Louisiana Probate

What Does "Asset Protection" REALLY Mean?

In this post we dig a little deeper about who wants to protect their assets and their estate from losing their estate to (1) nursing home expenses; (2) a lawsuit; and (3) government intervention.

People often call our office or request to discuss with me how they can "protect their assets." But different people, in different circumstances, have different ideas regarding what they want to protect their estates FROM.

One group of people asks me about how to protect their estate from long term care expenses. Perhaps they are 65 or older, and they have seen family members and friends be forced to deplete their estate, and even lose their home, sue to the costs they must pay to reside in a nursing home.

When we engage in a conversation about Long Term Care Medicaid eligibility, we have to take an in depth look at an individual's, or couple's, assets, monthly income, health, age, and the different rules that apply. Often we make some determination regarding what assets should remain in the individual or couple's name, and what assets, perhaps, should be transferred to some form of a trust. Not that the traditional "avoid probate" revocable living trust does NOT provide much in the way of protection from nursing home expenses. Also note that this form of "asset protection" is most effective when transacted at least five years before entering a nursing home.

The second theme of asset protection involves protecting assets you own in the event you get successfully sued. Sometimes people contact us and they are a nervous wreck because "something happened," (maybe the threat of a lawsuit, maybe an automobile accident where you were determined at fault, maybe someone injured on real estate you own, or maybe you have a serious illness and you are worried about the millions of dollars of potential health care expenses).

Two common obstacles I've seen to this kind of asset protection are: (1) People do not want to give up the control over what they own; or (2) people don't engage in this kind of asset protection until it is too late - whereby action could be later undone due to the rules on fraudulent conveyances and the intent to defraud creditors.

The third category of asset protection requests comes from those who, in general, want to protect their estate from "the government." When I ask follow-up questions and dig deeper, they often want to protect their estate from the various forms of taxation, and they want to keep their estate out of probate (the court system).

The solutions for these three categories of asset protection vary based on the appropriate set of laws, rules, and regulations that apply to your situation, and the solutions vary based on your particular financial and estate situation.

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

Which revocable or irrevocable trusts allow you protection from the dreaded nursing home expenses?

"Do revocable or irrevocable trusts help qualify for Long Term Care Medicaid?"

That is the question we often get from clients and prospective clients who are concerned that they will lose their savings and home if they wind up in a nursing home facility.

There are many different kinds of trusts, but often people tend to break them down into two types: revocable and irrevocable.

Regarding revocable trusts, the Louisiana Medicaid Eligibility Manual could not be much clearer, "The entire corpus of a revocable trust is counted as an available resource to the individual."

Revocable trusts have never been used to protect assets from nursing home expenses. Revocable trusts are, however, used extensively for Succession / Probate avoidance purposes. And quite frankly, when the revocable living trust works like it should, it's a wonderful thing for the survivors of the person who set up the trust. When the person who set up the trust (Settlor) dies, the Successor Trustee (often a family member) can immediately disburse assets to the trust beneficiaries (often the children) without any of the attorney and court involvement, expense, and delay associated with a court-supervised probate process.

Regarding irrevocable trusts, it is important to note that not every irrevocable trust offers nursing home protection and Medicaid eligibility. An important provision in the Louisiana Medicaid Eligibility Manual provides, in pertinent part, that, "The portion of the corpus that could be paid to or for the benefit of the individual is treated as a resource available to the individual..."

There are several other factors that affect Medicaid eligibility when someone has established an irrevocable trust, but clearly of the trustee can pay corpus to or for the individual seeking Medicaid eligibility, then the trust assets will need to be spent prior to eligibility.

Some parents, in order to protect assets, establish an irrevocable trust and provide in the trust instrument that a trustee may make distributions to or for the children of the Settlor of the trust.

Here's my words of warning regarding Medicaid eligibility. Seek out good legal help in your area. Medicaid is a combined state and federal program, so you must work with someone who is well-versed in your state's eligibility provisions. Don't try this at home on your own. Get it right the first time.

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

If You Have a Revocable Living Trust, Then Why Do You Need a Last Will and Testament?

