Estate planning is a critical step for anyone. It becomes even more essential when one spouse is a non-citizen. Louisiana’s unique community property laws and federal estate tax implications further complicate the process for such families. By understanding these challenges and exploring effective strategies, you can safeguard your family’s future—while minimizing legal and tax hurdles.

At Stephenson Chavarri & Dawson, we recognize that estate planning is not a one-size-fits-all process, especially for mixed-status families. This guide covers critical considerations for non-citizen spouses in Louisiana, offering actionable insights tailored to their unique needs.

Understanding Non-Citizen Spouses in Estate Planning

Due to their legal status under U.S. law, non-citizen spouses face unique challenges in estate planning. While citizen spouses benefit from tax exemptions and simplified property inheritance rules, non-citizen spouses often encounter hurdles.

Who Qualifies as a Non-Citizen Spouse?

A non-citizen spouse is someone who is not a U.S. citizen. They may fall into one of two categories:

• Resident Alien: A non-citizen who resides in the U.S. permanently (e.g., green card holders).
• Non-Resident Alien: A non-citizen who lives outside the U.S. or does not have permanent residency.

Community Property Laws in Louisiana

Louisiana’s community property laws complicate estate planning for non-citizen spouses. Under this system, both spouses jointly own property acquired during the marriage.

However, if one spouse is a non-citizen, federal estate tax laws may impose additional limitations.

“Under Louisiana’s community property laws, both spouses may have a claim to assets acquired during the marriage, but special rules apply when one spouse is a non-citizen.”

Critical Strategies for Estate Planning with Non-Citizen Spouses

Proper estate planning can help protect your assets and minimize tax liabilities. Below are effective strategies tailored to families with non-citizen spouses.

Use a Qualified Domestic Trust (QDOT)

A Qualified Domestic Trust (QDOT) is vital for non-citizen spouses. It allows the surviving spouse to defer federal estate taxes on assets inherited from their U.S. citizen spouse.

• How it works: The trust holds inherited assets, ensuring they are distributed under strict guidelines to avoid immediate taxation.
• Why it matters: Without a QDOT, non-citizen spouses cannot access the unlimited marital deduction, potentially leading to significant estate taxes.

“Non-citizen spouses are not eligible for the unlimited marital deduction without a QDOT, making strategic estate planning essential for mitigating estate tax liabilities.”

Establish Comprehensive Wills and Trusts

Creating wills and living trusts is crucial for ensuring that assets are distributed according to your desires.

These documents also help avoid Louisiana’s intestate succession laws, which may not align with your family’s needs.

• Tip: Work with an experienced estate planning attorney to ensure these documents comply with federal tax laws and Louisiana’s unique community property rules.

Plan for Cross-Border Assets

Does your family own property or financial assets in multiple countries? It’s essential to address cross-border estate planning if so.

This ensures that assets abroad are not subject to conflicting inheritance laws.

Common Misconceptions About Estate Planning for Non-Citizen Spouses

Myths surround estate planning for non-citizen spouses. These myths can lead to costly mistakes. The following are some common misconceptions to avoid:

Myth 1: Non-Citizen Spouses Inherit Tax-Free

Many believe non-citizen spouses automatically receive the same tax benefits as U.S. citizens.

However, without a QDOT, the unlimited marital deduction does not apply, and estate taxes can be substantial.

Myth 2: Immigration Status Doesn’t Impact Estate Planning

A spouse’s immigration status can significantly influence estate planning. For instance, resident aliens may qualify for more tax benefits than non-resident aliens.

Comparison of Estate Planning Options for Non-Citizen Spouses

Understanding the legal framework surrounding estate planning is crucial. Some essential laws to consider include:

• Federal Estate Tax Laws: Non-citizen spouses are subject to different rules, such as requiring a QDOT to qualify for the marital deduction.
• Louisiana’s Community Property Laws dictate how assets are divided and inherited.
• 26 U.S. Code § 2056A: This statute governs QDOTs and their role in deferring estate taxes for non-citizen spouses.

FAQs

Do non-citizen spouses automatically inherit property in Louisiana?

No. Without a will, inheritance rights are determined by Louisiana’s intestate laws. These laws may not favor non-citizen spouses.

What is a QDOT, and why is it important?

A Qualified Domestic Trust allows non-citizen spouses to defer estate taxes on inherited assets. Doing so preserves more of the estate for the surviving spouse.

Are non-citizen spouses subject to estate taxes?

Yes. Without a QDOT, the unlimited marital deduction does not apply, and federal estate taxes may be imposed.

Can a non-citizen spouse own property in Louisiana?

Yes, but proper documentation and legal planning are required to comply with state and federal laws.

Get Help with Non-Citizen Spouse Estate Planning in Louisiana

Estate planning for non-citizen spouses in Louisiana is complex—but essential. From navigating community property laws to addressing federal estate tax challenges, thoughtful planning can safeguard your family’s financial future.

At Stephenson Chavarri & Dawson LLC., we understand the intricacies of estate planning for mixed-status families. Our experienced team is here to provide personalized guidance and help you develop a plan that meets your family’s unique needs.

“Don’t leave your family’s future to chance. Consult an experienced estate planning attorney to secure peace of mind.”

