Louisiana Probate Law:
Louisiana has very strict probate and successions laws that control where property goes after someone dies. If there is no will, the state has a will in which certain assumptions are made. The first assumption is that the spouse should not inherit anything from the other spouse if there are children. The next assumption is that for separate property, nieces and nephews should inherit before a spouse. This usually comes as a big surprise to the surviving spouse.
TIP: Avoiding probate. There are situations where probate is not necessary. In Louisiana, probate is not required if there is no will and the estate is under $75,000 in total value. Probate can also be avoided with various estate planning techniques, such as revocable (living) or irrevocable trusts.
Successions in Louisiana are considered either testate or intestate. If the deceased had a will that was probated, then the succession is considered testate. If the deceased did not have a will, then the succession is intestate. With a testate succession, the provisions of a will control most of the dispositions. In an intestate succession, the statutes determine who inherits and in what proportions.
WARNING: This is where a spouse comes up on the short end of the stick. In an intestate succession, the surviving spouse inherits nothing from the estate of the deceased spouse if there are children.
What does happen to property when someone dies? There are two things that are looked at first: was the property community or separate; and, what relationship are the survivors to the deceased? Community property is usually property accumulated by a couple while they are married (unless there was a marriage contract). Examples of separate property would be property owned before marriage, inherited property, or property given to one of the spouses. In general, a spouse inherits none of the other spouse’s separate property. A spouse also inherits none of the other spouse’s community property unless there are no children of the marriage.
Can this be changed with a will? Yes, most certainly. A will can specify that a spouse come ahead of other heirs. If there are forced heirs, the forced heirs have to inherit a portion, but the will can provide that the remainder go to the spouse (or anyone else named in the will). The will can also give the spouse a lifetime usufruct over the forced portion. A usufruct is a limited right to the use of a thing. In other words, if you have a usufruct over stock, you would be entitled to the dividends from that stock. A usufruct granted in a will can even be worded to allow the person with the usufruct to sell the stock.
Does all property have to go through probate? Some types of property are not considered part of your estate in Louisiana. Normally, property that is paid directly to a named payee by a third party are not subject to succession laws. For example, any retirement asset, like an IRA or 401(k), would not have to go through probate. It is important, however, to remember to have alternate beneficiaries named on the account. If you name only your spouse and both of you die, the asset would have to go through probate. Proceeds of life insurance are another example of an asset that does not go through probate as long as there is a living named beneficiary.
Do I need a will? A will can do many things. The most important thing a will can do is change the order of succession that Louisiana provides in the absence of a will. A will can also do many other things, for example: 1) name a guardian for minor children; 2) name an independent executor which can save probate costs; 3) create a trust for grandchildren, special needs or spendthrift heirs; 4) for larger estates, make provisions to save estate taxes; 5) remove any doubt as to what you wanted after your death. If none of this is important to you, then you may be satisfied with the “will” that Louisiana has for you.
He received his Juris Doctor degree from the Louisiana State University Law Center in 1975. He is a frequent speaker in the estate planning field for corporate sponsored groups and also teaches estate planning seminars sponsored by the National Business Institute for lawyers’ continuing legal education requirements.
Mr. Covell is a member of the Louisiana and 22nd JDC Bar Associations. He is also chairman of the Estate Planning Committee of the Attorney General’s Elder Law Task Force. He is co-author of the Louisiana Legal Advisor which is a popular book on Louisiana law written for the layman, now in its 5th edition.
Mr. Covell is a Series 65 licensed investment advisor and is managing partner of Covell Financial, LLC, a registered investment advisor firm. Covell Financial is associated with TD Ameritrade as an institutional investor partner.