death. Since the new basis is the value of the home at Mom's death, and since there is no better way to determine fair market value than what a willing buyer and willing seller agree to shortly after death, it is fair to say that the basis was the sales price ($300,000). So, there was no capital gains tax to be paid upon the sale of the home.
  8. U.S. Savings Bonds. When Mom died, she owned 87 U.S. Savings Bondsthat were valued at $50,000 when Mom died. Mom had originally paid $33,000 for these savings bonds. The children decide to keep things simple by selling all of the bonds. Sonny goes through the process of selling all of the bonds, as the Independent Executor, and depositing those proceeds into the Estate Account. Income tax will have to be paid on the difference between what the US Savings Bonds were sold for ($33,000) and what they were sold for ($50,000). This taxable gain is $17,000.
  9. Mom's Vehicle. The children decide to sell Mom's old Lincoln. Sonny sells the vehicle. The check is payable to Estate of Mom. Check deposited in Estate Account.
  10. Personal Effects. The children get together at Mom's home shortly after Mom died and, informally, agreed on how Mom's personal effects are to be divided. Perhaps Mom may have even communicated to the children, or made an informal list of instructions, regarding her personal effects. Since these personal effects are not "titled," like an account or a piece of property is, the children are satisfied with their own personal division of personal effects. The attorney does not have to get involved in this aspect of settling the probate.
  11. Paying Estate Bills. Sonny will use the funds in the Estate Account to reimburse Sissy for the funeral expenses she incurred, and Sonny will also use the Estate Account to pay off Mom's credit cards, and to pay house maintenance expenses of the home from the time Mom died until the house is sold. Sonny may very well be required to prepare and file a final income tax return for Mom, which will be due April 15 of the year after Mom died.
  12. Executor Fee. As executor, Sonny is entitled to an executor's fee of 2.5% of the Succession Assets. Sonny does the math and concludes that he is entitled to an executor's fee of $25,000. Sonny has a decision to make: Does he collect the $25,000 executor's fee from the estate (he will pay income tax on this amount because he is being compensated for the services he rendered). Or does he waive some or all of the fee and allow the three children to simply inherit the estate assets one-third each without income tax consequences.
  13. Estate Tax. No federal estate tax is due because the value of Mom's estate is less than the applicable estate tax exemption of $5.45 million. No Louisiana Inheritance Tax is due because Louisiana no longer has an inheritance tax. We discussed above income tax consequences to the children's receipt of the annuity and IRA and US Savings Bonds.
  14. Judgment of Possession. Finally, a judge signs a Judgment of Possession which may close the estate and order that all remaining estate assets be transferred to the three children equally. Sonny, as executor, may want to hold back a sum of money just in case bills come in after all of the funds would have been otherwise distributed.

There you have it. While every Louisiana Succession or Probate is different, this is just one example of things that occur during the legal proceedings related to settling a $1 million dollar probate. Actually, the procedure would be the same whether the estate was worth $200,000 or $4,000,000.

If you have lost a family member, and you want to work with an attorney who will help your family get through all of this quickly and easily while keeping the family relationships intact, give us a call at 866-491-3884 to start a discussion about handling the Louisiana Succession.