Frequently Asked Questions

All/Estate Planning/Power of Attorney/Trusts/Wills/

Your Last Will and Testament (also referred to as “Will”) may be the most important document you ever sign. You’ve spent your lifetime saving and investing for yourself, your family and your loved ones, and your Last Will and Testament allows you to leave your possessions behind to the people that mean the most to you.

There are two (2) valid forms of Wills in Louisiana.  The Olographic Will is a handwritten Will which is dated and signed exclusively by the testator.  The Notarial Will is a typewritten Will that must be signed in the presence of 2 eligible witnesses and a Notary Public and requires very specific attestation clauses for able-bodied, blind and/or physically infirm persons.

NO ORAL WILLS IN LOUISIANA…..NEVER!

Upon your death, your Pour-Over Will controls the disposition of your property not transferred to your Trust, namely your personal effects and your vehicles. These items do not need to be distributed via a court-supervised succession. Your personal effects may be distributed in accordance with your wishes without a court order. Your surviving spouse or heirs may transfer title to your vehicles by supplying a photocopy of your Pour-Over Will to the Office of Motor Vehicles, along with the vehicle title and a copy of your death certificate.

A Pour-Over Will is different from a regular Will in that it does not control to whom you leave all of your property. A Pour-Over Will controls only what was not transferred to your Living Trust during your lifetime. There is no need for a regular Will if you have set up a Living Trust, because the Trust will control to whom your property will go after your death. 

A Pour-Over Will is also different from a regular Will in that it does not need to be probated through a court unless an asset that should have been transferred to your Living Trust during your lifetime was overlooked.  In that case, your Pour-Over Last Will and Testament will need to be probated to transfer the asset to your Trust.

There are a number of good reasons why you should write a Will, including but not limited to:

  • Designating who you want your assets to go to when you die
  • Designating the executor or co-executor of your estate
  • Minimizing or avoiding federal estate tax
  • Taking advantage of forced heirship laws if you want to minimize what goes to a forced heir
  • Providing for contingencies that might occur such as a spouse or a child predeceasing you
  • Making it easier for your spouse to sell assets you leave him or her
  • Providing that your executor can serve as an independent executor, which can allow your estate to be settled much quicker and without significant court supervision
  • Establishing testamentary trusts for the benefit of those heirs who might need help managing their inheritance
  • If the default law of Louisiana doesn’t distribute your assets the way you want after you pass away
  • If you wish to provide for minors, special needs persons, your church, etc.
  • If you have specific bequests of your personal effects.

No estate plan is complete without addressing all of the following questions:

  • What are your main concerns regarding your estate?
  • What family members do you want to handle your finances when you can’t?
  • Who do you want making your medical decisions in the future when you can’t?
  • What are your life–support systems decisions?
  • Who do you want to be in charge of settling your estate when you pass away?
  • How do you want your estate distributed when you pass away?
  • Is avoiding estate tax a concern?
  • Is avoiding capital gains tax a concern?
  • Is your estate arranged so that income tax is minimized?
  • Are you arranging for transfers that would cause increased property tax?
  • Are your estate legal affairs arranged so that the court supervised guardianship/interdiction proceeding is avoided if you become incapacitated?
  • Is avoiding nursing home poverty a concern?
  • Is avoiding probate a concern?
  • Are you concerned about your estate being tangled up due to the past, present, or future potential divorces of your children?
  • Are any minor children who might inherit protected?
  • How will future life or law changes affect your estate plan?

Don’t make the common mistake of completing your estate plan and then have it collect dust for many years. Your circumstances are likely to change over the years, and your estate plan needs to keep up with your changing circumstances. Meet with your estate planning attorney about every three to five years or more often if any of the following occur:

  • One of your heirs passes away
  • There is a significant change in the value of what you own
  • You change your mind about how you will leave your assets to your heirs
  • You want to change your executor or you want to change your power of attorney
  • You discover there is a change in the law that may affect you
  • You get married or divorced
  • You incur a life-threatening illness
  • You move into or out of the state

A trust is defined as a relationship which results when someone transfers title to an asset to a person whose job it is to administer it for the benefit of another.

Example: In George’s Will, he made a bequest of $50,000 to his son, George, Jr., as trustee of a trust for the benefit of George’s grandson, George III. George provided, among other things, that the principal of the trust could be used for the health and education of George III, and George also provided that if the assets had not been used by the time George III reached the age of thirty, then the trust would terminate and the remaining trust assets would be distributed to George III. When George later died, a trust account was established and George, Jr., managed the account as trustee.

