Louisiana Succession

Value Estate Assets High or Low After Death?

When working with surviving family members after the death of a loved one, the survivors often want my help to help them deploy a strategy to value the assets of the deceased. The survivors often want to know whether estate assets should be valued high or low. I typically tell them that this is not a "game" that they can play, they are bound to have assets valued at "fair market value." Nonetheless, some people feel they can wiggle the values if it benefits them.

Very few estate are subject to the 40% federal estate tax. However, those survivors who face an estate tax typically want to see assets valued as low as reasonable in order to avoid as much of the 40% estate tax as possible.

Survivors of estates that do not have to face the federal estate tax, however, may have the opposite strategy. Since estate assets benefit from the step up in basis, survivors often want estate assets valued as high as reasonably possible in order to get the maximum step-up in basis. 

Certain assets owned by a deceased are not subject to varying fair market values. Cash, bank accounts, and publicly traded securities are easily valued as of the date of death - merely determine the account balances.

Other assets, however, are subject to subjective determinations of fair market value. Land, rental property, other real estate, and ownership interests in a business, are often difficult to value as of the date of death of the owner.

The IRS has a definition of fair market value. The IRS defines fair market value as the amount that which property would change hands between a willing buyer and a willing seller, neither being under any compulsion to buy or sell, with both parties having reasonable knowledge of relevant facts.

Our system is not necessarily set up as a "game" that survivors can play and arbitrarily determine fair market value after their family members die. Nonetheless, when estate tax is an issue, heirs often attempt to encourage appraisers to appraise assets "low." While when estate tax is not an issue, survivors want to see assets assets valued "high" to take maximum advantage of the step-up in basis. And since so few estates are subject to estate tax these days, most estates benefit from the "higher" valuations.

Note that these rules do not apply to IRAs. There is no step up in basis of investments inside an IRA. Any distributions from a traditional IRA are subject to income tax.

Also, some Louisiana residents mistakenly believe that the asset value listed in the Sworn Detailed List of Assets and Liabilities filed in the deceased's Succession proceeding is the end-all, say-all when it comes to estate valuation. But of course the IRS can always question any valuation the family puts on the Sworn Descriptive List.

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

Disclaimer or Renunciation an Effective Post-Death Estate Planning Tool

Sometimes, believe it or not, it makes good tax or legal sense to formally refuse (also known as "disclaim" or "renounce") an inheritance.

Example: Dad dies and leaves assets to Mom. Mom doesn't need the assets and she wants to see the children enjoy their inheritance from their father. Mom might disclaim the inheritance.

Example: Mom dies leaving her estate to her two children. One child decides that he does not need the inheritance and decides to renounce and allow (due to Mom's governing documents) child's children to receive the inheritance. Disclaiming prevents the child from having to accept the inheritance and then give it away pursuant to federal gift tax annual exclusion limits.

Example: A Traditional IRA owner dies. The primary beneficiary decides that it makes more tax sense to disclaim her portion of the IRA and allow the IRA to pass along to the contingent beneficiaries because the taxable required distributions will be smaller to the contingent beneficiaries.

A "Disclaimer" is generally a federal tax term which allows people to formally refuse an inheritance. It prevents someone from having to accept an inheritance, and then donate it away. Particular disclaimer tax rules must be followed, including the requirement that the disclaimer be in writing, within nine months of death, and the disclaimant cannot accept any of the benefits of the disclaimed assets.

Renunciation is the Louisiana term for this. If a renunciation is to take place, it must do so in that window of opportunity after the date of death but before the disclaimant receives any assets or other benefit from an inheritance.

Disclaimer/Renunciation planning should be considered in many estate planning programs, both the post-death opportunities should be explored, and the incorporation of written disclaimer provisions in your governing will or trust legal documents as you put your estate planning legal program into effect.