If you have a Revocable Living Trust, do you need a Last Will and Testament?

When someone dies with assets in their name, like real estate, or interests in a business, or investments, those assets will be frozen when they die, even if they have a Will disposing of them, and their survivors are stuck hiring lawyers and all will go through a court process commonly referred to as probate, or in Louisiana, a Succession.

Many people, in an effort to simplify their estate settlement and avoid the court process, often create a revocable living trust, and they transfer title of their assets to their trust while they are alive, so that when they pass away, the court process is avoided because assets in a trust bypass the whole “settle your estate through the court system” process. You simply designate a Successor Trustee of your trust who can immediately sell or disburse assets from your trust to your trust beneficiaries, all outside of government supervision.

Your trust replaces the Will because the trust instrument governs who gets what as it relates to trust assets.

But even if you establish your revocable living trust, you still need to have a Will just in case assets are in your name when you die. Maybe you left something out of trust. Perhaps you acquired an asset or account in your name after you established your trust, and you forgot to title it in the name of your trust.

Someone who utilizes a revocable living trust often has a last will that is often referred to as their “pour-over” Will because it pours over the assets in your name at your death to your trust. It is there only as a "catch-all" to cover assets that should have been, but were not for some reason, put in your trust before you died.

Now, your pour-over Will may never be used because everything you have either has a beneficiary designation, is titled in the name of your trust when you die, or survivors will somehow have access to the asset upon your death.

So, in summary, if you have a revocable living trust that is designed to avoid probate and provide for the distribution of your estate when you die, you’ll also have a Will, but your Will may never need to be used because the Will is there as a "catch-all" to allow for the transfer of assets that are in your name when you die and require a probate to access.

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

Why You Don't Need a Death Certificate to Begin the Louisiana Succession

Here's the typical situation: Survivors of the deceased wait to schedule something with the estate attorney until after the family receives the death certifcates - which always takes either weeks or months to come in. Finally, they sit down with the estate attorney, like myself, and say something like, "Well, before we get started, let me give you a death certificate because I know you will be needing this. Do you want an original or copy?"

Then, I respond to their dismay, "I don't need one."

Death certificates are not typically filed at the courthouse as part of the Louisiana Succession process. While the judge needs proof that the deceased actually died, along with information about whether they were married, where they lived, when the deceased died, and whether they had children, the judge does not need to see a death certificate. These facts are typically evidenced, or proven, by affidavits.

Typically, instead of filing death certificates at the courthouse, two people who have knowledge of the above mentioned facts each sign what is commonly referred to as an, "Affidavit of Death, Domicile, and Heirship."

The statement we often hear from survivors that "It won't do any good to see the attorney because we don't have death certificates yet," is inaccurate. Waiting weeks or months to get the death certificates is unnecessary waiting.

What do you need to get started on the Louisiana Probate (also known as "Succession")? You need the original Will, if one exists, and you need two people familiar with the family circumstances (such as a surviving spouse or adult children) to sign the appropriate Affidavits of Death, Domicile, and Heirship."

In addition, if you can compile a list of assets and debts of the deceased as of the date of death, that would be helpful, but this detailed information typically is needed later, not at the very beginning.

The family WILL need death certificates to, for example, have the executor open an estate account after the judge confirms the executor (or appoints an administrator). And after the judge signs the final Judgment of Possession, which orders third parties to transfer assets to heirs, the heirs will need a death certificate, with this Judgment, before the financial institution will release the funds or investments to the heirs listed in this Judgment.

Since delays are one of the main complaints about probate, it makes sense to meet with the attorney and get started on this process as soon as practical after the death of a loved one, rather than delaying until you receive death certificates, which can take weeks or months to arrive.

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

Five Reasons Louisiana Residents Take Advantage of the Legal Services of an Estate Planning Attorney

The following are five reasons that Louisiana residents (and anyone for that matter) take advantage of the services of an estate planning lawyer:

1. Protect your Children's Inheritance from Their Divorces. Yes, the moment your children inherit from you, the inheritance is separate property. But if they commingle the inheritance (accidentally or intentionally), the inheritance becomes community property. Then, when your child later divorces, your child loses half the inheritance. You can proactively take legal steps to ensure that your child's inheritance will always be your child's inheritance.