Every trust has one or more settlors, trustees, and beneficiaries. The Settlor is typically the person who sets up the trust. In the previous example, George is the Settlor. The Trustee is the person who manages the trust assets. In our previous example, George, Jr., is the Trustee. The beneficiary is the person who benefits from the trust. George III is the beneficiary in our previous example.

The following people typically are eager to establish a Revocable Living Trust in Louisiana:

  1. You have been through a difficult Louisiana Succession or an out of state probate in the past – perhaps when your parents died – and you don’t want to put your loved ones through the same thing.
  2. Perhaps your parents had a revocable living trust when they died, and you saw how easy it was to settle their estate.
  3. You don’t want your spouse or children to go through an expensive, time-consuming, stressful, and public court process when you die.
  4. You live in Louisiana but you own real estate in other states. A revocable living trust will avoid the Louisiana Succession and the ancillary probate in those other states where you own real estate;
  5. You objectively decide you want someone else to manage your assets for you. You can establish your revocable living trust and name someone else as your trustee (such as a trusted friend, advisor, relative, or a corporate trustee) so that they can handle your investments, bank accounts, and also handle purchases and sales of assets on your behalf, alleviating your management burden.

While the determination of whether you should have a Will-based estate plan or a Trust-based estate plan depends on your circumstances and objectives, it is fair to state that your Will based plan is easy to set up but requires court supervision of your estate settlement, while a Trust based plan requires you to transfer assets to your trust during your lifetime but avoids court interference when you die.

In summary, while trusts can be confusing at first to the lay person, trusts can be a valuable estate planning tool. Common types of trusts in Louisiana include:

  • Revocable living trusts. Becoming increasingly popular for Louisiana residents because it allows families to avoid the court-supervised Succession procedure at death and provides for a faster and less-costly estate settlement at death. A revocable living trust can be extra beneficial if you own real estate in other states allowing your family to avoid multiple probates.
  • Trusts for minors. If there’s a chance your minor child or minor grandchild will inherit assets from you, then you need to make sure those assets will be placed in trust so the courts won’t need to supervise the minor’s assets and so that the minor will be protected from squandering the assets when he or she reaches the age of 18.
  • Trusts to avoid estate tax. Not as popular now since the estate tax exemption has increased from $600,000 to $5,500,000, but if estate taxes are likely, you need to consider these irrevocable trusts.
  • Special Needs Trust. If you have a child with special needs, make sure any inheritance you leave that child is placed in a Special Needs Trust. This will help preserve government benefits that benefit the child.
  • Trusts for Married Couples. A way to make your assets available for your spouse after you die, but when your spouse later dies, the trust assets will revert back to your heirs, not your spouse’s heirs.
  • Charitable Trust. A vehicle which allows you to transfer appreciated assets to a charity, have them sold with no tax consequences, receive an income off those assets for your lifetime, and at your death the remaining trust assets are passed along to your favorite charity or charities.

To some extent, the trustee’s role in the Trust depends on the nature and purposes of a trust and its expected term.  With short-term, limited purpose trusts, you need someone who will preserve the assets, be sure that all tax and filing requirements are obeyed and make distributions.  But a longer-term discretionary trust requires a trustee to carry out your wishes within a much broader framework, to exercise good judgment and to be fair to beneficiaries who may have different interests and needs at times—in the trustee’s “sole discretion”.    Some people prefer to have a corporate trustee to make the investment decisions and tend to legal and tax requirements but feel family members or friends are in a better position to understand the family and its values.  In that case, they might want an individual co-trustee, or a committee of co-trustees, to advise or direct the corporate trustee about distributions.

Even assuming that a family member, business associate or close personal friend has the necessary background, training and objectivity to act as a discretionary trustee, the responsibility can be daunting.  The job of trustee can easily crowd out other commitments.  Equally bad, the trustee’s important work may end up relegated to evenings and weekends.  Also, consider the legal liability that comes with being a trustee; if things go wrong, your family members, business associates or close friends could be held personally responsible.

Generally, a Living Trust is set up during the lifetime of the Settlor (hence use of the term “Living”) and is a relationship that results from the transfer of title of property from the Settlor (person establishing the Trust) to a Trustee (person who administers the Trust) to be managed by the Trustee for the benefit of the Beneficiaries (persons to whom the Trust property will go when the Trust ends). Our Trusts usually consist of a five-page document that explains that the Settlor is transferring property to the Trustee for the benefit of the people to whom the Settlor wants their property to go when the Trust terminates. In most cases, the Settlor and the Trustee are the same person while the Settlor is still alive. This allows the Settlor to remain in control of the Trust assets. 

