SUCCESSION IN LOUISIANA

Inheritance basically refers to the transfer of property and wealth from a person who has died to a descendant who is still living. If a person dies without a will having left that specifies what assets are specifically left to his offspring, then all of his succession, whether community or separate property, passes to the offspring. If one of his children has predeceased the decedent, but has children of their own, those grandchildren of the decedent inherit by representation, meaning that they inherit and will split the share that their parent would have inherited.

It is often assumed that the surviving spouse inherits a 50% interest from the decedent. This belief is incorrect because the surviving spouse does not inherit anything from the decedent if there are children and no will.

If there are no children, then the surviving spouse will inherit the decedent’s portion of community property. A will could create any number of new rules of who will or will not inherit.

In order to understand Louisiana inheritance laws, you need to be familiar with the legal term USUFRUCT. The word is easier to understand if you think of two common English words: use and fruits.

Often in our state, one person will inherit the right to use the property while another will inherit the right to sell or mortgage property. A house is a perfect example.

One person may have the right to live in the house. Another person may own and thus have the right to sell the house. This other right is referred to as ‘naked ownership’. While the naked owner can sell the house, it would have no effect on the usufruct.

When the person who has the usufruct dies, the person who has the naked ownership automatically gets the usufruct, or in other words, becomes the ‘full owner’.

Even though a cost of succession in Louisiana can vary depending on the situation and the type of legal representation, as well as a number of fees associated with it, you could be looking at anywhere between $1,250 and $3,500 not including court costs, which usually range between $250 to $500 depending on parish.

However, if there are any legal issues to be resolved, such as children from multiple partners, or if there is a need for litigation, the cost can go higher than this.

Succession can be either intestate (without a will) or testate (with a will).

Intestate succession occurs when there is no will or when the will is invalid in whole or in part, or the will does not dispose of all the decedent’s property. Its opposite, testate succession, indicates that the deceased had a valid will prior to death.

In Louisiana, the law provides for the disposition of the assets in the absence of a will.

Intestate successors are commonly called ‘heirs’ while testate successors are commonly called ‘legatees’.

Additionally, a court-appointed administrator is the person in charge of the estate when someone dies without a will, while an executor is specifically named in the will to take charge of the estate.

For example, any retirement asset, like an IRA or 401(k), would not have to go through succession and would not be subject to inheritance tax. It is important to make sure your beneficiary designation(s) are up to date.

Some types of property are not considered part of your estate succession in Louisiana. Normally, a property that is paid directly to a named payee by a third party is not subject to succession laws.

For example, any retirement asset, like an IRA or 401(k), would not have to go through succession and would not be subject to inheritance tax. It is important to make sure your beneficiary designation(s) are up to date.

The first thing you should do when someone dies is to preserve the information that will be needed to conclude the succession. This information consists of information about the decedent, such as:

• the date he or she died
• where they lived when they died
• whether they executed a valid testament before death
• who are the heirs or legatees
• what property and liabilities they left behind

A good practice is to gather together in one place all of the bills and bank statements that are received in the mail over the next 30 days or longer. If the decedent had any stock, bonds, or other securities, it would be useful to retain a listing, such as a newspaper listing, of the quotes for the day they died.

It is also important to retain all of the bills for the funeral and burial. These bills are considered administrative expenses of the succession and are treated differently from all other bills that the decedent had at the time he or she died. If the decedent had pre-paid his funeral expenses, you should retain those records.