The information below is designed to answer some frequently asked questions about successions in Louisiana. Please be forewarned that this is general information which may not apply to your situation, depending on the particular facts and circumstances. The information below is not meant to constitute legal advice; always consult a competent legal advisor, preferably one certified as an estate planning and administration law specialist by the Louisiana Board of Legal Specialization, to obtain advice pertinent to your specific problem.
Succession is the process of placing the decedent’s assets into the hands of his heirs or legatees. That is why the title to the proceeding in court is referred to as the ‘Succession of John Doe.’ The Succession process can be simple or complex depending upon the nature and size of the decedent’s estate.
1. What happens if I die without a Will?
Property acquired during your marriage is community. Your spouse owns one-half. Your other half of the property passes to your children subject to your spouse’s right to use the property until his/her death or remarriage, whichever comes first. Your separate property passes to your children not subject to any usufruct (the right to use) in favor of your spouse. The law provides different rules in situations where you have no children or spouse.
2. Who is in charge of my succession?
It depends. If you do not have a Will, any heir, spouse, or even a creditor can apply to be appointed as your Administrator. The Administrator must take an oath and post a bond equal to 125% of the value of your assets. The cost of a bond could be expensive. If you have a Will, the person you name in your Will will be appointed Executor. In Louisiana, if these persons are females, we refer to them as the Administratrix or Executrix.
3. What does my Executor/Administrator do?
He is in charge of preparing a list of all of your assets, selling assets needed to pay debts and expenses of your estate, and distributing the remainder to your heirs and legatees. The law sets the Executor’s fee at 2 1/2% of the gross estate unless you state otherwise in your Will.
4. Is it better to have a Will?
Yes, for several reasons. Without a Will, your surviving spouse cannot sell real estate and certain investments without obtaining your children’s permission. With a Will you can grant the surviving spouse the right to sell your half of the assets with the understanding that your spouse will owe your share of the proceeds from the sale to your children at the end of the usufruct.
With a Will, you can confirm the surviving spouse’s usufruct for life, which is important if you have an estate in excess of the federal estate tax exclusion. With a Will, you can name an Executor of your choosing, set his fee, dispense with the need for a bond, and provide for administration of your estate without court supervision. You can also name guardians for your children (called Tutors in Louisiana) and, of course, make particular bequests to those who would not get your property if you died without a Will.
5. How do we start the Succession?
If there is a Will, the Executor asks the Court to probate the Will and issue Letters Testamentary to the Executor, which shows to the world the Executor is in control of the Succession. Without a Will, the Administrator must first compile a preliminary list of the decedent’s assets and post a bond before the Court will issue Letters of Administration to the Administrator. In both cases, an Affidavit of Death and Heirship setting forth the decedent’s next of kin and a copy of the death certificate must be filed with the court.
6. What happens next?
The Executor will open a bank account in the name of the Succession and obtain an ID number from the IRS for the Succession. The Executor will collect all money in the decedent’s name and place it into the Succession account. The Executor will pay bills as they come due and determine whether assets need to be sold in order to pay other debts. After all debts and expenses have been provided for, the Executor will petition for authority to distribute the remainder to the heirs at law or legatees under the Will.
7. Is court approval required to sell assets and pay debts?
The Executor may not sell assets or pay debts or expenses without first obtaining Court approval. In most cases, the Executor must ask the Court for permission, publish a Notice in the paper of the proposed sale or payment of funds and give interested parties an opportunity to object. If no objection is made the Court will approve the sale or payment of funds. Notice of the proposed sale or payment is not automatically given to the heirs or legatees. You must specifically ask the Executor to receive a copy of the Notice by filing a request in the succession proceeding. Obtaining Court approval can sometimes be time consuming and costly.
8. Can the Succession be administered without Court supervision?
Yes, you may provide that your Executor may act independently in your Will. If you have no Will, your spouse and your children can ask the Court that the Administrator act independently. In such case, your assets may be sold and your debts may be paid without first obtaining permission from the Court, thereby saving time and money. At the end of the Succession, the Executor will still have to provide all heirs with an accounting of the assets on hand at your death plus all monies collected, less all payments made, unless the heirs waive the formality of such an accounting.
9. Who is responsible for the decedent’s debts?
Just because someone dies does not mean their debts go away. Whoever gets the decedent’s property takes it subject to the debts that go along with the property, up to the value of the property. The allocation of debts depends upon the terms of the Will and the nature of the debt. For example, if you leave your house to your children, they will take the house subject to the mortgage on the house. On the other hand, if you leave your house to your sister and direct that all of your debts will be paid from the balance of your Estate going to your kids, the Executor will payoff the mortgage on the house and deliver the house free and clear to your sister.
10. Can any of the above steps be avoided?
Yes, if the Estate is relatively free from debts no administration is necessary. All heirs and legatees must ask for possession of the decedent’s assets, subject to the decedent’s debts. The parties enclose a list of the decedent’s assets, an affidavit of death and heirship, and a copy of the death certificate. The court will issue a Judgment of Possession placing all heirs and legatees into possession of the decedent’s assets retroactive to the date of the decedent’s death. No separate income tax return for the Estate will be required.
11. How much does this cost?
Obtaining a simple Judgment of Possession without an administration typically costs $1,500 plus $400 in court costs. The cost of administering an Estate will depend upon the nature of the decedent’s assets, the amount of debts, whether property must be sold, whether objections will be made by the heirs, whether court supervision is required, and whether an accounting is necessary.
12. What is the first step?
You should call our office an ask for a Succession Checklist. This Checklist will provide you with a list of documents and information which must be gathered in order to open a Succession proceeding in Louisiana. To obtain the Checklist or for further information regarding the Succession process, call 985-898-2131, ext. 1000.
We hope that this information will be useful to you. The importance of properly and timely dealing with a decedent’s assets and debts cannot be overemphasized. For example, the election to allocate the decedent’s unused federal estate tax exclusion amount to the surviving spouse must be made within 9 months of death. We will be happy to answer specific questions in a personal and confidential meeting. Please call our offices to schedule an appointment with Ray Ladouceur or Jane Alvarez, 985-898-2131, ext. 1000.