2. Avoid Probate. When you leave assets to your survivors through your Last Will and Testament, your survivors will be required to hire attorneys and go through what many perceive to be an expensive, time-consuming, and inefficient court-supervised probate/Succession procedure to gain access to your estate assets. You can proactively arrange an estate legal program to enable your loved ones to receive your estate without having to be burdened by these court procedures.

3. Protect Assets from Long Term Care Costs. If you must enter a nursing home with assets in your name, you will be forced to deplete those assets on your long term care expenses until you are left with less than $2,000 in your name. You can take actions ahead of time to protect them but stay in control of them. This is a huge problem for the middle class that most don't address until it's too late.

4. Put the Right People in Charge. Absent your direction, a judge will select someone to handle your finances, make your medical decisions, and oversee the distribution of your estate. You will want to control who makes the decisions when you are no longer able to make them for yourself.

5. Avoid Taxes. Most estates avoid the 40% estate tax, but virtually every family faces income and capital gains tax consequences when family assets are transitioned from one generation to the next. You can be proactive and minimize these tax burdens for your family.

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

Pros and Cons of Leaving Everything to Your Spouse

When married couples engage in estate planning, one of the questions they often are required to answer is, "If I die before my spouse, do I want to leave complete ownership and control of my estate to my spouse?" Or, "Do I want to leave my estate to my spouse in a way that my children (or other heirs) are protected?"

Leaving all of your assets to your spouse is pretty easy to understand - when you die, your spouse owns everything. Maybe you are thinking that it is ok to leave everything to your spouse because you are confident that when your spouse dies, your spouse will leave it all to your kids. Or maybe you like the thought of leaving your estate to your spouse because your descendants circumstances may change after you die and you want your spouse to be able to leave the estate to your descendants the right way.

However, if you leave your estate to your spouse, your spouse "could" leave your estate to people other than your children, like your spouse's next spouse!

Some people want to leave their estate to their spouse in a way that their children or heirs are protected. The two common ways to do this are (1) in trust; and (2) via the Louisiana usufruct.

Leaving your estate to your spouse may be the best overall tax outcome, but it used to be the worst. In the old days, it did not make sense to leave your estate to your spouse because when you lumped your estate on top of your spouse's estate, it caused the spouse's estate to be subject to a 50% or more federal estate tax upon the death of the surviving spouse. But now, with an $11.4 million estate tax inclusion, and with portability (making it easier for married couples to exempt $22.8 million from the estate tax), rarely are couples penalized for leaving everything to each other.

The tax benefit that often results from leaving your estate to your spouse is that your heirs will benefit from a "double step up" in basis, for capital gains tax purposes. In community property states (like Louisiana) all community property gets a new stepped-up basis when the first spouse dies. And when you leave all of your assets to your spouse, all of the assets will get another step-up in basis when your spouse later dies. This can save considerable capital gains tax when assets are later sold, particularly if there is appreciation that occurs from the date of death of the first spouse to the date of death of the surviving spouse.

In addition, if you live in Louisiana, you are prohibited from leaving your entire estate to your spouse if you have forced heirs. Forced heirs are children of your that, at the time of your death, are 23 years of age or younger, or, are of any age but incapacitated.

Leaving assets to the surviving spouse is common for traditional families - one marriage and all children are from the one marriage. And if you really want to make it as simple as possible on your spouse when you pass away, consider establishing a revocable living trust and titling the appropriate assets in your trust. Assets in your living trust don't go through the court-supervised probate/Succession procedure, so having your assets in your living trust will prevent your spouse from having to hire lawyers and go through the courts just to get ownership of your assets after you die.

Other factors that are typically discussed when married couples engage in estate planning legal services include: who makes your decisions when you are incapable; protecting assets from long term care costs; and how will assets be managed and disbursed after both spouses pass away. These are all important components of any estate planning legal program.

Note also that if you have no legal plans in place, Louisiana laws won't do your spouse any favors. These laws will favor your descendants much more than your spouse.

