Estate Planning in Louisiana: What You Should Know Before It’s Too Late

Have you ever heard the expression, “you can’t take it with you?”

Even though it’s fun to accumulate possessions during your lifetime, what happens to all that stuff when you die? Who takes charge of your well-loved home or your favorite piece of jewelry?

You can answer that question by estate planning.

What Is Estate Planning? Why Is It Important?

Estate planning allows you to direct the distribution of your property both during your lifetime and after your death. Your estate includes all of your possessions, from the real property like homes and land to automobiles, checking and savings accounts, and insurance policies.

An estate plan allows you to speak your wishes from beyond the grave, giving direction on these points:

  • Who receives your property?
  • What property do they receive?
  • When do they receive the property?
  • What can they do with the property they do receive?

Often, your entire estate is distributed upon your death. However, young adults might benefit from waiting to receive their inheritance. Your estate plan could delay his access to the money until the age and/or purposes you chose. For instance, while you might not want your 18 year-old-son to receive a large sum of money at that age to take a year-long vacation to the Caribbean, you would be entirely supportive of his using that same large sum of money to pre-pay university tuition and fees and attend college debt-free. Also, you might want to distribute some of your estates during your lifetime for tax planning purposes.

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Who Can Do Estate Planning?

You may be able to accomplish estate planning by yourself in some states by writing an olographic will. An olographic will is one that is handwritten, signed, and dated entirely by the testator. Both Texas and Louisiana, as well as many other states, recognize and enforce olographic wills.

However, it’s always best to consult an experienced estate litigation attorney who can advise you on the more complicated aspects of tax and property law.

Many of the publicly available online estate planning templates fall short of or outright disregard the necessary legal formalities, and as such may be problematic to enforce when your family needs them most.

An estate planning attorney can help you avoid unneeded taxes and court costs that might diminish your estate while at the same time helping you avoid wasting your hard-earned money on so-called “estate planning” resources and pre-filled forms are not recognized under Louisiana law.

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When Should You Start Estate Planning?

While no one likes to dwell on human mortality, it’s always smart to have an estate plan in place. Even young adults have possessions they may wish to leave to specific people. While people who have limited possessions may not need an overly complicated estate plan, a simple document can still be useful.

One tried and true approach is to not only craft an estate plan for the possessions and persons that are in your life now but also to make the plan documents flexible enough to incorporate upcoming life changes like having a child or making a significant addition to your family without having to completely re-draft from scratch.

People who have accumulated many possessions or significant wealth may benefit from a more complex estate plan. For example, such people often see annual tax benefits by distributing their estate incrementally within their lifetime, using gifts or trusts, up to a pre-defined maximum contribution threshold.

Doing so in concert with the typical Holiday/Winter gift season is a good strategy to get some tax benefit from doing the charitable deeds you were most assuredly going to do anyway! An experienced estate planning attorney can help identify the best estate planning strategies for each individual and family.

Intestate vs. Testate Successions

When people think of estate planning, will usually come to mind. If someone dies testate (i.e. with a will), the terms of that document usually define who gets distributed what, assuming the will is, in fact, valid and enforceable.

In contrast, when a person dies intestate (i.e., without a will), the property will be distributed according to a pre-defined set of rules as defined by the state. In most cases, an intestate person’s spouse, children, or living parents are likely to inherit as intestate legatees. In intestacy, inheritance occurs in favor of the most favored class to the exclusion of other classes.

This also means that persons with an identical relationship to the decedent (think a parent with multiple children) enjoy equal rights of inheritance by virtue of those ties, without any regard for the practical nature of their relationship. The mechanical nature of intestate inheritance leaves extremely little room for planning and structuring your affairs as you desire, making the intestate succession a poor alternative to a well-crafted will and testament in almost all circumstances.

If there are no living relatives available or willing to inherit, the state of Louisiana is the inheritor of last resort and will assume possession of your estate and possessions in the place of your loved ones as designated legatee. If you don’t want the state of Louisiana deciding who gets your property, or even worse having your estate fall into the state’s coffers, contact a qualified estate planning attorney.

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Estate Planning vs. Wills

A will is a legal document that directs the distribution of your property after your death.

