Probate/Succession is a legal process for settling an estate according to the will of the deceased. The deceased’s taxable estate is made up of all of the assets in which he or she holds an interest at the time of death, but only assets held individually in his or her name will generally have to go through probate.
The probate/succession process varies by state—many states offer a quicker, less expensive option if the assets subject to probate/succession are below a certain value. In Louisiana, if the Decedent owned only real, immovable property, valued at less than $125,000, then heirs can use the Affidavit of Small Succession provided for in LA. CODE CIV. PROC. ANN. art. 3432 and/or 3432.1 (2017).
Probate/Succession is also public record, so it decreases the level of privacy of the estate. In Louisiana, there is a statute which allows the Executor or the heirs to request that the Detailed Descriptive List be sealed, whereby making the assets of the Estate not subject to public record.La. C.C.P., Art. 3396.18(B), enacted in 2017 provides: “The Detailed Descriptive List shall be sealed upon the request of an Independent Administrator, heir or legatee.” (emphasis added). Acts 2017, No. 198.
Some assets, such as retirement accounts (IRA’s adn 401k’s), allow for the naming of beneficiaries and, therefore, may transfer to beneficiaries without going through the probate process.
When someone passes away without a will or intestate, assets pass to heirs at law via the succession process according to state intestacy laws.
There may not be much you can do to avoid going through probate/succession once a loved one has passed away, but it helps to understand the process as you work with an attorney or tax advisor.
Which assets pass through probate/succession
Generally speaking, any asset that allows the owner to name a beneficiary will not have to go through probate/succession, including most assets once they are placed in trusts. The following gives a general idea of which assets are and are not usually subject to probate/succession in Louisiana in the most common scenarios.
Usually subject to probate:
Cash, cash accounts
Personal property, including valuable items
Assets that allow naming of beneficiaries, but for which none
have been named
Not usually subject to probate:
Accounts that allow for the naming of beneficiaries (IRAs,
401(k)s) *can be subject to a forced heir claim*
Trusts, including assets placed in trusts that might otherwise
have to go through probate (cash, real estate)
Insurance policy proceeds *not subject to the claims of forced heirs*
*Louisiana does not recognize TOD (transfer on death) accounts. Due to this, any assets in a TOD account should go through probate/succession. Even if a bank recognizes TOD account beneficiaries and makes a disbursement to the TOD account’s named beneficiaries, heirs and legatees may still have a claim against the TOD beneficiary.*
This means, for the assets not usually subject to probate, if you are a named beneficiary you will likely be able to assume ownership sooner and may save money on court costs and attorney fees.
It’s important to note that, generally, even if a named beneficiary conflicts with information stated in the will, the named beneficiary will still receive the assets over the individual named in the will. However, if the person named in the will is a forced heir, the forced heir claim could prevail over a named beneficiary’s claim.
Other laws that vary from state to state may apply and dictate how the assets transfer. If there is any doubt associated with the beneficiary, the question is resolved through the probate process.
As always, you should discuss your specific situation with your attorney or tax advisor.
The impact of probate/succession
Because every inheritance is different, it’s hard to predict how much probate/succession will cost and how long it will take. The cost will vary by the size and makeup of the estate, the laws of the state in which the deceased lived, and the will (if there is one and how it was written).
Probate/Succession costs can include:
• Last expenses associated with death: hospital stay, doctors, ER visit, funeral costs, etc.
• Court fees
• Appraisal and valuation fees
• Account fees
• Fees paid by the executor
• Your attorney’s fees to represent you in the process