The first step toward estate planning today can make all the difference tomorrow.

Anyone who wants to protect their financial legacy and ensure their final wishes are honored after death should consider estate planning. Understanding the legal tools available, such as wills and trusts, is crucial in making informed decisions that protect your assets and your family’s future.

The skilled New Orleans estate planning attorneys at Stephenson Chávarri & Dawson LLC can lay out the best option to safeguard your heritage and protect your loved ones.

• Wills: Wills provide a straightforward way to distribute your assets upon death, specify guardians for minor children, and express your final wishes. It is subject to probate, a public and often lengthy legal process.
• Trusts: Trusts offer a more private and quicker means of asset distribution, bypassing the probate process. They can provide more control over when and how your assets are distributed.

What is Estate Planning?

Anyone who wants to manage their assets while they are still alive and have influence over how they are distributed once they pass away must engage in estate planning. It includes a range of legal instruments and tactics to safeguard your possessions, reduce taxes, and guarantee that your intentions are carried out.

Definition and Purpose

Estate planning involves legally structuring the future allocation of an individual’s estate during and after their life. Its primary goal is to ensure that the estate passes to the intended beneficiaries while considering potential tax implications and legal hurdles. Effective estate planning can prevent misunderstandings and conflicts among surviving family members and other beneficiaries.

Components of Estate Planning

Critical components of a thorough estate plan include:

• Wills: Legal declarations outlining your preferences for allocating your property and raising any minor children
• Trusts: Arrangements where one party holds the property on behalf of another, offering more control over how and when assets are distributed
• Power of Attorney: A legal instrument enabling you to name a guardian for your affairs if you are unable to do so
• Healthcare Directives: Specifies your wishes regarding medical treatment if you cannot decide for yourself
• Beneficiary Designations: Ensures specific assets are passed on to designated beneficiaries, often seen in life insurance or retirement accounts

These tools are designed to create a robust framework that protects your assets and directs their distribution according to your wishes. Each component serves a unique purpose and may be more or less suitable depending on individual circumstances and objectives.

Understanding Wills

A will, also known as a testament, allows you to communicate your wishes clearly regarding the distribution of your assets, the guardianship of your children, and the management of your estate. It becomes active only after your death and must go through probate, the court-supervised process of authenticating the will, paying debts, and distributing the estate.

Advantages of Having a Will

• Control Over Asset Distribution: Wills allow you to specify exactly how you want your assets divided and who receives them.
• Appointment of Guardians: A will is essential if you have little children because it names guardians to take care of them in the event that you pass away.
• Simplicity and Cost-Effectiveness: Creating a will is generally less complicated and expensive than setting up trusts.

Limitations of Wills

• Probate Process: Probate is required for wills, and it can be public and time-consuming. It can also incur significant legal fees and administrative costs.
• Challenges and Disputes: Wills can be contested, which may lead to legal disputes among potential heirs. This could potentially drag out the probate process and deplete the estate’s resources.

Anyone who wants to ensure that their assets are dispersed according to their last intentions after death should have a will. Wills offer a straightforward way to address many estate planning concerns, but their limitations make other estate planning tools, such as trusts, a better option for some.

Understanding Trusts

A fiduciary arrangement known as a trust permits a trustee or third party to hold assets on behalf of one or more beneficiaries. Trusts can be set up in various ways, giving trustees precise control over the timing and transfer of assets to beneficiaries.

Types of Trusts

• Revocable Trusts (Living Trusts): These can be altered or revoked during the grantor’s lifetime. They become irrevocable upon the grantor’s death.
• Irrevocable Trusts: Once established, these cannot be changed or revoked. They offer benefits in terms of tax planning and asset protection.

Advantages of Using Trusts

• Avoids Probate: Unlike wills, assets held in trusts do not go through the probate process, allowing for a faster, private transfer of assets.
• Control Over Distribution: Trusts can specify terms under which assets are released to beneficiaries, such as reaching a certain age or meeting specific educational goals.
• Potential Tax Advantages: Significant tax benefits, including reduced estate and gift taxes, can exist, especially with irrevocable trusts.

Considerations When Setting Up Trusts

• Complexity and Cost: Building trust might be more involved and costly than writing a will. It frequently needs constant management.
• Legal and Tax Implications: Trusts must be carefully structured to comply with tax laws and regulations, which may require the expertise of an attorney and a tax advisor.

Trusts offer advantages over wills in terms of control, privacy, and tax savings. They are also flexible and efficient tools for managing and safeguarding assets. However, the complexity and costs associated with trusts make it essential to consult with knowledgeable legal professionals when considering their use.

Wills vs. Trusts: Comparative Analysis

Deciding between a will and a trust is pivotal when planning your estate, as each offers distinct advantages and drawbacks. Understanding their distinctions can help you choose the right tool for your needs.

To clarify the distinctions, here’s a detailed table comparing the key features of wills and trusts:

How to Choose Between a Will and a Trust

Picking between a will and a trust depends on several factors, including:

• Estate Size and Complexity: Larger, more complex estates might benefit more from trusts due to their greater control and privacy.
• Cost Considerations: For those with more straightforward estate planning needs, the cost-effectiveness of a will might be more appealing.
• Desired Level of Control: If ongoing control over asset distribution is essential, trusts offer a better solution.