Wills have been around since ancient times and continue to be a popular form of estate planning today. The term “last will and testament” comes from a time when English and French law had different words for the same document. It refers to a document that outlines your final wishes for your property.

When writing a will, you usually appoint an executor to manage the distribution of your property after your death. A will must go through probate, which is the court process for settling the estate. The probate process requires court fees and slows down the estate distribution in exchange for clarity as to the actual destination.

The probate of a will can even take years in the event certain clauses and/or distributions are challenged or contested by another party. A common example is seen where the effect of a will assigns the legal ownership interest of a particular property to a person other than the one in physical possession at the time of planning or death.

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Estate Planning vs. Trusts

Trusts have become an increasingly popular form of estate planning. Trusts offer many advantages over wills. For instance, trusts protect a family’s privacy because they do not have to go through publicly disclosed probate. Also, revocable trusts can be easier to amend throughout a person’s life, giving more flexibility to estate planning.

A trust can continue to exist after your death. Some people leave assets in the trust to their children while others choose to leave the property in trust to a non-profit organization.

Trusts also allow you to appoint separate people to manage and benefit from your estate. For instance, you might name a trustee to manage the wealth in your trust for the benefit of your children. If your children are young or irresponsible, they could receive small disbursements of cash instead of a large sum at once.

One of our favorite techniques is to take the best qualities of both devices and combine them into one by crafting last will and testaments with embedded trusts incorporated into them. These “testamentary trusts” are fully enforceable under Louisiana law as long as the strict formalities required of a proper testament and proper trust are satisfied in this new hybrid document.

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To Be or Not To Be: Understanding the Importance of Non-Estate Assets

While the vast majority of estate planning understandably and rightfully focuses attention on the items that you have accumulated which compose your final estate, it should be noted that many of the most important and commonly relied upon wealth and investment devices by definition are non-probate assets and as such are not impacted by the terms of a last will and testament or intestate rights.

For these items, the specific governing contract or policy determines who inherits, usually accomplished by a Beneficiary Designation Form kept on file with the relevant bank or investment company. The most commonly deployed non-probate assets include:

  • Annuities,
  • Living trusts,
  • Traditional IRAs,
  • Roth IRAs,
  • 401(k)s, and
  • Payable-on-death accounts.

An experienced estate planning attorney can assist you with navigating how the oftentimes conflicting legal provisions can apply to different types of properties, as well as work with you to craft a plan that still meets your desires despite those legal limitations.

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What Does an Estate Planning Attorney Do?

An estate planning attorney gains an understanding of your goals for your estate by walking you through a Louisiana succession checklist. This succession checklist will help you consider possibilities for distributing your estate.

You’ll need to be comfortable sharing the details of your estate and family relations with your attorney. You should tell your estate attorney in New Orleans about your entire estate, from homes to art to stock holdings and insurance. Your attorney will also ask about any potential heirs who might have a right to contest your will.

Then the attorney helps you draft an estate plan that will accomplish your property distribution goals in the event of your death or incapacity. Your estate planning goals might include more abstract goals, such as promoting your children’s college education or encouraging your son’s happy marriage.

An estate planning attorney can help you work with different forms of estate planning. Some estate planning options used alone or in combination include:

  • Wills,
  • Trusts (revocable or irrevocable), and
  • Gifts given while you’re still alive.

Your estate planning attorney can also help you draft documents such as a power of attorney or health care directives. Your attorney will discuss these options with you and point you toward the best choices for your goals.

Estate planning attorneys help you maximize the value of your estate by avoiding unneeded taxes and court fees. Also, estate planning attorneys in New Orleans can protect your privacy and help you navigate difficult family relationships.

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What to Look for in an Estate Planning Attorney

Your estate planning attorney should be a trusted advocate who makes sure that your last wishes are carried out. An estate planning attorney must understand the legal requirements for wills and trusts in your state. A carelessly executed estate planning document might mean that your instructions are invalidated after your death.

You’ll want someone with both legal skill and compassion to help you with this important task.

You should look for the following qualifications in an estate planning attorney:

  • Someone with extensive experience in estate planning;
  • An attorney who has handled complicated estates and family relationships;
  • Someone with a detailed understanding of current tax law;
  • A person who inspires trust and listens with compassionate understanding to intimate details of your life; and
  • An attorney who understands the laws of your state and the laws of the states in which you have property.

