- Personal Finance
Louisiana Succession and Probate
In some respects, Louisiana law is converging with that of other states as a result of legislative action to include uniform codes and law. Further, convergence is sometimes a result of case law. However, in successions, Louisiana has maintained the concepts and heritage of Napoleonic Code.
Strict Probate and Succession
Louisiana succession law and probate differ from most other states in its strict, and sometime surprising, succession order. This forced succession order can often be disconcerting for a surviving spouse. This is one, of several reasons why it is a very good idea for an individual with any property of note to have a will that determines his or her wishes for the distribution and use of property of a deceased individual.
One significant change recently was the elimination of the inheritance tax in Louisiana. The tax was eliminated on July 1, 2004 for those dying after that date. However, one quirk of the law in that the tax will still be applied to those estates when succession is not opened within nine months of the date of death or file a trust with the Department of Revenue.
There are situations in Louisiana when probate is not necessary or can be avoided. If there is no will, no real estate and the total estate is under $50,000, probate is not required. Probate can also be avoided if certain estate planning techniques are used like a living trust or an irrevocable trust.
Testate or Intestate
There are two types of successions in Louisiana, testate and intestate. A testate succession means the decedent had a will and it was probated. An intestate succession results from a decedent not having a will.
The terms of a will controls most of the distribution of property in a testate succession. In an intestate succession, statues control who inherits what property and in what amounts. This is another reason that an estate with any significant property should be bound by a will.
Louisiana is a community property state but not all property of a decedent will necessarily be community property. Community property is usually property accumulated when a couple was married.
Property can be separate property. Separate property is property owned before the couple married or property inherited. Property given to one spouse is also separate. Property can also be made separate by contract or certain business arrangements.
One surprise for many spouses upon the death of their loved one is that they inherit no portion of their spouse's community property if there are children in the marriage. This can be changed with a will.
With a will, an individual can leave a portion of his or her community property to the spouse. All of the community property can be left to the spouse if there are no forced heirs. A will can also provide a spouse with lifetime use (usufruct) of the property.
Children are forced heirs up to the age of 24. Permanently disabled children are forced heirs regardless of age.
Not all property must go through probate. Beneficiaries of 401K or IRA plans and life insurance policies are not subject to probate.
It is a very good idea to have a will if there is any substantial property for distribution. Will can change the order of succession. They can name executors or guardians. They can create trusts or help avoid excessive estate taxes. Will will eliminate any doubt as to the decease's wishes for the estate.
Without a will, you will be limited to Louisiana's statutory order of succession.