Both wills and trusts are vital tools in estate planning, each serving different needs and preferences. By assessing your circumstances and consulting with a knowledgeable estate planning attorney, you can make a well-informed decision that best suits your situation.

Contact Stephenson Chávarri & Dawson LLC 

Estate planning is fundamental to managing your personal affairs and ensuring that your assets are distributed according to your wishes. Whether you choose a will, a trust, or a combination of both, each tool is essential in safeguarding your legacy and providing for your loved ones.

Remember, estate planning in Louisiana is not a one-time task but a dynamic process that should evolve with your life conditions. Regular reviews and updates with legal advisors ensure that your estate plan remains practical and relevant.

Contact Stephenson, Chávarri & Dawson LLC to discuss your estate planning needs. 

As more of life happens online, digital assets are becoming increasingly valuable. Ensure your estate plan properly accounts for them to protect your legacy.

• Digital assets include cryptocurrency, NFTs, digital media, online accounts, and more
• Accessing digital assets can be difficult due to passwords, encryption, laws, and privacy policies
• Update your estate plan to include provisions for digital property and information
• Take steps like inventorying assets, backing up data, and designating a digital executor

Why is estate planning for digital assets important? 

Estate planning for digital assets is critical to ensure your heirs can access valuable online property like cryptocurrency, digital media, and online accounts. Without proper planning, passwords, encryption, laws, and privacy policies can make digital assets inaccessible after you’re gone.

Estate Planning for Digital Assets

Estate planning often involves careful consideration of tangible assets, from treasured family heirlooms to real estate holdings. In an era dominated by digital interaction, attention is increasingly turning towards an often-overlooked category of possessions: digital assets. With vast portions of daily life and financial activity conducted online, digital assets are accruing significant value and importance. Please incorporate these digital properties into an estate plan to avoid complications for heirs, potentially leading to inaccessible accounts or lost digital treasures.

A wide array of digital assets exists, each with its own challenges and considerations for estate planning. Among these are cryptocurrencies like Bitcoin and Ethereum, which can represent substantial financial value but require specific instructions for access and transfer. Non-fungible tokens (NFTs), which have gained popularity for their uniqueness and value, also necessitate clear estate planning strategies.

Domain names, another key digital asset, can hold both financial and sentimental value, often serving as the digital facade for personal or professional ventures. Likewise, digital photos and videos capture irreplaceable memories, yet without proper planning, they may become permanently locked away or lost.

Further complicating the landscape are digital rights to creative works, which can generate ongoing income or hold personal significance. Online accounts, from betting platforms to monetized content channels, embody financial and emotional investments. Even virtual assets, such as airline miles or online gaming avatars, can hold real-world value and merit consideration in estate plans.

Given the diversity and complexity of digital assets, crafting an estate plan that adequately accounts for these digital properties is not just advisable but imperative. Such planning ensures that heirs can access valuable or sentimental digital assets without unnecessary legal hurdles or loss. Therefore, estate planning for digital assets extends beyond traditional considerations, embracing the digital legacy individuals leave behind.

Obstacles to digital access

In the digital era, managing the transfer of digital assets posthumously presents unique challenges, with heirs often facing obstacles in accessing these valuable or sentimental digital properties. The primary barriers include:

• Passwords and Access Credentials: Digital assets protected by passwords or encryption keys pose a significant hurdle. Especially for high-value assets like cryptocurrencies stored in noncustodial wallets, the absence of a known password or key can mean permanent loss, given the lack of centralized support for recovery.
• Encryption: Digital encryption secures data across devices and cloud services, making it nearly impossible to access without the correct passcode. This technology, notably advanced in mobile devices, can lock away content permanently if not preemptively shared or stored with access in mind.
• Legal Restrictions: Laws designed to prevent unauthorized access to computer networks and protect against fraud simultaneously create barriers for family members seeking to retrieve a decedent’s digital assets. The evolving legal landscape necessitates clear permissions for fiduciaries in estate plans to navigate these restrictions.
• Data Privacy Laws: Regulations restrict online service providers from disclosing electronic communications to anyone other than the original owner without explicit consent. Without such permission, heirs may be denied access to cloud-stored emails, photos, and other content, potentially leading to expensive legal battles for access.

These challenges emphasize the importance of incorporating digital assets into estate planning, ensuring heirs can access and inherit digital legacies without undue financial or legal complications.

Upgrade your estate plan to a digital one

In the digital era, managing the transfer of digital assets posthumously presents unique challenges, with heirs often facing obstacles in accessing these valuable or sentimental digital properties. The primary barriers include:

• Passwords and Access Credentials: Digital assets protected by passwords or encryption keys pose a significant hurdle. Especially for high-value assets like cryptocurrencies stored in noncustodial wallets, the absence of a known password or key can mean permanent loss, given the lack of centralized support for recovery.
• Encryption: Digital encryption secures data across devices and cloud services, making it nearly impossible to access without the correct passcode. This technology, notably advanced in mobile devices, can lock away content permanently if not preemptively shared or stored with access in mind.
• Legal Restrictions: Laws designed to prevent unauthorized access to computer networks and protect against fraud simultaneously create barriers for family members seeking to retrieve a decedent’s digital assets. The evolving legal landscape necessitates clear permissions for fiduciaries in estate plans to navigate these restrictions.
• Data Privacy Laws: Regulations restrict online service providers from disclosing electronic communications to anyone other than the original owner without explicit consent. Without such permission, heirs may be denied access to cloud-stored emails, photos, and other content, potentially leading to expensive legal battles for access.

