Succession Louisiana

The Succession Detailed Descriptive List

In every Succession in Louisiana when someone dies with assets in their name, the lawyers must prepare a number of court pleadings. One of the documents is commonly referred to as the "Detailed Descriptive List" or the "Sworn Descriptive List of Assets and Liabilities." I'll refer to it as the DDL.

The DDL is a snapshot of all of the assets and debts that a person owned when he or she died. If the deceased owned separate property, those separate assets would be listed. If they owned community property, then all of the community assets would be listed on the DDL. You would see the deceased's one-half value of the community property listed.

So, what assets get listed in the DDL? Well, it's all of the Louisiana real estate, the bank accounts, the investments, the business interests, and the boats, trailers and vehicles. No formal appraisal of real estate is required but a value must be placed on each asset listed on the Detailed Descriptive List. Note that if the estate is larger than $11.2 million, and a federal estate tax return is required, then the real estate will need to be appraised for purposes of federal estate tax return reporting. 

It's also important to note here that the capital gains tax basis of any appreciated assets gets stepped up to the fair market value on the date of death. Some people, years after the death of a loved one, go back and refer to the values listed on the detailed descriptive list to determine the basis of assets.

In addition, all of the debts of the deceased, and administrative expenses, get itemized on the DDL.

It's important to get the DDL right because all of the data from the DDL get transferred to the Judgment of Possession, which is the important court order that a judge signs ordering the transfer of assets to the heirs. One difference between the DDL and the JOP is that the JOP does not typically list the values of the assets to be transferred - it just lists the assets.

In 2017, the Louisiana Legislature provided that the Detailed Descriptive List, which in the past was public record, can now be sealed in the Succession record. This sealing of the DDL may prevent predators from searching probate records and preying on surviving spouses who have some wealth.

To get more information about completing a Succession in Louisiana, you can subscribe to our youtube channel, or view our website at www.RabalaisEstatePlanning.com.

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

Importance of Documenting the Accounts in a Louisiana Succession After the First Spouse Dies

We started working on a Succession today out of our Baton Rouge office. The wife had passed away. Her husband was talking to me about helping the family get the Succession complete. The couple had been married for about 20 years, but they each had children from their prior marriages. The deceased wife had two children. The surviving husband had three children. The husband said that, for now, the relationships were good between himself and the two sets of children. He was hoping that the fact that his wife's estate needed to be settled would not harm the relationships among all of the parties involved.

Usufruct To Spouse - Naked Ownership To Children

We discussed how her wife left a Will leaving him the lifetime usufruct of her estate, and she named her two children as the naked owners. He stated that he wanted his three children to inherit his estate when he dies.

He brought in a list of all of the various bank accounts and investment accounts. They had about five bank accounts, an investment account at Fidelity Investments, and they owned a home worth about $500,000. We discussed how important it is now to fully document all of the bank accounts, investment accounts, debts, credit card balances, funeral expenses, and medical bills outstanding, because when the husband later dies, the children of the two spouses will look back to how the assets were listed when the first spouse dies to determine who inherits what after the surviving spouse dies.

I gave the husband an example. I said, "Let's assume that the two of you owned bank accounts totaling $200,000 when your wife died. Let's also assume that the two of you had credit card and home equity debt of $40,000. Further, let's assume that there were $15,000 of funeral expenses. What all of this means is that when you die, your estate will owe your wife's children $65,000."

Usufructuary Accounting

He asked me how I came to that calculation. So I said, "Well the $200,000 of bank accounts are community property so you each own half of those accounts. As the usufructuary. you own your half of the accounts, and your estate will owe your wife's children her half of the accounts when you die. So, let's start with the fact that you will owe her children $100,000. Now, since there was $40,000 of community debt, your wife's share of that is $20,000, and you can deduct $20,000 from what you owe her children. And since there were $15,000 of funeral expenses, you can also deduct that amount from what you owe. So, $100,000 minus $20,000 minus $15,000 totals $65,000. That's the amount your estate will owe your wife's children when you die."

Then, we started talking about their home. The surviving husband said he intended to sell the home in a few months and move into something smaller. So I gave him another example regarding their home. I said, "Let's say you sell the home in six months for $520,000. At that moment, you converted a nonconsumable (the home) into a consumable (cash). If you sell the house for $520,000, you will get to keep all of the money, but upon your death, your estate will owe your wife's children $260,000 (one-half of the sales proceeds). 

The mistake many families make is that even though money typically does not go to the children upon the death of the first spouse, it is critical to properly document the assets as part of the Succession process. If things are accurately documented in the Succession (also known as "Probate") when the first spouse dies, it will make it much easier to accurately divide the assets after the surviving spouse dies. Shoddy records after the first spouse's death will likely lead to estate settlement disputes after the surviving spouse dies because the families will often have to "guess" at what assets and accounts existed years earlier when the first spouse died and there are no longer records from years earlier.

Louisiana Statewide Succession and Estate Planning Legal Services

If you want to set up an estate legal program and you live in Louisiana, whether you live in Baton Rouge, Covington, Metairie, Lafayette, Lake Charles, Shreveport, Monroe, or Alexandria, or if you've lost a family member and you want to make sure that the estate settlement is handled the right way to avoid disputes, now or later, among family members, give our Louisiana toll-free number a call at 866-491-3884, and we will be happy to have a conversation about how easy it is to do it the right way, the first time.