Not surprisingly, since most of us here at Epilawg are licensed to practice law only in Minnesota, we generally write about most topics from a Minnesota law point of view. Oftentimes, though, many laws having to do with estate planning tend to be similar among the states, with deviations here and there, which is why it is always important to speak with a licensed attorney in your specific state.
One of the deviations I am aware of has to do with the state of Louisiana. When I meet with Minnesota clients to review the terms of their Wills, I always let them know that while the Will will be governed by Minnesota law, if they move to other states, their Wills will be honored. . . with the exception of Louisiana. If clients are considering a permanent move to Louisiana, then they should be prepared to meet with an attorney in Louisiana to have their Will reviewed and then possibly updated.
The big reason for this deviation has to do with forced heirship. In Louisiana, its law states that “[f]orced heirs are descendants of the first degree who, at the time of the death of the decedent, are twenty-three years of age or younger or descendants of the first degree of any age who, because of mental incapacity or physical infirmity, are permanently incapable of taking care of their persons or administering their estates at the time of the death of the decedent”. So, in general, Louisiana residents must leave a portion of their estate to their children who are under the age of 24 (the child could be 23, 11 months and 29 days and still be considered a forced heir).
The law goes on to state that if a decedent makes a Will, then the estate will be divided between any forced heirs and whomever else the decedent named via a Will (like their spouse, for example). Otherwise, if no Will is made, then the decedent’s property will be inherited by the decedent’s children only, with a life estate (known as a usufruct in Louisiana) in certain property to the decedent’s spouse. Any portion that does not pass to the forced heir (for example, because the decedent had no children or all predeceased) will fall into the disposable portion. The disposable portion is then distributed in accordance with Louisiana’s intestate laws or the decedent’s Will.
Below is the calculation to give the starting value of the decedent’s estate for purposes of dividing it between the forced portion and disposable portion:
· Calculate the value of the decedent’s entire estate
· Subtract any insurance policies, retirement benefits and estate debts
· Add back in the value of any lifetime transfers made within three years of the decedent’s death
· If the decedent has only one forced heir, that heir will be entitled to 25 percent of the estate. Everything else will pass per the terms of the decedent’s Will. If the decedent has more than one forced heir, the forced heirs will receive half of the estate and the disposable portion will receive the other half.
Any life insurance proceeds or qualified retirement benefits paid to the forced heirs will count toward satisfaction of the forced portion. Any unsatisfied amounts will be paid from the assets of the decedent’s estate.
For more details on this concept, be sure to contact an attorney licensed in Louisiana.