These challenges emphasize the importance of incorporating digital assets into estate planning, ensuring heirs can access and inherit digital legacies without undue financial or legal complications.

Final Thoughts

In an era where digital footprints are as significant as physical ones, incorporating online assets into estate planning cannot be overstated. The essence of digital estate planning transcends mere safeguarding; it’s about ensuring a seamless transition of digital assets that are increasingly integral to personal and financial legacies. By adopting a forward-thinking approach to document and secure digital property, individuals can prevent their digital assets from falling into oblivion or becoming inaccessible due to technical or legal barriers.

An essential first step is to take stock of digital assets and establish a comprehensive inventory. This process includes identifying and cataloging assets like social media accounts, digital wallets, and online repositories and securing access through meticulous management of passwords and encryption keys. Equally important is regularly backing up digital data to physical devices or utilizing hybrid storage solutions, ensuring that digital assets remain accessible even when cloud services are discontinued or compromised.

Updating legal documents to reflect the reality of digital asset ownership and management is another pivotal action. Modern estate plans must explicitly address the disposition and handling of digital assets, from cryptocurrencies to digital rights and online accounts. Designating executors with the competence to manage digital assets—or appointing specialized digital executors—can streamline the process, ensuring that assets are transferred according to the deceased’s wishes and in compliance with prevailing laws.

Moreover, legal and technological landscapes constantly evolve, making reviewing and adjusting estate plans imperative. This dynamic approach ensures alignment with new regulations, emerging digital asset classes, and changes in personal digital asset portfolios.

Proactive digital estate planning is a testament to the value placed on digital assets and their significance within one’s legacy. By taking definitive steps to integrate digital assets into estate plans, individuals can alleviate potential burdens on loved ones, ensuring that digital memories and properties are cherished and preserved as intended. The call to action is clear: act now to ensure your digital estate plan is robust, comprehensive, and reflective of your wishes.

Expert Legal Support at Stephenson Chavarri & Dawson

Navigating the complexities of digital estate planning can be overwhelming, but our experienced attorneys are here to guide you every step of the way. We’ll work with you to craft a comprehensive, up-to-date estate plan that protects both your traditional and digital assets, giving you the peace of mind that comes from knowing your legacy is secure. 

Contact us today to schedule a consultation and take the first step towards safeguarding your digital future.

Hurricane season is one of the worst times of year for residents of Louisiana. It can be a hassle for some and a devastating occurrence for others. However, a good homeowners insurance plan can make or break a homeowner’s ability to repair or rebuild their home when disaster strikes.

Home Damage Statistics for Louisiana

According to data compiled by the Louisiana Department of Insurance (LDI), Hurricane Ida was one of the most expensive hurricanes in recent years to hit Louisiana residents:

• 339,193 residential property claims were reported as of December 31, 2021.
• Total reported cost of claims totaled over $4.6 billion.
• Of the claims reported, 58% of claims were closed with payment.

Hurricanes can cost residents billions and remain open for many months after hurricane season ends.

Check your Current Policy

Homeowners should always keep updated on their policy and any new offers or services their insurance company provides. Although typical policies rarely change from year to year, any major renovations on a home or changes in occupancy may impact monthly premiums or the type of coverage offered.

A particular aspect of a home’s construction or location can also provide a homeowner with specific discounts. For example, additions like hip-shaped roofs (roofs with four or more slopes to repel high winds), shock-resistant coverings over windows, leak detection equipment, and security systems can decrease monthly premiums.

Understanding Hurricane Deductibles

Homeowners living in coastal states will have traditional insurance deductibles for property damage claims and most likely have deductibles for hurricane damage (this type of deductible is a requirement in Louisiana).

Unlike an “All Other Perils” (AOP) deductible, which covers various property damage, hurricane deductibles cover severe damage caused by hurricanes. Hurricane deductibles can range from two to five percent of a home’s value, which means if a homeowner files a homeowner’s insurance claim after a hurricane, they will have to pay for at least two percent of their home’s value in damages before the insurance company pays for the rest.

This type of deductible may seem like a lot for most homeowners. Still, because some hurricanes can completely demolish a home or render the dwelling uninhabitable for months, insurance companies will have to pay more to rebuild or repair the house.

Purchasing Flood Insurance

Most insurance policies cover extensive damage from many artificial or natural events. For example, most policies cover damage caused by wind, falling debris, fire, water, burglary, automotive accidents, and unforeseen defects. However, unless a homeowner lives in an area prone to flooding, most homeowners do not think about flood insurance until it is too late.

