Louisiana Irrevocable Trusts Explained: Irrevocable trusts are living trusts that are created during the grantor’s (or settlor’s) lifetime and which cannot be changed or revoked like a revocable trust. They are essentially contracts with yourself. A trustee is appointed to manage the assets on behalf of the beneficiaries. While grantors often appoint themselves as the initial trustee in revocable trusts, they lose many of the benefits of an irrevocable trust if the trust is “self-settled”. Thus, a third-party trustee should be appointed. The purpose of an irrevocable trust is to move the assets from the grantor’s control to that of
Category: Estate Planning
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Louisiana Revocable Trusts Explained: A revocable trust is a type of living trust that you can create during your lifetime and as such is an important estate planning tool. It is essentially a contract reflecting an agreement regarding the passing of property from one to another. The grantor (or settlor) maintains ownership and full control over the assets in the revocable trust while he or she is still alive. Per La. R.S. 9:2022, “reservation of the right to revoke includes the right to modify the trust.” Per La. R.S. 9:2042, “a reservation by the settlor of the right to revoke
Louisiana Testamentary Trusts Explained: A trust is a legally binding document created by a grantor (also known as a settlor or trustor) that holds assets for beneficiaries. A trustee is appointed and is responsible for managing the trust assets and proceeds in accordance with the terms set by the grantor. A “testamentary” trust allows the grantor to transfer ownership of their property to the trust upon their death. Per La. R.S. 9:1733, “[a] trust is testamentary when it is created by donation mortis causa.” This is in contrast to a living trust which becomes effective immediately. Testamentary trusts are created
Louisiana Living Trusts Explained: A trust is a legally binding instrument between a person creating the trust (the grantor) and the person or entity managing the trust and its assets (the trustee). A grantor may also be referred to as a settlor or trustor. Like a will, a trust has beneficiaries, who under the terms of the trust, will receive certain assets from the trust. A “living” trust (also called an “inter vivos” trust) allows the grantor to transfer ownership of their property to the trust during their lifetime. This is in contrast to a testamentary trust which does not
What is Domicile and How Does it Affect Estate Planning? Moving from one state to another is a significant life event. It should include careful planning and attention to tax details. Louisiana does not have a state inheritance or estate tax. This differs from many other states that do impose a state level estate tax, which in many instances is in addition to the federal estate tax. If you have moved to Louisiana from another state, you may be able to eliminate the state death or estate tax from your prior state. To do so, you must establish Louisiana as
When to Update a Power of Attorney: A power of attorney (POA) is an important legal tool. It is commonly used for estate planning, medical management, financial management, and real estate transactions. A POA should be reviewed every few years for possible updates. It may become necessary to update a power of attorney when life situations change, a new agent is needed, or when there are changes in the law. You have the right to amend or revoke a power of attorney any time, and doing so is a relatively simple process. Reasons to Update a Power of Attorney: There
Why You Should Have a Digital Estate Plan: Estate planning has expanded beyond the traditional scope of wills, trusts, and powers of attorney. In modern times, significant part of our lives exists digitally. Your traditional estate plan likely does not account for what happens to your digital assets after death. A digital estate plan comes into play as a method for organizing your online information. Creating a digital estate plan provides access to information that your family can use to carry out your final wishes. When your loved ones can rely on a written plan that outlines the passwords for
Louisiana Special Needs Trusts Explained: Special needs trusts (SNTs) play a crucial role in the lives of loved ones with disabilities. The primary benefit of a special needs trust over a typical testamentary trust or living trust is that it won’t disqualify the beneficiary from certain government benefits, such as Medicaid or Supplemental Security Income (SSI). However, navigating the legal intricacies of setting up a special needs trust can be complex, especially given the unique trust laws and regulations of each state. Medicaid and SSI are needs-based government benefits that have specific income and asset requirements that change each year.
Naming a Tutor in your Will is a Crucial Step: It’s difficult to think about the situation where a young child loses both of his or her parents, but this is the time when a tutor would step in to take care of the child. Naming a tutor is often overlooked when preparing a last will and testament, especially when someone writes their own will. In many instances though, naming a tutor is the main reason for writing a will. It is not uncommon for someone’s final wishes to coincide with the default laws of intestacy. For instance, perhaps a
Why Having a Last Will for Separate Property is Crucial: It is common for married couples to acquire property prior to the marriage. This property is considered separate property. Because the order of succession is different for community property and separate property, it is imperative to know what will happen to your property if you die without a last will and testament. Often times, the intestate laws are in direct conflict with the actual wishes of the property owner. When that is the case, you should strongly consider creating a will as part of your estate plan. Classification of Property: