We received a number of questions recently from residents from the Houma-Thibodaux area with concerns about forced heirship. Over the years we have addressed many concerns regarding forced heirship from Louisiana residents and whether it applies to their estate plan. Forced heirship is unique to Louisiana and can dramatically impact your estate plan. Although the impact of forced heirship has changed over the years, it still applies to certain heirs as described herein.
In Louisiana, your children are forced heirs if, at the time of your death, they have not attained age 24. Children of any age, who because of mental incapacity or physical infirmity, are permanently incapable of taking care of their person or administering their estate at the time of your death are also forced heirs. In limited situations grandchildren are also forced heirs.
A child who is permanently incapable of taking care of their person or administering their estate includes a child who, at the time of the decedent’s death, has, according to medical documentation, an inherited, incurable disease or condition that may render them incapable of caring for their person or administering their estate in the future.
A forced heir must receive a portion of your estate regardless of contrary estate planning provisions. Therefore, if your will leaves everything to child A, and child B is a forced heir, child B must receive a portion of your estate (the forced portion). Forced heirs are entitled to the legitime (the forced portion) which is one fourth of the estate assets if there is one forced heir. If there is more than one forced heir, the forced portion is one half of the estate assets. However, if the fraction used to calculate the forced portion is greater than the fraction of your estate that the forced heir would receive if you died intestate (without a will), the forced portion is calculated using the fraction of an intestate successor. For example, Boudreaux dies leaving five children, and one is a forced heir. The normal rule calculates the forced portion as one fourth of the estate assets. However, because Boudreaux died leaving five children, the forced portion is one fifth of the estate assets.
Certain assets are excluded from forced heirship. These assets include life insurance policies benefits and premiums paid, deferred compensation plans, and qualified retirement accounts (IRAs, 401k accounts, etc.).
A properly planned estate can reduce the impact of forced heirship. A common estate plan between married couples is to leave everything to each other. This arrangement provides the surviving spouse with the use of all of the couple’s assets. If one-fourth or one-half of the assets must be left for the benefit of forced heirs, the surviving spouse may not have sufficient assets to maintain their standard of living. A viable option is to leave the forced portion in trust. This arrangement allows the surviving spouse, as the income beneficiary, to receive the trust income and other distributions from the trust. The forced heirs are the principal beneficiaries of the trust. Another option is to burden the forced portion with a usufruct in favor of the surviving spouse.
If you have a child with a disability their required inheritance through forced heirship will result in disqualification from SSI and/or Medicaid. Ideally, the forced portion is left to a special needs trust for their benefit.
If you have questions or concerns about forced heirship or estate planning, contact estate and elder law attorney and Certified Financial Planner, John Sirois at 985-580-2520 or by email. You can also find more information about forced heirship and estate planning in John’s book, Louisiana Retirement and Estate Planning, available by contacting John or through Amazon.com.