Unfortunately, most typical homeowners’ insurance policies do not cover damage caused by extensive flooding from weather events. Nowadays, real estate agents will provide reports of the likelihood of flooding damage to a property, or national databases can determine the chance of a property experiencing flooding. Even if a property is not necessarily prone to flooding, hurricane seasons put many “safe” homes at risk of even minor flooding damage.

Thus, homeowners should talk to their insurance adjusters about flood insurance rates and consider purchasing additional coverage. Most flood insurance policies take 30 days to commence once purchased, so homeowners thinking about buying flood insurance should not wait.

Inventory Valuable Possessions

Besides structural damage, one of the costliest results of hurricanes is damage to personal possessions. Because many homeowners’ insurance policies cover the damage costs to personal property, having an updated inventory of the personal items can save homeowners time and money when filing claims.

Because it is hard always to know what an insurance company is willing to compensate a policyholder, it is best to keep detailed records of some of a home’s most essential items. For example, homeowners may want to keep documents and photos of home appliances, workout equipment, entertainment devices, furniture, jewelry and accessories, and anything else of value.  

Keeping Your Paperwork Secure

Because hurricanes can cause catastrophic damage, homeowners should always keep paper and digital copies of the necessary documentation, including homeowner’s insurance policy information. Although losing paperwork will not void coverage, having it on hand can get a traditionally long process started quickly.

Understanding the Claims Process

When filing a claim with an insurance provider, homeowners should have a general idea of the steps in the process once they have found coverage that works for their specific needs.

• Contacting the Insurance Provider

In the aftermath of a hurricane, a homeowner should contact their insurance company as soon as possible. Likely, insurance providers with policies throughout a region that recently experienced a hurricane will be inundated with calls for assistance. The sooner a homeowner files a claim, the sooner the damage to their home will be addressed. Homeowners may also need to contact the flood insurance broker that sold them a flood insurance policy if the policy is not connected with their homeowner’s insurance.

• Documenting Damage and Loss

At this point, it is time for a homeowner to assess the damage and document loss. Homeowners that proactively cataloged their possessions will have an advantage in determining the total monetary loss of their property. Property owners should take pictures of all structural and property damage and take detailed notes of damage. Some insurance providers or third-party companies offer easy-to-use web applications to inventory all of a homeowner’s personal belongings.

• Contacting Emergency Services

Homeowners should be vigilant of their home’s surroundings. From downed power lines that could cause fires and electrocution to falling trees and broken pavement, these dangers can cause further property damage and hurt nearby residents. Contacting local emergency services and utility providers of these dangers can save a homeowner’s property and keep themselves, their family, neighbors, and emergency services personnel safe.

• Mitigate Damage When Possible

Many policies require homeowners to identify damage on a property and mitigate further damage by addressing the issue. In some cases, after a hurricane, a home can be so severely damaged or demolished that mitigation efforts may cause harm to the homeowner. However, if the damage is minimal, a homeowner should proactively mitigate further damage until repairs can be made.

Many people believe that estate planning is an activity only for people who are rich – perhaps because of the common associate of the word “estate” with a large, luxurious house. But in fact, estate planning is just a process for making clear what you want to happen to your assets after your death. Everyone with a checking account and any possessions at all should have an estate plan – and that’s virtually everyone.

Estate plans also cover your wishes should you become ill or incapacitated. Without an estate plan, loved one and friends may have no idea what your wishes are if you are ill or incapacitated in terms of healthcare provision or resuscitation orders.

The purpose of an estate plan is to make your wishes in all areas clear, so that your heirs and the legal system can carry them out. Without an estate plan, the lack of clarity may lead to ill feelings on behalf of your heirs or even legal wrangling and years of legal battles. So estate plans are also intended to promote harmony and fairness.

The lack of an estate plan may also cause the state and the courts to step in and make every determination about your affairs, including the distribution of your assets and care of your children. State and legal affairs move very slowly – and there is no guarantee that their decisions will accord with your wishes.

Estate plans are conveyed through documents everyone should know about and have. Here are the 5 most important estate planning documents.

1. A Last Will and Testament or Trust

A Last Will and Testament is the document that sets forth the disposition of all your assets after your demise. It lists all the assets and the individuals or organizations to which you want them to go.

Without a Will, no one has any way of knowing where you want your assets to go. You may always have planned to give your diamond engagement ring to your son, for instance, but without a Will stating that, he may not receive it.

Even if you’ve made that plan known to the individuals involved, your desire is not legally enforceable without a Will saying so. Other people could claim the diamond ring or it may even be sold to pay your debts, if you leave debts.

In fact, if you leave no Will, your surviving family members may not have any way to access your assets at all. Unless you have a joint checking account, your spouse may not even be able to use your account to pay monthly bills.

Not only that, but if you leave no Will, the court takes over. Dying without a Will is known as dying intestate. A court will convene and dispose of your assets, after paying off any debts or other obligations.

The process is extremely lengthy, and can take months or even years. In addition, of course, you have no way of knowing whether the court will give your assets to the individuals or organizations you wanted to receive them.

Without a Will, your heirs, family members, and friends may be drawn into emotional or even physical conflicts about your assets and even mount legal challenges against each other.

Wills must be drawn up and witnessed in accordance with state law. They must not conflict with any other legal information, such as beneficiary designations.