One area where some get confused is that you cannot renounce an inheritance to get out of paying your debts or to get out of paying for the nursing home. Your creditor may accept your succession rights if you renounce them to the prejudice of your creditor's rights. And the Louisiana Long Term Care Medicaid Manual treats a renunciation as if you accepted the inheritance and then gave it away - triggering penalties for uncompensated transfers of resources.

Again, really important that you work with the right people to set things up the right way, 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

The Louisiana Usufruct: Who is Liable for Repairs?

This post describes who is liable for repairs when someone owns the usufruct of property, while others are naked owners.

It's common in Louisiana for a spouse to leave their surviving spouse the usufruct of property. Here's an example: Wife and Husband marry, each for the second time. They each have children from their prior marriages. Wife owns the home they live in. Wife doesn't want Husband to be homeless if she predeceases him, so she writes a will and leaves Husband the lifetime usufruct of her home, and she names her children (Husband's step-children) as the naked owners of her home.

Wife dies. Husband and Wife's children somehow cooperate enough to complete the Succession. Husband is now living in the home. And let's say the home is 40 years old and in need of constant repair. Who is responsible for these repairs. The usufructuary? The naked owners?

There are several Louisiana laws that address liability for repairs in these circumstances. The general rule is that the usufructuary is responsible for ordinary maintenance and repairs, while the naked owner is responsible for extraordinary repairs, unless the usufructuary's fault or neglect cause the extraordinary repairs to become necessary.

Extraordinary repairs are those for the reconstruction of the whole or a substantial part of the property subject to usufruct. All others are ordinary repairs. As you might imagine, usufructaries will argue that all repairs are extraordinary. Naked owners will argue that all repairs are ordinary. 

During the existence of the usufruct, a naked owner can compel the usufuctuary to make the repairs for which the usufructuary is responsible. 

But the usufructuary may not compel the naked owner to make the extraordinary repairs for which the naked owner is responsible. And if the naked owner refuses to make these extraordinary repairs, the usufructuary may do so, and the usufructuary shall be reimbursed without interest by the naked owner at the end of the usufruct.

If, in the above example, the usufruct does not end until the death of the usufructuary, then the usufructuary's estate will likely seek this reimbursement from the naked owners after the usufructuary dies.

In addition, there are even more rules that address when, for example, a usufructuary abandons his usufruct, or when property has been totally destroyed through accident, but this post should give the basic information you may be looking for regarding the liability for repairs.

Make sure you address these things the right way on the front end so they don't became a disaster on the back end. Work with the right estate planning attorney who will listen to your objectives and suggest the best ways for you to leave a legacy behind - instead of a mess that winds up in court.

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

Collation Explained - Louisiana Estate Planning Law

When someone asks me what "Collation" means, it's typically because they've seen the word referenced in a last will and testament, and they don't know what it means.

This post describes a little history and current application of Louisiana collation law.

Back in the pre-1990's, there was a presumption in Louisiana estate law that parents were supposed to, from an inheritance standpoint, treat their children equally. If a parent made a gift to one child during the parent's lifetime, collation laws required that gift to be considered as an advance on that child's inheritance. 

So, back in the pre-1990's, parents were permitted, in their last will and testament, to dispense their lifetime gifts from collation so that lifetime gifts would not be considered an advance on a child's inheritance.

Then, in the 1990's the Louisiana Collation law changed significantly in a way that reduces the scope and application of collation by limiting the right to demand collation to children who qualify as forced heirs, and collation only applies with respect to gifts made within three years prior to the parent's death.

Now, under collation law, if a child is 24 and not otherwise disabled,  he or she is not permitted to demand collation. And a grandchild is not permitted to demand collation, even if he or she qualifies as a forced heir.

Nonetheless, many attorneys still include a provision in their client's wills stating, in effect, that the client's lifetime gifts are exempt from collation.

I haven't seen or heard anyone around our office discuss a potential collation claim in decades. Collation claims just don't come up much any more due to its limited scope. I suppose, however, it does not hurt to keep the "dispense from collation" provision in Louisiana last wills, even though it causes some confusion because clients have no idea what it means. 

