estate planning attorney Baton Rouge

Will Prepared Through Suze Orman Kit Invalid in Louisiana

I was contacted recently after a father passed away. The adult children were hoping to get their father's estate settled quickly and easily. They mentioned that their father had been diagnosed with pancreatic cancer, that the diagnosis allowed only a short time to live, so he did a "quickie" Suze Orman will to specify how he wanted to leave his estate.

When I heard about the Will, I told myself I needed to see it. The son told me that the Will was three pages long. I said, "Hang up. Take a picture of each page and text them to me." He did.

Whenever I review a Will for the first time, I always look for two things. First, I confirm that the Will meets the validity requirements for a last will and testament. And second, I look at the actual words and terms used in the Will for bequests, appointments, and other ancillary provisions.

In general, it's pretty easy to make a valid will. But the trickery comes in using all of the right terms in all of the right places.

In this matter though, it took me about three seconds to determine that the Will was invalid.

In Louisiana, there are two types of Wills: olographic and notarial. The olographic will is entirely handwritten. This will was typed. The notarial testament is typically typed, but must be signed "at the end of the testament and on each other separate page." Of the three pages, only one was signed.

In addition, to be a valid notarial testament, the notary and two witnesses must sign a certain declaration that is inserted at the end of the testament. In this Will, there was no notary signature, just the signatures of two witnesses.

So, in about three seconds. I discovered two reasons that this Will is invalid. And yet, there was a third problem. For a notarial testament to be valid, the notary and witnesses must sign a declaration that is worded as described in our Louisiana statute. The declaration in the Will must be at least "substantially similar" to the declaration provided in the Louisiana statute. The declaration at the end of this purported Will was not substantially similar to the declaration provided by Louisiana law.

Since the Will was invalid, it didn't make sense to even look at the terms of the purported Will, since they would have no legal effect - at all. It's unfortunate that this man's final wishes to leave his legacy a certain way would not be followed. Instead, state law will determine who inherits his estate.

The moral of this story is that you should be careful about using the "do-it-yourself" estate planning tools that are out there. Many things can and do go wrong when you attempt to take shortcuts in the estate process.

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

Seven New Louisiana Estate Matters That Walked Into Rabalais Estate Planning During The Last Two Days

I have been fortunate to have seven different families, from Metairie, Baton Rouge, Shreveport, Gonzales, and Zachary. ask me to help them with various estate matters over the last two days. Each family has a different situation and a different concern, so I thought I'd give you a general overview of their problems and how we are solving them so that if you have a similar problem you will know that you are not alone and there is someone that can help who has helped others in similar situations.

Here are the seven different situations that families have retained me in the last two days to help them:

  1. Mom's Investment Account Frozen. A gentleman came and met with me two days ago. His mother had passed away and, as a result, her investment account was frozen. Mom and the son had the same investment advisor. The investment advisor suggested that the son come see me so that we could complete the probate (also known in Louisiana as "Succession") to obtain the necessary court orders which will allow the family to have access to Mom's currently frozen investment account.
  2. Want To Protect Each Other and Teenage Child. A couple came in that had been referred by another financial advisor. The couple had a teenage child and wanted to make sure that their "legal affairs were in order" because they had done no estate legal planning in the past. We will be setting up an estate legal program for this couple to make legal matters easy or nonexistent when one spouse dies, and then making sure that guardians and trustees are named for their minor child should something happen to the parents before the child is an adult.
  3. Couple With No Children. Working with a couple that has been married for decades with no children. They have some pets that are important to them. We will be setting up an estate legal program so that when one of them dies, matters will be under the continued control of the surviving spouse, and that after they both pass away, funds will be set aside for the care of their pets, with the remainder of their estate being divided among four charitable causes that they care deeply about. Nice and fun couple - organized too!
  4. Blended Family. Working with a couple each of whom was in their second marriage. They each had one child. The children lived geographically far apart and had not spent much time together. The couple wanted to make sure that protections were in place for each other so that when one dies, there is no interruption from the children, and then when both spouses die, things are in place for the two children to inherit outside of probate and other court legal proceedings being necessary. Another really nice couple.
  5. Protect Mom's Money From Nursing Homes. Working with a family where Mom is currently residing in an assisted living facility. The family realized that all assisted living facilities in Louisiana are private-pay, but they are worried that if Mom's conditions worsens, Mom will have to move to a skilled nursing facility and be forced to spend $6,000 monthly or more on her care.  We are setting up a legal plan for the family so that Mom's money will be protected if she has to reside in a nursing home in the future. Plus, probate will be avoided when Mom dies.
  6. Execute Will. I wrote a Will for a woman many years ago. She passed away recently. I met with the family and they retained us to execute Mom's Will and complete Mom's Succession so that the home and Mom's CDs, and the vehicle, could be transferred 100% into Dad's name. We are also updating all of Dad's estate planning legal documents because he wanted to change how things would be disbursed upon his death.
  7. Plan For Two Children. Now working with a gentleman who contact me after "watching some of my videos and reading some of my blog posts online." He has a rather large estate, much of it in real estate, and he wants to make sure that it goes to his two children the right way and he wants it to be easy for his two children to inherit the property. We also had some discussions about capital gains tax and estate tax to make sure that his children would avoid as much tax as possible as this property gets transitioned to the next generation.