Trusts are often created and administered to dispose of assets instead of Wills. They can minimize taxes and legal challenges. Trusts are administered by a Trustee.

2. Beneficiary designations

Retirement plans such as Individual Retirement Accounts (IRAs) and 401(k)s often ask holders to designate beneficiaries. So do insurance plans.

For all these plans, you need to designate an appropriate beneficiary and review them periodically to ensure that they still accord with your wishes.

You and your attorney should also make sure that beneficiary designations accord with the provisions of your Will or Trust.

3. Power(s) of Attorney

A Power of Attorney gives someone you designate the power to make decisions on your behalf should you become ill or incapacitated. These can be revocable, so that the determinations revert to you once you become well enough to make decisions, or irrevocable, which stay in place.

A medical Power of Attorney gives your designee the right to make determinations about your healthcare.

A financial Power of Attorney gives your designee the right to make financial decisions, such as paying your bills or withdrawing money from your accounts to pay for medical care.

4. Letter(s) of Intent

Letters of intent lay forth your intentions for what happens upon your death. They can also give preferences for medical care.

If, for example, you want a specific form of burial, such as cremation, you can specify this in a Letter of Intent, including where you want your ashes scattered or placed.

It’s important to understand two primary points about Letters of Intent. First, they are not legally binding. The purpose is to make your family and friends aware of your wishes, but the Letter cannot force them to follow those wishes. There is no legal penalty for ignoring the wishes in such a letter.

Second, a Letter of Intent does not replace or overwrite a legally binding document such as a Will. In other words, if you want certain assets to go to certain heirs, or want your business maintained in a specific way, you need legally binding documents to enforce those wishes.

5. Guardianship designation

If you have minor children, it’s very important to set up a guardianship designation for their care should you die.

Don’t assume your spouse will automatically care for them; events such as car accidents and plane crashes may cause both you and your spouse to die at the same time.

Guardianship designations can include plans for your children’s living arrangements, their schooling, and more.

Many people also set up contingent or backup guardianship designations. Again, an accident or other event may cause the death of both you and your guardian choice. A contingent guardianship ensures an orderly plan.

If you want more information about estate planning, contact an attorney.

When a family member dies, you may find yourself dealing with not only the emotional impact of that loss, but also the complexities of succession and estate distribution. If your family member has a clear will or solid instructions involving succession, it can make it easier to decide what to do next. On the other hand, sometimes, family members may contest succession or dispute the terms of the will–or, you might not have such clear instructions to begin with. This can lead to immense emotional and financial toll for everyone involved.

Working with an experienced, compassionate law firm can help. At Stephenson, Chavarri & Dawson, L.L.C., we have extensive experience helping to resolve family disputes and ensure that succession goes the way you intended. If you’re dealing with estate distribution challenges, follow these tips.

Tip #1: Understand why disputes occur.

Typically, disputes concerning estate distribution occur for one of several key reasons. You may have a dispute because:

• Your loved one did not leave behind clear intentions regarding distribution of property. Most often, this results in a different idea of what constitutes “equal” to the family members left behind, which may lead to a significant dispute.
• Your loved one leaves an equal distribution to each family member, despite one family member stepping up and providing additional support and assistance in the final years of a loved one’s life
• One of the beneficiaries committed some act that shorted the deceased family member in some way: failing to adequately manage funds or stealing from the estate before a loved one’s death, for example.
• Your loved one leaves funds to one member of the family unequally, in a way that does not seem fair.
• One member of the family fraudulently convinced the deceased to change his will prior to his death.

Most often, disputes occur due to perceived inequality in some form, especially if the deceased does not clearly lay out his will ahead of time. By understanding the perceived inequality in estate distribution and how it may impact your loved one’s estate.

Tip #2: Know your options.

If you have a relevant dispute concerning the distribution of a loved one’s estate, you may need to take one of several available options. Start by working with an experienced estate distribution attorney. An attorney can let you know what options you have  for resolving your dispute, including:

• Going to court, if you have a reasonable and realistic legal claim to the estate.
• Settling out of court with the other party’s attorneys.
• Working with a mediator to reach a resolution.

An attorney can also provide you with a more reasonable picture of your likelihood of success in your dispute. For example, if you want to secure an unrealistic distribution when the deceased clearly laid out a will explaining what he wanted, you may have more trouble than if you look for a more equitable distribution of funds between beneficiaries when the deceased did not clearly lay out his desires and expectations.

Tip #3: Try to take emotion out of the equation.

Sometimes, it seems as though nothing brings out the worst in people quite like succession and estate distribution. You have already lost a loved one, which may leave you with significant emotional upset and a lot of factors to deal with. Factor in money and their possessions on top of that, and you may have a recipe for overflowing emotion.

Sister #1 received a large loan from Dad a few years ago and never repaid it, but receives the same distribution from the estate as other siblings, who did not take out similar loans.

Brother #1 took Mom into his home and provided her care, often out of his own pocket, for the final years of her life. Other siblings contributed little or nothing to her care. When he reads the will, it shows that each sibling receives the same inheritance.

