Wills &
Successions
Should You Have a Will?
People make Wills for a lot of reasons. These include saving estate
taxes, burial arrangements, to disinherit someone, to leave family
heirlooms, to establish trusts for an heir who cannot manage money, and to
provide guardians for minor children or dependent adults. People who own their
own business can provide for the continuation of that business through a Will.
Without a will the laws of Louisiana determine who gets your property. If you
die without a will Louisiana law requires that your estate passes as
follows:
If no children – spouse gets all the community property, your nearest blood
relatives get your separate property.
If there are children – your spouse gets one-half of community property and
the use of the other half until remarriage and children share in the remaining
one-half of the community and all your separate property.
If you have no spouse – children share equally in the estate.
If no spouse or children– parents and siblings share.
If none of the above – grandparents or the descendants share.
If none of the above – nearest relative inherits the entire estate.
If no relatives – the State of Louisiana receives the entire estate.
It is important to understand the difference between community and separate
property. Also there are many variables which may change the above. Speak with a
lawyer before you decide to have a will or not.
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Forced Inheritance
Many years ago, Louisiana required your children to inherit a portion of your
estate. This has changed. You can now leave your children nothing if they are competent,
and not disabled, and twenty-four (24) years of age or older.
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Avoiding Probate
(Successions)
The only way to avoid successions in Louisiana is to have no land in your
name and the value of your assets when you die is less than $50,000.00.
Living trust can be a means to avoid a succession. With a living trust,
all your property is placed in a
trust and upon the death of the grantor, the property passes to the named
beneficiaries of the trust. Be careful! If property is not put in the trust, it
will need to go through a succession. A Will may be needed to put all remaining
property into the trust. If it is a revocable trust, you keep control over the
property but don’t escape estate taxes.
This means a lot of the problems associated with “Probate” must still be
faced.
In an irrevocable trust, you have no control over the property but there may
be less or no estate tax.
Living Trusts are not for everyone. You should carefully consult with a lawyer before you make any decisions.
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Will Formalities
You can write your own Will. There are technicalities that must be followed.
You must be careful. It is best to consult your attorney.
A Will can be cancelled at any time. A new Will can be made or a codicil
executed to add to or change the will. Because tax laws change a Will should be
reviewed every few years.
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Living Wills
The purpose of a Living Will is to allow you the right to make decisions
relating to their own medical care, including having life support withheld or
withdrawn when you are terminally ill. The person must be 18 years of age and of
sound mind. It must be signed by the person and witnessed by two people.
Durable Health Care Powers
of Attorney
A Durable Health Care Power of Attorney is used to control all aspects of
their personal care and medical treatment, including the right to decline
medical treatment or to direct that it be stopped. This type of Power Of
Attorney provides for the following:
- donation of organs
- refusal of autopsy
- disposition of remains (i.e., cremation, burial)
- appointment of an agent to make decisions of some or all medical treatment
if the individual is unable to do so for themselves
- continuing or terminating food and water
- naming a person to be a guardian of the person if one becomes necessary.
The power of attorney can be amended or revoked at any time.
Because many people do not have either power of attorney or living will,
Louisiana has a law which establishes reasonable procedures for making decisions
to end life-sustaining treatment once you lose the ability to make decisions and
are terminally ill. It allows another person to act on behalf of the patient. That person is designated as a
spouse or closest relative.
There is a Federal Patient Self-Determination Act. This requires hospitals
and nursing homes to advise patients of their rights concerning the withdrawal
of withholding of life sustaining treatment.
I often recommend my clients combine a general power of attorney with a
health care power of attorney to allow their designated representative to take
care of their assets. The truth is an appointed agent is often necessary toward the end of life to
manage an elderly person’s affairs. It is better for you to determine who that
person is while you can.
This information is generalized. You should consult with an attorney
regarding your specific situation.
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Successions
Successions in Louisiana is often confused with the term “probate”
used in other states. A succession in Louisiana takes property out of a deceased
person’s name and puts the property in deceased heir's name. Probate, however,
refers only to filing the will. The steps are simple. If there is a will you
must file the will at the courthouse. In normal circumstances, probate of a will
takes a few days but it is only one step in completing a succession.
What do you need to bring to your lawyer to begin the
succession proceedings? It would be a great help and speed up the process if you
had the following:
-
Death Certificate;
-
Expenses of deceased’s last month of his illness
(amount not paid by Medicare), these bills would be Pharmacy, Doctor,
Hospital, Home Health Agency and Sitters;
-
All funeral expenses, including the funeral home,
flowers, and headstone;
-
Copy of the will, and have the location of the
original;
-
Number and location of a Safety deposit box;
-
Copy of the pink slips or the titles of all titled
vehicles;
-
Copies of the Deeds to all property, if you have them,
or the identities of the properties if do not have copies;
-
Copies of all bank statements for all accounts for the
month of death;
-
Copy of all stock broker accounts statements, annuities
or similar investments for the month of his death or the one closest in
time to the death;
-
Copies of all stocks and bonds certificates;
-
A list of all debts owed at the time of death;
-
The full name, address and social security number of
the surviving spouse and all children;
-
The full name, address and social security number of
all individuals named in the will;
-
Copies of any insurance policies where the estate is
named the beneficiary or that no beneficiary is named;
-
Copies of all property tax notices, and
-
You should prepare a complete list of all assets with
the value for each item.
After the information is collected, the attorney prepares a list of all the assets and debts, with values, of
the deceased person. This list is signed by the heirs. A Louisiana and possibly
a federal estate tax return must be filed. Once state inheritance taxes are paid
and there are no problems the judge orders the assets taken out of
the deceased’s name and placed into the heirs’ name.
The attorney’s
work can sometimes be done within a few weeks of receiving all the necessary
documents from the family members. You then wait a week for the inheritance tax
review and another week for the judge’s signature.
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Administration
If there are absent heirs, a dispute among the heirs, or assets need be managed
then a succession must be administered. This takes a
longer period of time and the costs increase proportionately. I try to avoid
administering successions unless there is a special need.
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INHERITANCE TAXES
LOUISIANA TAXES
This tax is being phased out, currently the rates for the inheritance of
children start at two (2%) percent
and increase to three (3%) percent. There are exemption for amounts inherited by
relatives. The surviving spouse usually pays no tax. The low tax rate combined with exemptions mean that Louisiana
inheritance taxes play a small role in estate tax planning.
FEDERAL INHERITANCE TAXES
As a general rule, to pay Federal inheritance taxes the value of your
estate must exceed $675,000.00 (to be gradually increased to $1,000,000.00) For
a married couple whose assets are community property this means an estate of
$1,350,000.00 to increase to $2,000,000.00 will pay no Federal inheritance tax.
There are many simple things you can do to reduce or eliminate your heirs
having to pay this tax. The key is to start planning early.
Estate planning can be a complicated endeavor. You should have a trusted
legal advisor before you embark on this task.
(See exempt amounts)
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