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

Should You Have a Will or Living Trust?

When people put their legal affairs in order, they have a decision to make. One of the questions they have to answer is, “ Should I use a Last Will and Testament (“Will”) as the legal instrument to pass along my estate to my heirs, or should I use a Revocable Living Trust (“Living Trust”)?

Let’s start with the basics. If you use a Will to pass your estate to your survivors, you’ll like have provisions leaving your estate, or parts of it, to your spouse, your children or others, or perhaps even leaving assets to a trust the terms of which are part of your Will (called a “testamentary trust”) that will be established with assets after your death.

With a “Will Plan,” you leave title to all your assets in your name: your home, your other real estate, your investments, and so forth. When you die, your assets are frozen (even though you had a Will), and your survivors must retain an attorney or attorneys to go through the court-supervised process of transferring assets to the people who are named in your Will.

If you have a Living Trust, your Living Trust will be prepared, for example, so that after you pass away, your trust provides that your estate, or parts of it, are to be transferred from your trust to your spouse, your children or others, or assets may remain in trust for the benefit of minors, irresponsible heirs, or heirs who are receiving government benefits so that they should not inherit assets in their name. When you establish your Living Trust, you will likely work with your estate attorney to transfer title of assets to your trust, such as your home, other real estate, investments, and so forth.

When you die, trust assets are not frozen. Attorneys and the court system do not have to get involved in the trust settlement because the court system only governs assets that are titled in your name when you die. In your Living Trust, you designated a Successor Trustee or Co-Trustees who will have immediate authority to transfer assets from your trust. Many people perceive it that their Living Trust replaces the Will.

So, which program should you have? It’s ultimately your decision, and some people make decisions like this based on their prior life experiences. Will clients often tell us something like, “When my mother died 12 years ago, I don’t remember her probate being too difficult. We had to do the probate to get the house in our names, but we were not in a big hurry.”

We hear from some Will clients the something like the following, “I don’t have any children so if my distant relatives and favorite charities named in my Will have to go through probate, so be it…I’ll be dead.”

Trust clients often tell us something like, “When my father died, his probate took years and it was difficult and expensive, and I don’t want my kids to go through that, so let’s set up a Living Trust.”

We’ll also hear, “My spouse and I want to make things as easy as we can on the surviving spouse when one of us passes, so let’s establish a Trust.”

Other Living Trust clients say, “If my spouse and I can establish a Living Trust and avoid the future delays and expenses of two probates (one when each of us dies), then a Living Trust seems like a no-brainer.”

And other Living Trust clients tell us, “We pre-arranged our funerals to make things as easy on our survivors and we’d like to do the same kind of pre-planning and pre-arrangements for our estate.”

Now, if you go the Living Trust route, make sure you watch my popular YouTube video titled, “If You Have a Revocable Living Trust, Watch This Now,” which address the important topic of trust funding.

Bottom line or Will vs. Living Trust? Take action. Talk to an estate attorney. Hopefully the attorney’s own biases don’t preclude you from making an informed decision. But get started. Failing to act puts the government in complete control of your estate, and who wants that?

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

What Legal Matters to Address When Loved One Dies Unexpectedly

This post describes what estate legal issues typically get addressed after the unexpected death of a loved one.

Many people pass away after a long life due to natural causes, or they pass away after a prolonged illness. The death does not come as a shock or surprise to survivors, and the legal affairs are often in order with trusted loved ones having access to all of the estate information.

However, sometimes death comes completely unexpected, perhaps due to a medical issue (for example, a heart attack) or due to some type of accident. When this happens, questions often instantly arise among the survivors. Questions like:

Did he have his legal affairs in order?

Did she have a will or a trust?

How do we cover funeral expenses?

What did the deceased own and owe?

How will income taxes be handled?

What happens to all personal effects?

How do we deal with the deceased's business?

How do the monthly bills keep getting paid?

Who is responsible for dealing with all of this?

All of these questions that survivors have often lead to a statement, "We need to talk to an estate lawyer."