A stepchild is named in the will just like the biological children, and the biological children want to dispute that right–or, conversely, the stepchild is not named, and wants to dispute the terms of the will.

Each party may feel that they have a valid claim, but everyone cannot have what they want. When looking for a resolution, try to take emotion out of the equation. Be as logical as possible when disputing the distribution of assets and trying to reach an equitable arrangement. Sometimes, you will find that you can reach a reasonable agreement, but you have to manage your decision mindfully, and not respond out of anger. Working with an experienced estate attorney can make that process easier. An attorney has no emotional investment in the distribution of the will, so he can lay out your options more clearly and give you a better idea of what you should expect in the state distribution process.

Tip #4: Contact an attorney as soon as possible.

If you know or suspect that there will be a dispute regarding succession or estate distribution, get in touch with an attorney as soon as possible. An attorney can give you a better idea of your legal rights, help lay out your options, and support you throughout the process. Often, attorneys can help act as mediators, removing the emotion from the process and providing you with a better assessment of reasonable options for settling your dispute.

Tip #5: Try not to let estate disputes happen in the first place.

One of the first lines of defense when it comes to estate disputes is setting out a solid will in the first place, ideally as early as possible. If you know that you have an elderly loved one who needs to put a will together, advise your loved one to take care of those challenges as soon as possible. If you have specific desires for the distribution of your estate–or even if you don’t–consider setting up your will as soon as possible. Work with an attorney to ensure that you have all the details handled legally and appropriately.

Do you need an experienced estate distribution attorney? Contact Stephenson, Chavarri & Dawson, L.L.C. today at 504-523-6496 to learn more about your rights.

No matter what the situation is, getting a divorce is never an easy ordeal. Whether it was a mutual decision between you and your spouse or it was a decision that was sprung on you, when you are going through the divorce process, there are several things you need to do in order to make sure you are prepared.

That is why in the below guide, we will walk you through Louisiana’s laws regarding divorce and provide you the steps you need to take to ensure that your interests are protected. 

Division of Your Marital Property and Assets

Louisiana is a community property state. This means that all debts and property obtained during the marriage are considered marital property and owned together. Consequently, in a divorce, all these assets and debts need to be divided in half. However, before this happens, there needs to be a determination made about what actually constitutes marital property.

Community Property

Community property is typically any property owned by a married couple. Usually, this includes:

• Property that is obtained during the existence of the marriage through skill, effort, or industry of either or both spouses
• Property that is obtained with community and separate things but the value of the separate things is inconsequential to the value of the community things used
• Property that is obtained with the couple’s community things
• Property that has been donated to the spouses jointly
• Civil and natural fruits of the community property
• Any damages for a loss or injuries to an item belonging to the community 
• Any other property that is not classified as separate property

Separate Property

In comparison, a spouse’s separate property is theirs exclusively. This usually includes the following:

• Property obtained by a spouse before the marriage
• Property obtained by a spouse with community and separate things when the value of the community things is inconsequential to the value of the separate things used
• Property that is obtained by one of the spouses with separate things 
• Property obtained through donation or inheritance by only one of the spouses
• Damages that are awarded explicitly to one of the spouses
• Items that have been acquired by one of the spouses as a result of a voluntary partition of community property 

Basically, most assets accumulated during the marriage are considered marital property, including retirement assets and pensions. However, inheritance or gifts directed to one spouse are usually not regarded as marital property and should not have to be divided up as part of the divorce.

Protecting Your Interests

Determining which property is considered marital property or separate property can be a complicated process. That is why it is critical that before you file for divorce that you take some time and get all of your paperwork and documents in order to help simplify this division and protect your interests.

Consider the following steps:

Gather Critical Documents

You will want to gather all the critical documents and reports that can help show the extent of your marital property and your separate property. This includes gathering and identifying your expenses, income, and any other documents associated with your financial accounts, retirement accounts, credit card accounts, car titles, property deeds, and all of your joint income tax returns. 

Write Out a Timeline

Next, you should prepare a marriage timeline or rather a detailed list of the important dates and events that occurred during your marriage. This list can include:

• Purchases of property, including vacation homes or rental properties
• Purchases of large items such as motor vehicles, jewelry, and even artwork
• Dates where you moved to different houses 
• Dates of when your children were born and whether either spouse took time off work to care for the children 
• Whether a spouse received an inheritance or gifts from family members that passed away
• Jobs each spouse held during the marriage 
• List of everything you own 
• List of debts that you owe, including loans and credit cards

In Louisiana, disclosing all assets is an essential part of the divorce process. That is why writing down these details can help you have a clear, accurate, and complete accounting of all your assets. This can ultimately help ensure that an even split of your marital assets happens during the settlement process.

Open Up a Separate Account

Another good idea is to open up a separate bank account. This is not for the purpose of hiding funds, as you will have to disclose all of your bank accounts and credit cards in your name when filing for divorce. Rather this is to help ensure that you have funds available and a way to protect yourself from your spouse emptying your joint account or freezing your joint funds. 

Be Careful What You Say

Unfortunately, as you prepare to file for divorce or are going through the process, your life will be heavily scrutinized. Every action you take can be used against you and complicate your case. That is why during this time, you need to be careful what you say about your divorce, who you discuss your divorce with, and make sure you do not post any information about your divorce on your social media accounts.

