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Estate Planning, Probate, and Elder Law

When someone dies, there is a process for the orderly distribution of that person’s assets and payment of estate debts and expenses. In Louisiana, this process is called a succession. A succession means the transfer of the estate of a deceased person to his successors, the persons inheriting the assets. In Louisiana, immediately at the death of the decedent (the person who died), successors acquire ownership of the estate assets. Although this occurs automatically, the successors must still obtain proof that they are the legal owners of the decedent’s assets. The proof is necessary to identify the new owners to third parties in order to sell, lease, mortgage or otherwise use the property of the estate as the owner. Thus, a primary function of a succession is to determine the identity of the deceased person’s successors and to re-title and place them into possession of the decedent’s assets. For example financial institutions will not release funds and investments to the successor until written proof of the succession is provided. Likewise a buyer will require proof of good title to property a successor inherits. A Judgment of Possession rendered in a succession provides the proof of the transfer to third parties. In addition, outstanding debts owed by the decedent are paid with estate assets.

Click on the Succession Checklist to help gather the information needed to complete your loved one’s succession.

Other states refer to this process as probate. Sometimes successions are referred to as probate in Louisiana as well. The term “probate” means to prove the validity of a will. Probate and succession are often used interchangeably to mean the process of putting the successors of the decedent’s estate into possession of the inherited assets.

The Probate Estate vs. the Federal Gross Estate

Some assets owned by a decedent may not be part of the probate estate so it is important to distinguish between probate assets and non-probate assets. The federal gross estate includes all assets in which the decedent had an ownership interest. Federal estate taxes are based on the value of the federal gross estate. The probate estate consists of all assets that are distributed by the decedent’s will or through intestacy. Non-probate assets like retirement accounts, annuities, and life insurance proceeds paid to a named beneficiary and federal savings bonds titled “A or B” are not part of the probate estate. These non-probate assets are included in the federal gross estate. Non-probate assets are not controlled by a will or the intestacy laws but are paid to the named beneficiary of the asset.

Intestate and Testate Successions

A succession is required to re-title and transfer property whether the decedent died testate or intestate. If the decedent died with a valid will, the succession is a testate succession. If the decedent did not have a valid will at the time of his or her death, the succession is an intestate succession. A successor who inherits property through a testate succession is known as a legatee. A successor who inherits property through an intestate succession is known as an heir.

Succession Procedures

Louisiana recognizes three types of succession procedures: small successions, simple possession and administered successions.

If the succession does not qualify as a small succession or for a simple possession proceeding, the succession must be administered. The composition and complexity of the estate and the identity of the successors determines which procedure may be used.

Small Successions

A small succession is the succession or ancillary succession of a person leaving property in Louisiana having a gross value of $75,000 or less as of the date of death. The successors of a person who dies intestate or testate and with an estate value under the threshold may be able to take advantage of a small succession.

The affidavit procedure may be used for small successions where the judicial opening of the succession is unnecessary. When the succession qualifies, the heirs may be placed into possession by affidavit. The affidavit is presented to financial institutions as proof of the heir’s ownership, and it serves as proof of chain of title for real estate. The affidavit procedure for small successions may be used for a succession of:

  1. A person domiciled in Louisiana who died intestate if the heirs of the decedent are his descendants, ascendants, brothers of sisters or their descendants, or the surviving spouse; or
  2. A person domiciled outside of Louisiana whose testament has been probated by court order of another state if the sole heirs are the decedent’s legatees under a testament probated by a court of another state.

The affidavit small succession is not available for a succession of a decedent domiciled in Louisiana who dies testate or for a decedent domiciled in another state who dies intestate leaving property in Louisiana.

For example, a decedent dies intestate while living in Louisiana with a bank account valued at $45,000 as the sole asset. The heirs are his two children. The children can have the bank account placed into their name with a small succession rather than going through the normal succession procedure. In fact, this succession would qualify for the affidavit procedure. If a succession does not qualify for the affidavit procedure, the succession will have to be judicially opened. Successions that do not satisfy the criteria for a small succession will be a regular simple possession succession or an administered succession.