However, now with this post, you know!

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

Deceased Owned Property in Many Parishes: How To Transfer To Heirs in a Succession

This post describes how the real estate of a deceased person, who owned property in multiple Louisiana parishes, gets transferred the right way to the heirs.

We recently started working on a Succession. The deceased lived in Jefferson parish but owned property in several different parishes. He didn't own property in Jefferson Parish, but he owned property in St. Tammany, Tangipahoa, Plaquemines, and St. Landry Parishes. The daughter, who was named the executor of her father's Will, thought she was going to have to travel all around the state to register the children as the new owner of all of their father's property.

I explained the procedure for getting the property transferred as follows:

(1) Succession Opened. The proceeding to open a Succession after someone dies must be brought in the district court of the parish where the deceased was domiciled at the time of his death. In this matter, the deceased was domiciled in Jefferson Parish, even though he did not own a home or other real estate in Jefferson Parish. All court pleadings, petitions, Lists of Assets and Debts, court orders, and all other court documents of the Succession will be filed in the Jefferson Parish Succession Suit record.

(2) Judgment of Possession. At the conclusion of the Succession, the district court judge in Jefferson Parish will sign a court order that we prepare called a Judgment of Possession. We will ensure that all of the various legal descriptions of all of the deceased's different properties around the state are listed on this Judgment of Possession.

(2) Certified Copies of JOP. Once signed, we will request that the clerk of court of Jefferson Parish issue multiple certified copies of this Judgment of Possession (JOP).

(3) Record JOP in Parishes. We will record a certified copy of the JOP in the conveyance records in each parish where the deceased owned real estate. This will show all third parties and title examiners that ownership has been transferred from the deceased to the heirs (or, since there was a Last Will, to the legatees (children)).

In this matter, the deceased also owned real estate in Mississippi. I told the family that the Louisiana Succession would not transfer the Mississippi property. The family must hire another law firm in Mississippi to go through the ancillary probate in Mississippi to transfer the Mississippi property from the deceased to the heirs.

Many people who have property in multiple states transfer those multiple properties to one Living Trust so that no probate proceedings are necessary after the death of the Trust Maker.

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

Powers When Multiple Executors or Trustees are Named

When people establish wills or trusts, they often want to designate more than one executor or more than one trustee. This video describes what it takes to exercise powers when multiple executors or trustees are named in Louisiana. Note that each state can be different so check with an attorney in your state to guide you through these matters.

Most people are not aware that the Louisiana Succession procedure (regarding executors) and the Louisiana Trust Code (regarding trustees) have different provisions and different applications.

Here are three rules you should be aware of when considering naming more than one executor or co-trustee:

(1) Executors. Louisiana Succession law provides that when there are several executors named, all action by them shall be taken jointly. Provisions in the will can alter this rule.

(2) Two trustees named. If there are two trustees of a trust named, the powers conferred upon them shall be exercised only by both of them. The trust instrument or a court could alter these default provisions.

(3) Three+ Trustees. A power conferred in three or more trustees may be exercised by a majority of the trustees, unless the trust instrument provides otherwise.

So, when three executors are named in a will, action by them shall be taken jointly. But if three trustees are named in a trust, actions by them may be taken by a majority.

I do not know why there is this distinction and difference between our Louisiana Succession law and our Louisiana Trust Code, but you should fully understand these differences when you are working with an attorney to prepare your will or trust, and you are naming more than one person to be in charge when you die. Many parents do not want to show favoritism toward just one child, so they designate all of their children to fill these roles.

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 Required in Louisiana to Become an Independent Executor or an Independent Administrator?

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

Estate Planning Case Study: Married Couple with $3m Estate

While every individual and couple that engages in estate planning has a different set of circumstances - no two are the same, the following is a case study of a Louisiana couple that has accumulated some wealth, never engaged in estate planning before, has two adult children who are late 20's and early 30s, and wants to keep control of their estate, provide for the surviving spouse, preserve it for the kids, keep estate matters simple, and avoid tax and government interference.