Work with an Experienced Family Law Attorney

Working with an experienced and knowledgeable family law attorney can be extremely beneficial during this complicated time in your life. These attorneys can provide you the legal advice you need, help you go after everything you deserve to receive during the divorce, handle any complicated issues that come up, and make sure you avoid any costly mistakes.

If you are considering divorce, do not wait any longer. Contact Stephenson, Chávarri & Dawson today, or call our firm at 504-523-6496. Divorce is stressful enough. You should not have to worry about all the legal complexities involved with this process. Instead, let our legal team take care of the legal issues while you focus on taking care of yourself and your family. 

The most recent PwC U.S. Family Business Survey (2019) found that 58 percent of respondents had succession plans, but the vast majority of them were informal. If you don’t engage in proper succession planning for your family business, you risk your family and others involved in your business engaging in heated arguments that can lead to expensive legal proceedings. Additionally, family business conflicts sometimes play out in the local media, which can hurt sales when loyal customers take sides.

Below we provide five important steps to a successful family business succession plan so you can rest assured a smooth transition occurs if you become incapacitated or pass away, or you are ready to sail off in the sunset towards retirement.

1. Collect Information

Preparation is the key to a successful family business succession plan. Before you begin planning, you need to collect relevant information to share with your estate planning attorney. This might also include enlisting the help of accountants and financial advisors. Not only does this provide your lawyer with the things they need to help you plan, but it also provides an opportunity to get your personal and business records organized and implement a system to keep them organized and up to date. Examples of documents you will need for business succession planning include:

• Current business governing documents
• Related party contracts
• Vendor contracts
• Any estate planning documents that can impact governance, ownership, or succession of your business

2. Get a Current Valuation of Your Business

For a successful family business succession plan, you need a reliable valuation of your business. This includes an assessment of each family business entity and all business assets. If you do not yet have a current valuation, your estate planning lawyer can help you obtain one. In fact, getting an attorney involved in the valuation of your business can help avoid major mistakes during the planning process. If your attorney helps you with a succession plan and starts with a faulty valuation, it follows that everything that relies on that valuation will be inaccurate.

Your family business succession plan can also benefit in other ways by obtaining a current business valuation. As you go through the valuation process, information about the strengths and weaknesses of your business will emerge. This gives you the opportunity to improve your operation and increase profits. The valuation professional can also help your lawyer draft the best language for your buy-sell agreements. Finally, establishing a relationship with a valuation professional allows you to more easily get updated valuations on a regular basis, allowing you to update your buy-sell agreements and other aspects of your plan as needed.

3. Choose Who You Want to Take Over

Arguably, one of the most important aspects of a successful family business succession plan is choosing which child will run the business, or whether multiple children will share the responsibility. You and your children might have assumptions about who will take over, but it’s important to spell these things out ahead of time to avoid difficulties in the future. It’s highly likely the child or children you intend to take over the family business already play a large role in your organization.

To ensure success, you need to spend time early in the planning process working with your attorney to address any potential business interruptions that might occur as a result of the sudden death or incapacitation of any family members who currently play a key role in your business, and will continue to play a key role once you’re gone. For example, you should ensure the right parties have updated powers of attorney for voting by designating a “transfer-on-death” beneficiary to avoid probate delays. You should also have measures in place to replace the chief executive if he or she exits the business unexpectedly. By the time your succession plan is complete, these business structures will be more permanent.

4. Create Rules for Governance and Ownership

Before making any transfers of ownership, your estate planning lawyer needs to help you develop the rules that will regulate governance, ownership, and owner exits after succession has been implemented. This includes rules in four main areas: unit voting, governing board, executive authority, and beneficial ownership.

• Unit voting refers to the power to exercise voting rights as an owner by appointing and removing board members and approving or rejecting major transactions.
• Governing board rules includes deciding who sits on a board and how those members will be elected to deal with top executives, oversee budgets, issue dividends, and other board duties.
• Executive authority refers to rules for owners and board members with regard to making decisions about appointments, titles, duties, and compensation.
• Beneficial ownership includes family members who get profits from the business but do not hold an employee role. You must make decisions about whether family members should own shares or whether shares should be held in a trust, as well as other issues related to the acquisition and ownership.

5. Update Your Estate Plan

Prior to transferring control and implementing your family business succession plan, you need to update your estate plan with all the decisions made above. This typically includes adding wills and revocable trusts in accordance with any governance decisions made such as allocation of voting rights, allocation of business equity, and allocation of other personal assets. You should also include instructions for the use of life insurance proceeds and how estate taxes should get paid. Additionally, if you plan to leave any assets to charity, you need to include that information in your estate plan.

Contact an Experienced Estate Planning Attorney to Create Your Family Business Succession Plan

The experienced estate planning attorneys at Stephenson, Chávarri & Dawson have helped numerous family businesses plan for succession. We help clients collect the needed information to draft legally-binding documents to ensure succession goes smoothly when senior owners retire, pass away, or become incapacitated. Contact us today online or at 504-523-6496 to discuss your family business succession plan with a member of our skilled legal team.