While many people think that estate planning is the same for everyone, you can see from reading these seven examples that every family and every individual has a unique situation that requires unique solutions. If you have an estate that you want to protect for your family, feel free to give my office a call at 866-491-3884 to start a conversation about the easiest ways to protect what you have for your loved ones.

Paul Rabalais

 

Surviving Wife Needs To Complete Husband's Succession and Wants Children To Avoid Probate

I am currently working with a woman from Baton Rouge. One of her children lives in New Orleans and the other lives in Washington. One of her friends mentioned my name to her so she came in to get all of her estate matters settled. She mentioned that her main concern was she wanted to make things easy for her children when she dies - she does not want them to have to pay lots of taxes or go through a bunch of bureaucratic red tape in order to inherit her assets.

Her biggest concern was the family farm which she owned in state outside of Louisiana. She told me that her husband had passed away a few years earlier. I asked her if she had completed the Succession of her husband after he died a few years ago. She said she had not.

I knew the first order of business for her was to complete her husband's Succession. I told her that her home could never be sold until her husband's Louisiana Succession was complete. I told her that the home was still titled in the name of both her and her husband, and the Succession would involved us preparing the necessary court pleadings, having all the court documents signed by her and her children, and then filing all of the court documents at the courthouse and asking a judge to sign the necessary court orders ordering that the home be transferred out of her husband's name and into the names of the wife and their children.

She had pulled out what she thought was his last will and testament. It was dated in 1970 but it did not have the necessary signatures on the document, so it was invalid. We are forced to treat the husband's Succession as if he had no Will - intestate. We discussed how she would continue owning her half of their home, and that under the intestate laws, she would inherit the usufruct of her husband's half of the home, and their children would be named the "naked owners" of her husband's half of the home.

Because she wants to make things as easy as she can for her children, she is setting up her own estate legal program so that her children will avoid probate in two different states when she dies. Had she not set things up this way, her children would have been forced to go through both the Louisiana probate after she dies, and also another probate in the state where her farm property is located.

We also discussed her potential nursing home situation. She is fairly convinced that she will never reside in a nursing home, because neither she nor her children want her to be in a nursing home. She has a few dollars that will help her get private care in her home if she needs it. But, like she said, just in case, we titled her property in the right kind of trust so that if she goes into the nursing home in the future, she will not be forced to spend her money and sell the farm to pay for nursing home costs.

It's always rewarding to work with someone who knows that their affairs are in a mess, and work with them so that they have peace of mind to know that everything is in order and matters will be easy for their surviving family members. If you want that feeling that things are all in order, give us a call at 866-491-3884

Do You Treat All Children the Same or Do You Differentiate When You Establish Your Louisiana Estate Planning Program

I was working with a couple recently out of our Baton Rouge office regarding their estate legal program for their family. They have five grown children. As every parent knows, each child is different. They had three children that were successful professional and had the financial maturity and responsibility to manage an inheritance well. But they had two children that, as the couple says, would, “blow their inheritance as soon as they get it. Both of these daughters were unmarried, and the couple was worried that a future boyfriend or husband may want to latch on to the daughters for the wrong reasons in order to “get to their inheritance.”

Children Can't Inherit in a Lump Sum

The couple decided that it would be best for these two daughters, after the couple dies, to receive a monthly distribution from a trust so that these daughters would be “protected from themselves.”  So we discussed the arrangements where two of the “responsible children” would serve as “co-trustees” after the couple passes away, and then the co-trustees would dole out the inheritance to the two daughters monthly instead of in a lump sum. The couple felt really good about how they were protecting their daughters.

But then the question came up, “Do you want to treat all of your children the same way from an inheritance standpoint? Or do you want to treat your two daughters (who will get their inheritance over many years) different from the way you leave the inheritance to the

Treat Children Same or Different?