As the name indicates, the Trust is completely revocable. Should you ever decide you no longer want or need a Trust, you may dissolve it completely and transfer the assets back to your name. You may also alter the Trust document at any time.

While the revocable living trust has been a popular estate planning tool around the United States for decades, its popularity in Louisiana has intensified in recent years. Generally there are three reasons why the revocable living trust is a popular estate planning tool.

  1. The properly funded living trust avoids attorney costs and court costs involved in settling your estate through the court-supervised Louisiana Succession;
  2. Distributing assets after death to beneficiaries of a living trust is faster than distributing assets to heirs in a Louisiana Succession; and
  3. A Louisiana Succession requires a detailed public listing of all your assets and debts when you die. A living trust can be settled without the necessity of a public detailed listing of your assets and debts.

Living Wills–Making your wishes known about life support machines

You have the right to control decisions relating to your own medical care, including the decision to have life-sustaining procedures withheld or withdrawn in instances where you are diagnosed as having a terminal and irreversible condition.

The Louisiana legislature has determined that the artificial prolongation of life for a person diagnosed as having a terminal and irreversible condition may cause loss of individual and personal dignity which secures a burdensome existence while providing nothing medically necessary or beneficial to the person.   It’s difficult to make a decision to authorize the withdrawal of life support machines for someone you love. The purpose of our living will laws is to allow you to tell your family and your doctors what your wishes are regarding life support machines so that your family does not have to make that final decision. You’ve made your decision for them in advance by signing your living will.

You may make, at any time, a written living will (also know as a “declaration”) which directs the withholding or withdrawal of life-sustaining procedures if you have a terminal and irreversible condition.

Your written living will must be signed by you in the presence of two witnesses. The witnesses must not be related to you by blood or marriage, and a witness must not be someone who would inherit from you when you die.

Statistically speaking, within a given period of time, the probability of you dying is LESS than you becoming incapable of making financial and/or medical decisions for yourself.  Arguably, then, having proper Powers of Attorney in place is more important than having a Will or Trust!

A power of attorney is a document that you sign that gives someone else (your Agent) the authority to act for you under certain circumstances when you cannot.  If you don’t sign a power of attorney and you become incapable of managing your own affairs during your lifetime, either by accident or illness or other incapacity, there will likely be a court-supervised interdiction proceeding whereby you and your closest relatives will be at the mercy of the court and the court will, after considerable time and expense, pick a curator whose job it will be to manage your affairs and report to the court for permission to act on your behalf and for other matters. The interdiction is a burden that can be avoided.

Many people mistakenly believe that estate planning just involves getting their last Will and testament in place. Your Will does nothing for you in the event you become incapacitated during your lifetime. You need to make certain that you have the proper power of attorney documents in place. Laws in Louisiana regarding your power of attorney differ from the power of attorney laws of all the other states.  There are many reasons that you should sign a properly drafted power of attorney as part of your estate plan:

  • You will likely avoid the burdensome court-supervised interdiction proceeding that may be necessary when you become incapacitated and you haven’t executed a proper power of attorney
  • You can designate the person who will handle your affairs for you if you become incapacitated
  • If an interdiction is necessary, you can designate in your power of attorney who you’d want the court to designate as your curator or legal guardian during your incapacity
  • You can authorize your Agent in your Power of Attorney to engage in tax planning and Medicaid planning techniques that he or she would not be able to perform in an interdiction proceeding

Different Types of Powers of Attorney

All powers of attorney are not the same. You need to make important decisions before you sign your power of attorney.

General power of attorney. While discussing your estate plan with your attorney, the attorney asks you who you’d want to manage your property, business or financial affairs if at some point in the future you become incapacitated. Your attorney explains that most people execute a properly drafted power of attorney as part of their estate plan. She explains the benefits of avoiding the interdiction proceeding. For example, you tell the attorney that you would want your spouse signing for you if you were unable to sign during your lifetime, and you state that you would want your oldest son to do it if your spouse were unable. Your attorney prepares a general power of attorney authorizing your spouse to act for you and providing that your son can act for you if your spouse has died or is otherwise unable to act for you.  If two years later you have a stroke and your house or vehicle needs to be sold, it should be simple for your spouse (or your son if your spouse is unable) to sign the necessary documents allowing them to sell your assets if that is what is best for you.