Simple Possession

Simple possession is a procedure where the succession documents are typically filed all at once, and the succession is opened and closed in the same day. If no administration is necessary because no estate taxes are due, no creditors demand an administration, and all heirs/legatees accept the succession, an Affidavit of Death and Heirship is filed to initiate the succession and to establish the jurisdiction of the court. If the decedent died testate (with a valid will), a petition is filed asking the judge to probate the will. The executor named in the will is not confirmed and officially appointed because there is no role for an executor in an unadministered succession. A list of all of the assets and liabilities is filed. Any outstanding debts of the decedent are typically settled at this time. Next, a petition is filed asking the Judge to place the successors into possession of their respective portions of the estate. Finally, the Judge signs the Judgment of Possession which places the heirs into possession of the decedent’s estate. As a practical matter all of the documents may be filed on the same day, and the succession is opened and closed in a day.

Administered Successions

Successions that do not qualify for a small succession or simple possession succession must be administered. Typically successions require administration due to their large size that results in payment of estate taxes; their complex nature of assets, business ownership; the existence of outstanding debts, or other circumstances that prevents the use of an unadministered succession proceeding. An administered succession requires the appointment of a succession representative. A succession representative is also known as an executor (executrix if female) for testate successions and an administrator (administratrix if female) for intestate successions.

Is a Succession Necessary?

Sometimes the heirs or legatees decide not to open a succession. Often a title examination many years after the decedent’s death triggers the need to open the succession. For example, if a person dies intestate with a surviving child. All of the decedent’s assets will be inherited by the child; however, they cannot legally exercise ownership over the assets until a succession is completed. The child cannot sell real estate owned by the decedent, because the real estate is still in the name of the decedent. If the child tries to sell the property 15 years after the decedent’s death, the title examination will show that the child does not have clear title of the property and cannot sell the property. The only acceptable proof that the child is the rightful successor of the real estate is a recorded Judgment of Possession. The Judgment of Possession re-titles the decedent’s property into the child’s name. After the Judgment of Possession is recorded, the child may sell the property as the new owner. Sometimes real estate is passed down through multiple generations without a succession after each death. When a successor tries to sell or borrow against the property, successions must be done for each decedent to show proper chain of title to the last successor or current owner.

Duties of the Succession Representative

The succession representative is typically the person who contacts the attorney to start the succession process, although any successor or creditor may open the succession. The succession representative will be responsible for gathering information of the estate’s assets that is used by the attorney to prepare the descriptive list. When the succession representative is appointed, he or she is regarded as a fiduciary with the duty of collecting, preserving and managing the succession property. The succession representative must act as a prudent administrator and is personally responsible for damages resulting for failing to act as such.

The succession representative may have to obtain a tax identification number for the estate if the estate will file a fiduciary income tax return. If the estate’s income is $600 or more, a fiduciary income tax return must be filed.

Independent Administrations

In an effort to streamline the succession process, Louisiana allows the independent administration of successions. As a testator, you may choose to have the succession representative serve as an independent administrator by stating in your will that the succession representative will serve as an independent administrator.

An independent administrator has all of a standard succession representative’s powers and rights but without the requirement of petitioning the court to take certain actions or the requirement of publishing notices for the sale of succession property. Providing for an independent administration can greatly streamline the succession process by allowing the independent administrator to act without court authority. Moreover by eliminating the need to seek court authority, an independent administration can reduce the cost of a succession by reducing the need to file petitions with the court to take certain actions.

If the will does not provide for an independent administrator or if the independent administrator named in the will is unwilling or unable to serve, all of the general or universal legatees may collectively agree to designate an independent administrator. Furthermore, if a decedent dies intestate, all of the intestate heirs may agree to select someone to serve as an independent administrator.

How Much Does a Succession Cost?

Unlike some other states, Louisiana does not have a fee schedule set by law. In general the attorney’s fees will depend on the complexity of the decedent’s estate. The fees for most successions are based on an hourly rate or a price range is quoted to complete the succession. A small fraction of successions are handled on a percentage of assets basis. You should use caution prior to agreeing to a fee based on a percentage of assets. Often, you will find that it is more cost effective to complete the succession under an hourly or flat fee arrangement. The bottom line is that it depends on the composition of estate assets and liabilities. You should always speak to several attorneys prior to hiring a succession attorney.

If you have questions about a quote for a succession or would like a second opinion, call Attorney John Sirois, in Houma at 985-580-2520 or e-mail him.

Click on the Succession Checklist to help gather the information needed to complete your loved one’s succession.

Click here to order a copy of John’s book, Louisiana Retirement and Estate Planning.