After much discussion, the couple decided that they did not want to have an estate legal program that treats each child differently, even though the children have different needs and are at different financial maturity levels. The wife stated, “You know Mr. Rabalais, it’s just not right to restrict certain children from getting their inheritance all at once while leaving other children the freedom to have their inheritance immediately. Let’s treat all of our five children the same way so that they all get an income stream over their lifetime. That’s the right thing to do for OUR family.”

When you have certain children who would benefit from having their inheritance set up a “special” way, you have a decision to make. Do you treat all of your children exactly the same way from an inheritance standpoint, or do you restrict certain children from receiving their inheritance at once, but allow others to have theirs. There is no right or wrong decision here – it’s a personal decision on your part based on your background, relationships, observations, and personal feelings that you have toward your family.

Establish Your Louisiana Estate Planning Program

Our job at Rabalais Estate Planning is to take our decades of experience helping Louisiana families provide for the right kind of disposition to their family while avoiding difficulty, taxes, and family conflict. When you are ready to have a conversation about how to leave what you have to your family the right way, give us a call at 866-491-3884. Look forward to speaking with you.

 

5 Questions That Were Answered At My Estate Planning Presentation Today

I gave an estate planning presentation today at my favorite breakfast place nearby in Prairieville, Louisiana. Their hashed browns and biscuits are to die for - no pun intended since I was discussing estate planning.

There was one woman there who said that for the last 30 years, she had been clipping different articles about estate planning and keeping them in a sack. She presented several questions to me before we even started the breakfast event this morning. Fortunately, I wrote her questions down as she asked me. The questions she asked me were the following:

  1. Does forced heirship still exist in Louisiana? Hint: She mentioned all of her children were over the age of 50.
  2. Is Louisiana a community property state?
  3. Is it better to have joint investment accounts or to name a beneficiary on the accounts?
  4. When you put your assets in a trust, do you give up control over the assets?
  5. What's the difference between a Living Will and a Living Trust?

My 45 minute estate planning presentation addressed most of these questions that she had. The ones that my presentation did not address, I addressed specifically after we finished the presentation.

One other note she mentioned. She said she was really worried that she did not have a deed to her home property in Ascension Parish. She said that her mother had given her and her husband the land many years ago, and then she and her husband built their home on the land. I told her that she can rest easy because there is no such thing as a deed in Louisiana. As long as the Donation from her mother to her and her husband was recorded in the Ascension Parish property records, then she and her husband were the owners of the land and the home that was subsequently built on the land. Her husband indicated that the property tax notice comes in their name every year, so obviously, the property had been put in their names correctly.

I look forward to seeing this couple in our office in a couple of weeks as we set up an estate legal program that will protect them, their children, and their grandchildren. She said that their main goal as they establish an estate legal program was to provide something for each of their seven grandchildren. I look forward to working with them.

Own a Business and Owe Estate Tax? Pay the Estate Tax in Installments: Section 6166 Election

Several of our estate planning clients own businesses in Louisiana (or elsewhere). Some of these business owners have an estate that will require estate tax to be paid when they die. Many business owners are told that "half of their estate will go to the government when they die" so they must take drastic action today to somehow reduce that tax.

What many people don't know is that there are breaks in our Internal Revenue Code which permits certain estates to pay the estate tax liability over a period of 14 years - if they qualify for it because they own a closely held business.

Generally speaking, if a business owner dies and the value of his ownership interest in his or her business exceeds 35% of his adjusted gross estate, then the executor is allowed a 14 year period to pay estate tax attributable to an estate's interest in a closely held business. The estate may pay interest only payments for the first four years, and the taxes can then be paid over a 10 year period.

Here's an example that would not occur in real life but it shows how this election can help an estate. Let's say that Fred owns Fred's construction company. This is the only asset in Fred's estate. The business is worth $10.45 million. Fred is told by some that half of his estate will go to the government when he dies. This concerns Fred because there is not $5.225 million in liquidity in his estate to pay this tax and Fred worries that his children will lose the business.

But the Fred realizes that his estate could make a Section 6166 election timely after Fred dies. First, the estate tax must be calculated. Since there is a $5.45 million exemption, and a 40% estate tax on the balance, Fred figures there would be $2 million in tax - still a big worry to Fred. But if his estate makes the timely IRS Section 6166 election after he dies, his estate can pay interest only payments of $40,000 for four years after Fred dies, and then his estate can $200,000 annually for another 10 years. Fred now realizes that his business will produce enough revenue annually to pay this tax over the 14 year period, and his children will not lose the business due to estate tax liabilities.