Health Care Power of Attorney. You can designate in your health care power of attorney who you would want making your medical decisions for you if you are unable to make your own. You may have a different document called a Living Will Declaration  whereby you declare your intentions regarding life-support machines, but your health care power of attorney covers other important medical decisions.

In Louisiana, you must be express about the things that you want your agent to do. If you want your agent to have the authority to do any of the following things, it must be expressly stated in the power of attorney. Express authority in the power of attorney document is required if you want your agent to have the authority to:

  • Make a donation during your lifetime, either outright or to a trust
  • Accept or reject an inheritance
  • Take out a loan
  • Sell, buy, mortgage or lease something
  • Make health care decisions, such as surgery, medical expenses, nursing home residency, and medication.

Estate Planning Involves Protecting What You Own

You’ve all heard of the phrase, “Getting your affairs in order.” Well, that’s a simple but effective definition of estate planning.  You don’t know when you’re going to die. You don’t know if you’ll be incapacitated during your lifetime. As a result of that uncertainty, you need to plan.  You’ve probably worked hard to accumulate what you have. If you don’t plan properly your assets can be taken away. For example, if you go to a nursing home, you could spend thousands of dollars each month on your care. Or if you don’t handle your retirement account properly, you could pay unnecessary income tax. If you don’t plan for your future incapacity, your estate could be squandered away in a court-supervised guardianship proceeding. And with all of the lawsuits in America today, it’s even possible that you could be successfully sued resulting in someone taking your entire estate away from you.

   So, you can protect what you own while you are alive by:

  • Protecting your assets from nursing home expenses
  • Minimizing your income tax
  • Avoiding a court-supervised guardianship proceeding in the event of your incapacity, and
  • Protecting your assets if you are sued

Estate Planning Includes Taking Action to Protect Your Surviving Spouse

You may be thinking that you want to make sure that your husband or wife has financial security when you die. The Louisiana laws that apply when a married person dies benefit the children more than the surviving spouse. It’s important you take action NOW to give your surviving spouse the security he or she needs in the future.

Estate planning involves taking action to protect your children

You’ve worked hard over your lifetime raising your children and providing financial security for yourself and, if you’re married, for your spouse. You may be thinking that you’d like to be able to provide one final gift to your children by leaving them an inheritance. How nice would that be to allow your children to have peace of mind in their remaining years because you were able to leave them an inheritance.  Or maybe you ride around in your car with one of those bumper stickers that reads, “I’m spending my children’s inheritance.” While that may be true, I’ll bet that you’d rather have your children (or some other loved ones) inherit from you as opposed to your assets going to the government, the lawyers, or the courts.  Leaving assets to your children can be complex. Whether your children are young or old, rich or poor, married or single, you need to be aware of some important legal concepts that could jeopardize your children’s inheritance.

If your children are young, you’d better have an estate plan. If you die before your children reach the age of 18 and you don’t have a properly written Last Will and Testament, a judge will determine who will raise your children until they reach the age of 18. In addition, a judge will also determine who will control any financial assets that your children inherit, and, if any of those assets need to be spent on your children before they reach the age of 18 (for school expenses, living expenses, or for anything), a judge will have to approve each expenditure. This tutorship procedure is complicated and expensive.

If your children are married – or if they’ve been married, or even if they might get married in the future – you need to take action to protect their inheritance from their past or future divorces. You already know that many marriages these days end in divorce. What you may not know, however, is that if your children inherit from you and then get divorced, your child may have to share that inheritance with your daughter’s ex-husband or your son’s ex-wife

If you have children from a prior marriage, estate planning is a must. It’s common for children to get nothing because their step-parent receives all the assets.

Louisiana Intestate Laws–What Happens When You Die Without a Will?

You’ve probably heard stories about what happens to your assets if you live in Louisiana and you die without a Will. Maybe you heard that your entire estate goes to the government? Maybe you’ve heard that probate will take 20-30% of your estate? Perhaps you’ve heard that your children could force your surviving spouse to sell everything so that they can get their share? Perhaps you’ve heard that an administrator needs to be appointed before anything can happen?  Perhaps you’ve heard that the surviving spouse automatically inherits a usufruct over her spouse’s property and that it terminates when the surviving spouse remarries? Read on to learn what happens to your assets when you die without a Last Will and Testament.