Let's say that the couple owns a home in Louisiana and a condo on the beach in another state. The husband worked for a chemical company, built up his 401(k), and when he retired, he rolled over his 401(k) into his traditional IRA. They have a joint brokerage account, vehicles, and a boat. Total estate is $3,000,000.

Some of the issues we would discuss include:

(1) First Spouse Dies. We would discuss how they want to leave their estate to their spouse when the first spouse dies. Do they want to leave their estate in full ownership to their spouse? Do they want to leave their estate in trust for their spouse so that assets get preserved for the children after the surviving spouse dies? Or, since they live in Louisiana, do they want to leave usufruct to their spouse, giving their spouse an obligation to account to the kids at the termination of the usufruct? Each of these options has varied estate tax, income tax, and capital gains tax consequences. Gotta do this right the first time before the first spouse dies.

(2) Surviving Spouse Dies. Do they want to leave assets to their children outright or in trust? Do any children have special needs, the inability to handle a lump sum inheritance, marital issues, or some other issues that would warrant leaving the inheritance to a child in trust? Lots to discuss here.

(3) Who's In Charge When You Can't? Who should be primary and backup for Trustee, Executor, Durable Power of Attorney, Health Care Power of Attorney, etc. We'd discuss the life-support machines decision.

(4) Taxes. We discuss the distribution rules for IRAs and retirement accounts and how those rules differ for spouse and non-spouses as beneficiaries. We'd discuss the step-up and double step-up in basis which can save the heirs a fortune when the sell your assets.

(5) Avoid Probate. We'd discuss the pros and cons of the "Will Based Plan" and the "Revocable Living Trust Based Plan," which can allow the surviving spouse and the children to avoid multiple probates in multiple states - given that the couple owns real estate in two states. The RLT Program would keep brokerage accounts from being frozen in the future.

Again, since very person is different - their objectives, their family, what they own, don't take this info and think that it perfectly applies to you. You need to work with the right estate planning attorney the first time so that problems don't surface later.

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

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

How To Find Out What Accounts Deceased Person Owned

Occasionally, after someone dies, the family starts to question what their deceased relative really owned. Sometimes we hear statements from children or other relatives like:

"I thought Dad had more CDs at the bank."

"I thought Dad had another savings account."

"I thought Dad owned stock in some other companies."

"I thought Dad had an annuity and a life insurance policy."

Well, there is no central registry that you can go to and determine everything that someone owned when they died. But there are both informal and formal ways that you can dig and determine what someone owned on the date of their death.

There are a couple of obvious formal ways that you can try and discover additional assets. First, go back and look at the last few years of their tax returns. They would likely have received tax reporting statements from financial institutions that show that accounts were owned. Second, check their mail. If they owned financial accounts, it's likely they may received account statements in the mail.

And then there is the formal way to discover someone's assets after they died. Let's use an example of Dad, who died with a last will and testament. Dad names Son as executor. People are questioning the fact that Dad owned additional accounts. Once Son works with the lawyers and the court system to get confirmed as the executor, the courthouse will issue certified copies of Letters of Independent Executorship. Son can then go to every financial institution where he thinks Dad may have had an account, and the "Letters of Independent Executorship" require the third parties to disclose Dad's account information to Son, who is the independent executor.

So, there is no central registry one can go to and figure out what someone owned when they died, but there are both informal and formal ways to locate whether a deceased person owned additional accounts or other assets. Your estate planning and estate settlement attorney can help you get the proper court authority and make the right kinds of inquiries to expedite this process. And ideally, none of this is necessary if the deceased person would have, during his or her lifetime, maintained a current inventory of assets and communicated that inventory to the appropriate family members or other loved ones.

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

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.

Four Reasons To Administer The Louisiana Succession

When a resident of Louisiana dies with assets in their name, there is likely a Succession necessary. Financial accounts are likely frozen, real estate cannot be sold or transferred, and other estate settlement issues need to be addressed.