If you are a business owner in Louisiana, whether your business is in Baton Rouge, Lafayette, New Orleans, Lake Charles, Shreveport, or Monroe, and you want to make sure that your estate passes intact to your family or other heirs, you may want to give my office a call at 866-491-3884, and tell our great staff that you own a valuable business and you want to speak to me to find out how to leave it the right way, I look forward to the opportunity to speak with you about how the IRS Section 6166 election for owners of closely held businesses can help your family, or how other little-known tax elections can help your family.

Fun Times at Estate Planning Luncheon Presentation in Madisonville

Wow! What a great crowd today at the lunch presentation that I gave today in Madisonville, Louisiana. We had future estate planning clients from Madisonville, Slidell, Mandeville, Covington, and Hammond in attendance. Virtually all of these fine folks will be meeting with me in the next couple of weeks at our estate planning law firm's office in Mandeville, Louisiana.

Here are a few issues that were brought up to me by the audience that I will be addressing with these fine Louisiana families as we work through establishing an estate legal program for them.

  1. Family Home. One person in attendance wants to make sure that his daughter inherit the right to live in the home when he dies, but when the daughter later dies, he wants his four grandchildren to own the home. He wants to make sure that his daughter's husband doesn't inherit the home.
  2. Owner Financed Home. Another gentleman financed the sale of one of his homes to his daughter. Now, the daughter is not making the payments on the home. So, the gentleman wants to make sure that the daughter does not take advantage of this when he dies.
  3. Six Children and 19 Grandchildren. One couple I'll be helping talked about making things easy when they die for their family. While they have considered leaving an inheritance to the grandchildren, they appear to have settled in on leaving their estate to their six children, and then letting the six children provide for their children.
  4. Blended Family. One other couple we will be helping married about seven years ago. They each have children. The children all get along well with each other, and the couple wants an estate planning program that can keep the family relationships strong even after the couple passes away.
  5. Wants To Trash the Handwritten Will. One couple realized that they want to get rid of the handwritten Wills they made in favor of having an entire estate legal program that avoids probate and makes matters easier for each other and their children.
  6. Avoid Nursing Home Poverty. One woman said her biggest worry is that she would hate to sell all of her assets depleted if she had to reside in a nursing home in the future. She said she was pleased to realize there was a way to set things up in a way that her home and her savings would be preserved for her and her family.
  7. No children. One couple with no children wants to have plan that keeps their options open in case the surviving spouse needs to move into a retirement village.
  8. Trust Account at Credit Union. We answered one question that enabled a family to set up a revocable living trust credit union account so that the account will never be frozen, even when the people who set up the account pass away.

As you can tell, there was a variety of estate planning legal issues that were brought up today at the presentation. I look forward to the opportunity help all of these fine Louisiana families put their estate legal affairs in order.

With our Louisiana estate planning law firm's offices positioned in Baton Rouge, Lafayette, Lake Charles, Metairie and Mandeville (with more to come later), we look forward to helping Louisiana families have peace of mind that comes from working with the right attorney to put your estate plan in order the right way the first time.

A Situation Where Life Insurance DOES Go Through Probate

Example. Kirk and Lisa wanted to make their estate settlement simple for each other and for their three children. Knowing that assets in a revocable trust avoid probate, they created a trust and transferred their stock, home, LLCs into their trust. Kirk and Lisa "heard" that life insurance avoid probate because it's paid to the beneficiary. Kirk died. The insurance company immediately tells Lisa that the insurance company needs a probate court order. Why?

Many years ago, insurance agents would sell life insurance to a married couple. Because the insurance agent believed there would be some estate tax savings, the insurance agent wrote the insurance applications in a way that the husband would "own" the life insurance policy on the life of the wife, and the wife would "own" the policy on the life of the husband.

So, when Kirk died, it was determined that Kirk "owned" the policy on Lisa's life. When Lisa dies, the death benefit will be payable to Kirk (or Kirk's estate). In either case, Kirk's probate is necessary to collect the death benefit when Lisa dies. In addition, if the policy that Kirk owns has cash value, Lisa will not be able to access this cash value into the policy ownership gets transferred in a court proceeding.

Had they transferred their life insurance policy to their trust during Kirk's lifetime, the probate would not have been necessary. After Kirk died, Lisa, as the sole trustee, would be able to access cash value or change the beneficiary. But since they "assumed" that life insurance avoided probate, they ended up being required to complete Kirk's probate to "fix" the life insurance problem, even though all of their remaining assets avoided probate.