You and Your Spouse Have Community Property

Louisiana is a community property state. In general, everything a married couple acquires during their marriage is owned one-half by each spouse, regardless of who earned it, and regardless of how the asset is titled.  There are certain exceptions to the rule that everything is owned 50-50. Assets are the separate property of one spouse if that spouse inherited the asset, was the recipient of a gift, or one spouse acquired the asset before his or her marriage. However, there is a presumption in Louisiana law in favor of community property so It is important for good records to be kept if a spouse wants his or her separate property to maintain its separate property status.

Remember that:

  • Louisiana is a community property state which means that each spouse owns one-half of all the marital assets
  • A spouse can have separate property if he or she received an inheritance, received a gift, or acquired assets before the marriage
  • Separate property commingled with community property can cause the separate property to lose its separate property status

You’re Married With Children and You Die Without a Will

All states, including Louisiana, have laws that determine what happens to your assets if you die without a Last Will and Testament. These laws are called “intestate” laws. If you have a valid Will when you die, you will have died “testate.”  Louisiana intestate laws provide that when a married person dies, his half of the community property goes to his children (the children are called naked owners), but his wife receives the usufruct of his community property until she either dies or remarries, whichever occurs first.

You’re Married and You Own Separate Property – Watch Out!

Watch out if you’re married and you own separate property. Many married people owning separate property want their spouse to benefit from their separate property. But Louisiana intestate laws provide that if a married person owns separate property when he or she dies intestate, that separate property will bypass the surviving spouse and go directly to the children.

You’re Single and You Die Without a Will

If you’re not married when you die, and you die without a Will, your assets will go to your children. If any of your children died before you, then that predeceased child’s share will go to that child’s children. If you don’t have children, your assets will go to your brothers and sisters (subject to your parents having the usufruct if they’re still alive). If any of your brothers or sisters died before you, then that sibling’s share will go to that sibling’s children.

If you die before you put certain types of Trusts into place to protect your hard earned assets and take care of your loved ones, here are some of the unintended consequences that are likely to occur, including:

  • Having to pay unnecessary estate settlement costs at death, including court fees, administrator bonds, usufructuary bonds, attorney fees, executor fees, administrator fees;
  • Having to incur unnecessary lengthy delays in the settlement of an estate due to courthouse delays, heir delays, paperwork processing delays, and disagreement among all of the parties that are involved;
  • Problems result from the public nature of a probate proceeding.  All of the family’s detailed financial and property holdings are revealed in a required family–prepared list of assets, which gets submitted on the probate public record, and on the Internet;
  • For individuals who passed away owning real estate interests in more than one state, the surviving family members will be subject to multiple probate proceedings in each state where the individual owned any interests in real estate, including mineral rights;
  • Individuals and couples wind up having to deplete their entire life savings, including their bank accounts, checking accounts, savings accounts, certificates of deposit, and all of their investments including their stocks, bonds, mutual funds, retirement accounts, annuities, and are forced to sell all of their non-home real estate to pay for long-term care costs. The only way to avoid losing your entire estate to nursing home costs is to take the appropriate legal action at least five years prior to a nursing home stay;
  • With the divorce rate rapidly rising, families who failed to plan often wind up with sons-in-law and daughters-in-law, or ex sons-in-law and ex daughters-in-law controlling the family estate;
  • With blended families now being the norm, children are often excluded from receiving a single penny due to the failure to set up the appropriate legal plans. For example, let’s say a husband and wife marry, each having their own children from a previous marriage.  If the husband, whether intended or unintended, leaves assets to his wife when he dies, the wife, who is not the mother of the husband’s children, may exclude the children of the husband.
  • Children are forcing your surviving spouse (sometimes the biological mother and sometimes the stepmother) to sell his or her house after you die. Again, the laws that apply in Louisiana when you die without planning typically favor the children over the surviving spouse.

Please know that the legal estate planning documents customized for your family to accomplish your goals by The Poche’ Estate Planning Law Firm stand for themselves and are legally enforceable and will accomplish all of your goals at your passing, regardless of the particular attorney(s) living at the time of your death.   Additionally, our Firm’s approved referral estate planning attorneys in Louisiana and other states are readily available to professionally accommodate your needs and to answer any questions that your loved ones may have.

The approved referral estate planning attorneys of Poche’ Estate Planning Law Firm are:

  • Chris Kane, Esq.—Metairie/Houma/Thibodeaux/Northshore, Louisiana
  • Jonathan Perry, Esq.—Lafayette, Lake Charles, Southwest Louisiana
  • Patrick Kirby, Esq.—Mississippi
  • Stacey Walters, Esq.–North Carolina
  • John Stevens, Esq.—Tennessee
  • Leslie Thomas, Esq.–Texas