Don’t be so afraid of probate
BY THEUS LAW OFFICES
The word “probate” (or “succession” in Louisiana) may conjure images of lengthy delays waiting for wealth to be transferred and bitter disputes among family members. Plus, probate records are open to the public, so all your “dirty linen” may be aired. The reality is that probate doesn’t have to be so terrible, and often isn’t, but both asset owners and their heirs or legatees should know what’s in store.
In basic terms, probate is the process of settling an estate and passing legal title of ownership of assets to heirs. Probate is required with a will-centered plan (versus a trust-centered plan). Think of a Last Will and Testament as a gift that takes effect at death. Because a will only becomes effective at death, you can change it at anytime while you are alive (and have mental capacity). If a deceased person has a valid will, probate begins when the executor named in the will presents the document in the parish courthouse. If there’s no will — the deceased has died “intestate” in legal parlance — the court will appoint someone to administer the estate. Thereafter, this person becomes the estate’s legal representative.
Probate is predicated on state law, so the exact process varies from state to state. As with most things legal, Louisiana is a little different. This has led to numerous misconceptions about the length of probate. On average, the process in Louisiana takes six to nine months, but it can run much longer for complex situations, or if you have an “uncooperative” or disgruntled legatee in the mix, or a dispute erupts.
Planning to avoid probate
Certain assets are automatically exempt from probate, like life insurance, retirement plans, usufruct property, or property already in a trust, which we refer to as “non-probate assets” — in legal parlance. All other assets, such as your home or an investment account, are considered “probate assets.” If you have any probate assets, you can avoid the probate process with additional planning. The best way to do this in Louisiana is through a living trust, which is just a trust that you establish while you are alive.
In other states, a common way to avoid probate is through a form of ownership called “joint tenancy with right of survivorship,” whereby the jointly owned property automatically passes to the surviving joint tenant on the death of the tenant. Unfortunately, Louisiana does not recognize the concept of joint tenancy with right of survivorship, whether for investment accounts, land, or otherwise.
As such, a revocable living trust is really the only way to avoid probate and protect privacy in Louisiana. The assets transferred to the trust, managed by a trustee, pass to the designated beneficiaries on your death. Thus, you may coordinate your will with a living trust, providing a quick transfer of wealth for some assets. You can act as the trustee and retain control over these assets during your lifetime.
Achieving all estate planning goals
When it comes to probate planning, discuss your options with family members to develop the best approach for your personal situation. Also, bear in mind that avoiding probate should be only one goal of your estate plan. We can help you develop a strategy that minimizes probate while reducing taxes and achieving your other goals.
Theus Law Offices specializes in a complete range of estate planning and elder law services, including wills, trusts, probate, successions, estate administration and probate litigation. If you need a Louisiana wills and trusts lawyer or succession attorney in Alexandria, Lafayette, Lake Charles, Baton Rouge, New Orleans, Shreveport, Monroe, or elsewhere in Central Louisiana, let our certified estate planning specialist and probate lawyers help you.