Perhaps the best reason to talk to an estate settlement lawyer sooner rather than later is because there is so much uncertainty that can be eliminated by talking to an estate attorney that can quickly map out a suggested plan of action to deal with the various estate issues involved.

If you are in this circumstance, make sure you quickly locate the last will and testament or trust of the deceased - the last will needs to be filed at the courthouse.

Although every estate settlement is unique, it often helps when all of the "parties" gather together for a meeting with the estate attorney. The "parties" will include the executor that is named in a will, along with all of the people who will inherit from the deceased.

These parties often have questions and they may be nervous that estate issues will be handled improperly. However, when all of the parties get together with an estate attorney who can lay out a plan for getting all matters addressed, the parties often start gaining peace of mind. When the parties know that communication will flow freely, and there will be transparency throughout the estate settlement process, heirs start to let their guard down because they know that their rights are going to be preserved. It's usually the failure to communicate, and the uncertainty from the failure to communicate, the causes heirs to lose trust in one another, and then relationships get damaged - often permanently.

Even though every estate settlement is different, most start with the family producing the last will and testament, and then the estate attorney prepares and files the necessary court pleading at the courthouse, to get the executor "confirmed." If no last will and testament exists, then the court will often appoint an "administrator" to handle the things that an executor would have handled if an executor was named in a will.

Once the executor is confirmed by a judge, or an administrator appointed by a judge, then that personal representative can gain access to information from third parties regarding estate details, and the personal representative can open an estate account and get access to the deceased's previously frozen accounts.

From there, a good estate attorney will develop a good short and long term plan for dealing with the various estate issues, and few surprises will surface during the process because a good estate settlement plan was created from the get-go.

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

Banks and Brokerage Firms: We Hardly Use Letters Testamentary These Days

After a Louisiana resident passes away, a surviving loved one often goes to the deceased's bank, credit union, or brokerage firm, in an effort to settle the estate of their loved one. The financial institution promptly responds by saying something like, "Your loved one's accounts at this financial institution are all frozen. You must bring back "Letters Testamentary" or "Letters of Administration" in order to gain access to funds.

These days, the financial institutions are asking for the wrong things. They should be requesting "Letters of Independent Executorship" or "Letters of Independent Administration."

Since 2001, Louisiana has authorized the independent administration of estates - less court supervision. Virtually all Wills written since 2001 authorize this procedure. And if a Will does not authorize it, then the heirs can agree to operate under this independent administration procedure.

After a death, when the family gets the executor confirmed, and if the executor is acting as an independent executor (which is the case in an overwhelming majority of Successions), the court does not issue "Letters Testamentary." The court issues "Letters of Independent Executorship."

So the bank requests Letters Testamentary, and then we have to tell them that we will not give them what the bank is requesting. We will give them Letters of Independent Executorship.

It would be easier on everyone if the financial institution tells the survivors of its clients and customers that they can bring in the Letters of Independent Executorship to gain access to the funds of the deceased.

To some, this may seem to be a trivial matter. But when we deal with so many confused survivors, anything the legal and financial industries can do to help those in need at a difficult time would make everyone's job easier. Just my two cents.

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

How To Amend or Modify a Revocable Living Trust

It is common for people, as part of the estate planning process, to establish a revocable living trust to provide for the disposition of trust assets outside of probate. Occasionally, people who previously established a revocable living trust want to amend or modify or revoke their trust.

Reasons why people would amend their revocable living trust include someone wanting to change the beneficiaries of their trust; someone wanting to amend how a beneficiary receives his or her portion or share; or perhaps changing the name of the Successor Trustee who is in charge of administering the trust after the death of the Settlor (the person who established the trust).

So, how do you amend or revoke your trust? Well, you must first look to the state law of the state that governs the trust instrument. The following is an overview of the Louisiana law applicable to modifying or revoking a trust.

What you should never do is pull out a pen and pencil and start marking on your trust. None of this will be valid. Most trust amendments or revocations in Louisiana are done by authentic act. An authentic act, generally, is a writing executed before a notary public and two witnesses, and signed by the person amending their trust, the witnesses, and the notary. Most trust amendments are done this way.

