People with simple estates do not always need robust estate plans. Often, a simple will is enough to satisfy heirs and protect the estate from intestacy. However, what works for a simple estate will not work for every estate. For many residents in Louisiana, a revocable living trust could facilitate a more efficient succession. When you need a trust and a will

Deciding if a Trust Is Right for You

A trust is a legal entity that can receive, own, and manage a variety of assets, including real estate, automobiles, and art collections. While trusts serve a variety of purposes, they are often used to:

  • Condition inheritances
  • Reduce an estate’s tax liability
  • Protect personal and business assets from third-party claims

Most people establish trusts to avoid probate, the rigorous process of formally dissolving an estate. During probate, the estate’s authorized representative—the executor or personal representative—petitions a Louisiana probate court to initiate succession. Once succession begins, the executor inventories the estate’s assets, pays its residual debts, and disburses gifts to heirs and beneficiaries.

Small Successions Without a Trust

Probate can be an expensive and time-consuming undertaking. However, Louisiana law permits the “independent administration” of many estates—provided that the deceased person elected for an independent administration in their last will and testament.

Louisiana also allows qualifying small successions to essentially circumvent the need for court administration if:

  • The estimated value of the decedent’s assets is $125,000 or less
  • The decedent died intestate, or without a will
  • The presumed beneficiaries agree on the terms of their respective inheritances

Independent administration and small successions do not require either substantial court oversight or the payment of any exorbitant filing fees. Louisianans with relatively simple estates may still need to consult an experienced estate planning attorney to ensure their legacy remains protected. However, they do not necessarily have to establish a trust to avoid probate.

When to Consider a Trust

Since Louisiana law allows most residents to circumvent probate in its entirety, trusts are often used to counter other potential threats to an estate’s integrity. Some of these threats are unique to Louisiana.

The Bayou State, for instance, mandates “forced heirship” under certain circumstances. In general, a forced heir is a child, under the age of 24, of a deceased person who is incapable of caring for themself due to physical or mental incapacity. Forced heirs are typically entitled to a significant portion of an estate, even if they were disinherited by the decedent’s will. A revocable living trust allows its founder to restrict forced heirship by transferring assets to the trust’s possession.

A trust can also be used to:

  • Privilege children. A parent might consider establishing a trust if they have re-married and have children from a prior marriage. Since Louisiana’s intestacy laws privilege spouses and other close blood relations, the re-married partner might wish to found a trust to ensure their biological children receive assets that might otherwise be inherited by the surviving spouse.
  • Condition inheritances. Louisianans with comparatively complex or high-value estates might wish to establish a “testamentary trust,” which restricts a minor child’s ability to access trust funds. A testamentary trust could allow funds to be distributed exclusively for necessary health, education, and maintenance expenses. Only once the child reaches a specified age will they receive the entirety of their inheritance, minimizing the chance that they might squander the trust’s resources before they mature.
  • Preserve privacy. Probate and succession proceedings take place in court and are, therefore, a matter of public record. While independent administrations and small successions usually occur outside of court, any challenge or contest could result in protracted and highly publicized litigation. A revocable living trust, therefore, affords families greater privacy in the event of any inheritance-related disputes.

Contact an Experienced LA Estate Planning Attorney

Every estate is different. If you are trying to determine how best to preserve your legacy, please call Scott Vicknair at 504-264-1057 to schedule your initial consultation.