A reputable estate planning attorney should offer you a free consultation before you sign a contract for services. The meeting allows you to evaluate the attorney’s skill and ability to listen with sensitivity to intimate details.

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Questions to Ask Your Estate Planning Lawyer

A consultation with an estate planning attorney can be an anxiety-producing experience. After all, such a meeting forces you to contemplate your death, the wealth you’ve spent a lifetime accumulating, and the family you leave behind.

It’s understandable if you deal with strong emotions when considering all these things.

So it’s useful to develop a list of questions before meeting with your estate planning attorney. Having a written list of questions allows you to focus on accomplishing your goals instead of becoming distracted by strong emotions.

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Legal Knowledge

First of all, to determine if the estate planning attorney has sufficient skill and sensitivity, you’ll want to ask questions like these:

  • How long have you been in estate planning?
  • Do you specialize in estate planning, or do you practice in other areas as well?
  • Do you have experience with comprehensive estate planning, including wills, trusts, and insurance policies?
  • What types of trust do you usually recommend: revocable or irrevocable?
  • Do you have experience drafting end-of-life documents such as a power of attorney, guardianship papers, or healthcare directives?
  • How do you monitor legislative or tax code changes that might impact my estate?

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Business Practice

To determine your attorney’s ability to assist you with efficient estate planning, you’ll want to ask about the attorney’s business procedures:

  • Will you review the estate plan periodically, or am I responsible for contacting you with updates?
  • Do you charge a flat fee or bill by the hour?
  • Do you offer a free consultation?
  • How long do you take to complete estate planning documents?
  • Will I have the opportunity to review all documents before they are finalized?

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Communication and Comfort

After meeting with an estate planning attorney in New Orleans, reflect on your experience to determine if you should contact the attorney’s services. Ask yourself the following reflective questions:

  • How comfortable did you feel with the estate planning attorney?
  • Did the attorney provide (or meet you in) a comfortable space conducive to discussing sensitive issues?
  • Did the attorney communicate well and explain the Louisiana succession checklist in a way that you understood?
  • Did the attorney use legalese and words that you couldn’t understand?
  • Did the attorney share your values and respect your priorities for passing down your estate?
  • Are you comfortable speaking with this attorney about sensitive issues related to your estate?

When you’ve evaluated your attorney’s skill as well as your comfort level, you may decide to move forward. It might never be easy to contemplate mortality, but finding the right estate planning attorney can bring great comfort.

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Necessary Estate Planning Documents

Your estate plan might contain a variety of documents, depending on the goals for your estate. Expect to encounter some of the following documents when meeting with an attorney.

Will Estate Planning Documents

Will documents provide for comprehensive estate distribution and legal decision-making. However, they may not contain the flexibility or tax-benefits of other estate planning documents. A basic estate plan often contains these will documents.

Last will and testament

This legal document controls your estate upon your death. It specifies who gets what property from your estate and includes instructions for the care of your children or pets.

Advance medical directive or living will

This directive allows people to specify wishes for their end of life health care, housing, and other key decisions in the event of their incapacity.

Power of attorney

This document authorizes another person to make important decisions or sign legal documents for you.

Trust Estate Planning Documents

When people have more complex estates or want to use strategic tax-planning, they may use trust estate planning documents.

Pour-over will

This hybrid document allows the contents of the estate to be poured into a trust at the time of death.

Revocable living trust

A living trust is created when you are alive. A revocable living trust allows you to change its terms as much as you want. Revocable trusts allow great flexibility but have distinct disadvantages. They fail to shield the person’s estate from creditors, and the trust assets are subject to federal and state taxes.

Irrevocable trust

An irrevocable trust cannot be modified by the person who creates it (the grantor). The grantor revokes all rights to control the property placed in the trust. However, this type of trust provides tax benefits, removing trust assets from the grantor’s taxable estate.

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Start Your Estate Plan Today

Give yourself peace of mind by talking to one of our experienced estate planning attorneys in New Orleans. We offer a free consultation, so you can decide if we’re the right New Orleans estate planning attorneys for you.

If you’re ready to get started, we’ll walk you through a Louisiana succession checklist and discuss your goals for your estate. Contact us today for a free consultation. We’ll make sure that your estate falls into the right hands.

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