The Louisiana Trust Code also provides for modifying a trust by act under private signature, and also by testament. Even though Louisiana law provides for three different ways to modify a trust, most amendments are done through an authentic act.

Bottom line - don't try to amend or revoke a will or trust without getting some legal help from an estate attorney. Different rules apply to wills and trusts, and you must work with an attorney who understands all of this and helps you get it right the first time - there is too much at stake.

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

Don't Handwrite Changes on Your Last Will and Testament

I've seen many people over the years want to make changes to their existing last will and testament. Without knowing any better, they pull out their existing will, grab pen or pencil, and cross through the things they want to change while writing in replacement provisions.

For example, someone may want to change their executor. They feel that the previous executor they named (let's call him "Joe") is now a bum, and they want to replace Joe with Fred.

Or, let's say a Will provides a specific bequest either to an individual or charity of $100,000. But the testator now wants to change that bequest to $5,000.

There are a couple of Louisiana laws that are in play here. First, Louisiana law provides, in pertinent part, that a revocation of a testamentary provision occurs when the testator clearly revokes the provision or legacy by a signed writing on the testament itself.

So, the Louisiana rules are somewhat relaxed to permit the revocation of a provision in a last will by a signed writing that is not dated but which clearly revokes the provision.

However, regarding a replacement provision, the formalities are more stringent. Louisiana law provides that, "Any other modification of a testament must be in one of the forms prescribed for testaments.

Example: A woman pulls out her old will naming Joe as the executor. She scratches through Joe's name, writes in Fred's name, and signs the change. The result would be that Joe is no longer the executor because she revoked the provision by a signed writing, but Fred will not be the executor, because this modification is not in one of the forms prescribed for testaments - it does not meet the formality requirements of an olographic testament because it is not dated.

Be very careful when you attempt to change your Will. Your safest bet is to work with an attorney who understands the rules as they relate to revocations and modifications of testaments.

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

What If Heir Refuses To Accept Inheritance Of Money or Item?

Occasionally, for unfortunate emotional or relationship issues, there is an heir of an estate who refuses to accept either the inheritance of money or the inheritance of a specific item. This can cause the probate or Succession to come to a screaching halt, causing delays and expense for everyone involved.

While it is not uncommon for an heir to formally "disclaim" an inheritance for a variety of reasons, such as income, gift, or estate tax reasons, it is uncommon for someone to fail to communicate even though a small amount of communication could result in a financial windfall for the individual.

Louisiana Succession law has a procedure to address this. If an heir refuses to accept and sign a receipt for an inheritance of funds, then, after a hearing, the court may order an executor to deposit the funds in either a state or national bank, or in the registry of the court to the credit of the person entitled to the funds. A receipt showing the court that the deposit was made is sufficient to allow the executor to be discharged.

If an heir refuses to receive an item (called in Louisiana, a "corporeal movable"), then the court may direct the executor to make some other disposition of the item.

It is worth noting that this same thing can happen when a trust beneficiary refuses to accept a distribution of trust principal. While our trust code does not specifically address this issue, it would make sense that these funds sit in a trust account for the benefit of the refusing beneficiary, or perhaps the trustee could petition the proper court for some direction.

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

Transfer on Death (TOD) and Joint Tenants with Rights of Survivorship (JTWROS) Designations Not Recognized in Louisiana

Many Louisiana residents get confused because they are under the assumption that they can name beneficiaries on their non-retirement accounts at their investment company - but they can't.

Example. Mom and Dad have three accounts at the investment company. Dad owns a traditional IRA. Mom owns a traditional IRA. And they have a joint investment account. They come into the law office to discuss how to leave assets to each other and their family outside of probate and they are convinced that they have named beneficiaries on all of their investment accounts. They later discover that they were only permitted to designate beneficiaries on their IRAs, but not their joint investment account. While other states permit probate avoidance designations on investment accounts, like Transfer on Death (TOD) and Joint Tenants With Rights of Survivorship (JTWROS), these designations are not recognized for Louisiana residents and investment companies do not permit their Louisiana customers to make these designations.