The simplest of Successions are handled without an administration. Let's say Husband died and the only asset in his name is the home he owns with Wife. Wife has no interest in an immediate sale of the home. This Succession, perhaps, can be completed without an administration. The attorney prepares the pleadings petitioning the judge to order that the home be transferred to Wife.

In many cases, however, an Administration is necessary because things need to be handled prior to the conclusion of the Succession. When an administration occurs, a judge either confirms the executor that was named in the will, or the judge appoints an Administrator of a Succession when no Will existed. The following are four reasons why an administration may be necessary as part of completing a Louisiana Succession:

(1) Need Access To Funds. When someone dies, often their accounts are frozen. When an executor is confirmed, or an administrator is appointed, on the front end of the Succession, that person can establish an estate account and move funds from frozen accounts into the estate account. This is often a necessary step if bills need to be paid, or the Succession incurs expenses, or mortgages or car notes must be paid, while the Succession is taking place.

(2) Best For One Person To Handle Financial Issues. Without an administration, it can be cumbersome for the family to wait for months or longer to share in the inheritance, only to be asked to give some of their inheritance back to cover Succession debts or expenses. It is often easier for an executor or administrator to be confirmed or appointed, and then that person can take care of all Succession related debts, expenses, or other matters, and then disburse remaining funds or assets to the several heirs at the conclusion of the Succession.

(3) Funds Payable To Estate. Sometimes a deceased person is entitled to funds. Perhaps the deceased is entitled to a tax refund from the IRS or the state. Or perhaps the deceased is entitled to a refund for funds advanced to a nursing home or assisted living facility. The funds will be remitted to the deceased person's estate. When a check is payable to estate, no individual can deposit that check. It must be deposited into an Estate account. The only way to create an estate account is to administer a Succession, have an executor confirmed or administrator appointed, and then have that person open an estate account.

(4) Succession Assets Need To Be Sold. It is not uncommon for a Succession to need to sell a vehicle of the deceased, a piece of real estate, an investment, or some other asset in the name of the deceased. Sure, you could wait months or years until the Succession is complete, and then transfer the vehicle to the five heirs, and then have the five heirs each individually do all of the paperwork to sell the vehicle. But it may be easier, on the front end, to have an executor confirmed or an administrator appointed, and then have that one person transact the Succession asset by himself or herself, and simply deposit the sale proceeds in the estate account for later distribution to the heirs.

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.

Who Should Be the Administrator of a Louisiana Succession?

When someone dies in Louisiana owning assets in their name, a Louisiana Succession is required to administer those assets and transfer them to the heirs. When someone in those circumstances dies leaving a last will and testament, the Will likely appointed an executor. But if no last will exists, then often a judge must appoint an Administrator of the Succession. So, who should be the Administrator of a Succession?

Once appointed, the Administrator often opens an Estate bank account, deposits funds from previously frozen accounts into the estate account, pays estate expenses from the estate account, sells estate assets, such as vehicles, investments, or real estate, and handles other necessary Succession administrative matters.

But someone must petition the court and ask a judge to be appointed the Administrator. Who should that be? Well, it's best if that person has the support of all of the other heirs. If all of the heirs agree, then an Administrator can be appointed as an "Independent Administrator," which lessens some of the bureaucratic red tape that must be handled.

When a surviving parent dies, and an Administrator must be appointed, things work well when those heirs all get together and agree that one of them should be appointed the Administrator. 

Sometimes, but rarely, a co-owner of property requests to be appointed an Administrator because real estate needs to be sold, the deceased was a co-owner, and another co-owner petitions the court to be appointed the Administrator so that the property can be sold.

Note that an Administrator will be entitled to compensation from the estate. Sometimes, an Administrator will waive their compensation because the Administrator wants to sell of the heirs treated equally. In addition, an Administrator's fee would be taxable income to the Administrator, while an inheritance is generally income tax free.

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