Wills

Wills and Trusts...

Rest Easier with a Will...

Do you know what "will" the State provides (unless you write your own) - your "first" will and testament? ...what you cannot change? ...what changes you should consider making? ...how to minimize estate and inheritance taxes? ...how to plan for other contingencies: incapacity, medical emergencies, long-term care, artificial life support, avoiding probate? ...how to plan with the "living trust" or a "charitable remainder" trust?

Distribution of your property: Without a will, State law dictates how your property will be distributed after your death - it is not likely to be the way you want it to be distributed.

Administration of your estate: Unless you write a will and direct otherwise, a Court might not appoint the person(s) you want to manage the estate after your death.

What you cannot change (with a will) - you cannot give away the "forced portion" of your estate in Louisiana (either before you die or in your will). What percentage of the estate is the "forced portion" and who are the "forced heirs" who must get it? What happens if you attempt to give away too much?

How can you dispose of the rest? You might give it to your spouse, to your children, or even to a stranger. You might give certain things to certain persons (e.g., the business to your oldest son). You might name a group to share the "remainder" of your estate. You might make bequests to charity.

How to provide for your spouse: An outright gift could be problematical in a couple of ways. You might give your spouse the right to "use" certain things. You might set up a trust.

Provide for your children: Designate someone to manage the financial affairs of the children if no parent survives (e.g., Aunt Sue, the accountant). Designate someone to manage their persons (e.g., Uncle Bub).

Your executor: Designate which persons will manage the estate in probate. Give them special authority. Relieve them of the necessity of furnishing bond. Suggest an attorney to assist them.

Your residence: You and your spouse/partner own the home jointly but if one dies the survivor may not get it in Louisiana (unlike most States). Spell out your wishes in a will.

Trusts

A trust is a relationship where a certain person (trustee) holds property in his name for the benefit of another (beneficiary - there may be "principal" and "income" beneficiaries). The person who "writes" the trust is the "settlor" - it may be set up in a will (a testamentary trust) or set up before you die (a living or "inter vivos" trust).

Use of trusts

You may want your spouse to control certain assets after your death but not have them taxable as part of your spouse's estate - use a "marital trust" especially if you have children of former marriages (who may not get along with a step-parent). Same-sex life-partners can make similar plans.

You could set up a trust for a disabled child receiving governmental benefits or for a minor who might be under the custody of your ex-spouse.

The elderly could put some assets in a Medicaid trust and potentially qualify for long term care and other benefits.

To reduce a large estate and avoid tax with a "gift campaign" you might give to a trust for the benefit of your children (rather than giving to them outright). You could even "borrow" from that trust.

An "insurance trust" could own life insurance such that the face value of the policies will not be subject to tax upon your death.

The "living trust"

With a typical living trust an individual or married couple transfers their own property into their own names in trust for their own benefit, with instructions for their successor trustees to transfer the assets to their children after their death. Thus the assets would be transmitted to the children by simple transaction without the necessity of going through a Court supervised probate procedure.

Living trusts are not for everybody

Your decision as to whether any particular estate planning devices are appropriate in your particular case should be made after you consult legal counsel. We certainly do not suggest that you attempt to establish a trust without an attorney (although some popular publications might suggest that very thing).

Pour-over wills

Even with a living trust to avoid probate, any assets left out of the trust or acquired after your death (e.g., a lawsuit could be settled after you die) must go through probate and a "pour-over" will could direct them to the proper beneficiaries.