Transfer Businesses

What Assets Go Into the "Avoid Probate" Louisiana Living Trust?

We are often asked about which assets should Louisiana residents put in their "Avoid Probate" Living Trust. This is important because if you don't title the right assets into your trust correctly, your survivors will be required to hire lawyers and go through the court-supervised process when you die to get those assets that were not in your trust, in your trust.

This is a very general overview regarding which assets should go in your  trust. If you want your family to avoid probate, you should work with our office to set up the appropriate estate legal plan that accomplishes your objectives. We will work with you, asset by asset, to make sure your assets are titled in a way to ensure a smooth transition to your survivors.

Here's the basics:

Your real estate should go in your trust. Be careful to transfer your home to your trust in a way that you preserve your property tax homestead exemption. You should also transfer your undivided interests in real estate (immovable property) and your out of state real estate. Transferring your out of state real estate to your trust will avoid the ancillary probate proceeding in that state when you die.

Investments. Stocks, bonds, mutual funds, and other investments that are not held in your IRA or other qualified retirement account should go in your trust. 

Small Business Interests. If you own a membership interest in a limited liability company (LLC), you should transfer your LLC membership interest into your trust.

Bank accounts. Check with your estate attorney and your financial institution regarding whether your bank accounts should be titled in your trust name, or whether you can take advantage of an alternative way to enable your bank and credit union accounts to pass to your survivors outside of probate.

Vehicles. Check with your attorney regarding Office of Motor Vehicles rules which may permit you to keep your car titled in your name but still avoid probate when you die.

Assets that typically are not transferred to your trust during your lifetime are IRAs and other Qualified Plans, Annuities, and life insurance. These accounts, by their nature, avoid probate because you are permitted to designate beneficiaries to receive the assets outside of probate when you die.

Give us a call at 866-491-3884 to start a discussion about how you can arrange your legal affairs to simplify the transition of what you've accumulated to your loved ones and survivors.

Divorced Monroe Father Now Has Children's Inheritance Protected From Ex-Wife

I'm working with a gentleman who lives in Monroe, Louisiana. He is divorced. He has three children - two are in their early 20's, and one is a teen-ager. He is not fond of his ex-wife - she took him to the cleaners in the divorce. He has a "significant other" that he may marry someday but no time soon. He stated that his main estate planning worries were:

  • He wanted to make sure his ex-wife did not control his money and his business interests if he died;
  • He wanted to make sure his children's inheritance would not be "blown," rather, he wanted to make sure his children would benefit for their lifetimes from the legacy he leaves them; and
  • He did not want his ex-wife, his "significant other," and his children to have to go through a probate proceeding in the courts after he died.

He owned a nice home in Monroe, and he wanted to make sure that his "significant other" (whether he married her or not) would have a right to continue living in the home for as long as she wanted to after he died.

He knew that if he had no estate legal plan in place, that his ex-wife would control his teen-age daughter's inheritance, which means she would also have indirect control over the adult children's inheritance because the three children would be inheriting together and co-owning assets.

So we are establishing a trust so that when he dies, his business partner (as the Successor Trustee) can manage his estate for the three children and dole it out to them at different stages in their lives. The children will not get a large inheritance in a lump sum, and will not have an opportunity to "blow it all" with one big mistake. Setting things up this way will keep the ex-wife out of this father's financial affairs when he dies. The family will avoid what would have been an ugly probate proceeding with each party being represented by different bulldog attorneys (further draining estate assets), and the father can rest assured knowing that his significant other will be protected with a home, and his children's inheritance will be protected.

If you are divorced and you want to make sure that your ex-spouse does not control all of your money when you die, you may want to give me a call at 866-491-3884 to start a simple conversation about how easy it is to put an estate legal program in place, whether you live in Monroe, Shreveport, Alexandria, New Orleans, Lake Charles, Lafayette, or Baton Rouge.

How To Leave the Family Business

I was working with a couple from the Lafayette area this week. They had four children. Two of their children worked in their business and the other three children did not. They were very sensitive to the fact that the two sons "in the business" should inherit the business when Mom and Dad pass away.

The mother, in particular, was emotional about wanting to set up an estate planning legal program that was "fair" to all of their five children. The couple know that their business was valuable, and Mom felt that if they left the business to the two children who were in the business, and left everything else to the five children, then that would not be "fair" because the children getting the business would be getting significantly more than their other three children. 

They did not want to short change their other three children simply because those three children were not suited to work in the family business. One solution Dad had already created was to purchase life insurance that would go to the three children who were not in the business. But still, the life insurance death proceeds would not be enough to "compensate" the other three children for not getting any of the business value.

We discussed a number of alternatives. One of the alternatives we discussed was to structure the ownership of the business so that after Mom and Dad died, the business (it's actually three businesses) would be in a trust. The two children in the business would continue working in the business and would continue to collect salaries. However, when the business would later sell, the sales proceeds of the business would be shared by all five children.

This alternative seemed to resonate with the parents as a way to fairly provide for the transition of their business to the next generation while being fair to each of their five children. This arrangement can be tricky and we are still working out the details.

If you own a business and want to make sure that it passes to the right people the right way, you may want to give us a call and schedule a time to discuss your alternatives so that you can leave a legacy rather than leave some massive headaches to your loved ones.