The following are a few examples of large investment companies that realize that the State of Louisiana does not recognize these designations, and thus, state so in their paperwork:

(1) Edward Jones Transfer on Death Agreement. "This Agreement shall not be valid and shall be of no effect in the State of Louisiana." https://www.edwardjones.com/images/transfer-on-death-agreement.pdf

(2) Merrill Lynch Joint Account Agreement. "JTWROS: Joint Tenancy with Right of Survivorship (not available for Louisiana residents)." https://olui2.fs.ml.com/Publish/Content/application/pdf/GWMOL/Joint_Account_Tenancy_Agreement_-_1277.pdf

(3) Merrill Lynch TOD Agreement. Transfer On Death Accounts are available to Account Owners (defined below) who reside in all states within the United States (other than Louisiana)." https://olui2.fs.ml.com/publish/content/application/pdf/GWMOL/TransferOnDeathAgreement.pdf

(4) T Rowe Price TOD Agreement. "TOD is not recognized by the state of Louisiana, so we do not offer TOD for Louisiana residents." https://individual.troweprice.com/Retail/Shared/PDFs/todreg.pdf?src=AccountFinder

(5) Charles Schwab Designated Beneficiary Plan Agreement. "The Plan is not available in Louisiana." https://www.schwab.com/public/file/P-831898/APP10780-16-ADA_-_5_19_2017.pdf

A related issue affects Louisiana bank account holders who make a POD (Payable on Death) Designation. Louisiana banking laws simply release banks from liability to heirs or the estate for paying a beneficiary in accordance with the POD Designation. But if the account owner has different heirs pursuant to a Will or Trust, the POD beneficiary may be accountable to those funds they received.

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

What Is a "Pour-Over" Will?

Generally, people who establish an estate planning legal program either establish a Will-based estate plan or a Trust-based estate plan. When someone establishes a Trust-based plan, often one of the goals is to have assets titled in the name of the trust at death so that those assets can be distributed immediately to the trust beneficiaries without going through the Louisiana Succession, and its inherent delays, expenses, and aggravations.

People often ask, "If I have a trust, do I need a Will." Well, a pour over will is used in conjunction with a trust based plan. The purpose of the pour over will is to serve as a safety net. If, either intentionally or unintentionally, assets at death are titled in the name of the person who established the trust, then the probate proceeding will be necessary to pour-over those individually owned assets into the trust. 

Often, the ideal scenario is to have all assets titled correctly so that, at death, there are no "probate assets" in the individual's name, and the pour-over Will does not even need to be used. But the pour-over will is prepared and signed in virtually every instance where there is a trust-based plan.

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

How To Get an Executor of a Succession Confirmed

The purpose of this post is to walk you through the detailed steps of getting an executor of a Louisiana Succession confirmed. Once confirmed by the court, the executor can then access accounts of the decedent, sell Succession assets, and have other powers that enable the executor to start the process of settling an estate.

Just being named as an executor in a Will does not give the named executor the authority to act. They must first go through the process of getting confirmed by a court. The following are the steps to getting an executor confirmed:

(1) Must have the original last will and testament - the one that was actually signed. The will names the executor.

(2) A petition to probate the Will and ask the judge to confirm the executor.

(3) The executor will sign a Verification of the above-mentioned Petition.

(4) Two people who knew the deceased will each sign an Affidavit of Death, Domicile, and Heirship. This proves to a judge that the deceased died and that he had a Will and whether the deceased had forced heirs.

(5) The executor signs an Oath that they will faithfully perform their duties as executor.

(6) We will prepare and file and submit the court order that we want the judge to sign confirming that the executor has been confirmed.

(7) We will prepare Letters of Independent Executorship. The clerk of court will make several certified copies. The executor needs certified copies of these Letters to move frozen financial accounts into an estate account.

(8) We have the named executor sign an Application for Tax ID Number. This number is necessary so that the executor can open an estate account.

So we file all the court pleadings and we wait - often a few weeks - for the court pleadings to be processed. We get it back and get certified copies of the Letters to the newly confirmed executor. And we are off and running.

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