RECENT CHANGES IN LOUISIANA WILL, SUCCESSION AND …

1 2001 KEAN MILLER HAWTHORNE D ARMOND McCOWAN & JARMAN, LLP579169_1 RECENT CHANGES IN LOUISIANAWILL, SUCCESSION AND trust LAWbyCarey J. MessinaBoard Certified Tax AttorneyBoard Certified Estate Planning and Administrative SpecialistKean Miller Hawthorne D Armond McCowan & Jarman, O. Box 3513 Baton Rouge, LA 70821-3513(225) 387-0999 SUCCESSION LAW CHANGES1. Civil Code Articles 870, 1484 and 1611 When LOUISIANA 's forced heirship lawwas changed in 1996, 9:2501 was adopted and was amended several times. Thepurpose of 9:2501 was to determine the "intent" of the testator by certainlegislative means as to whether the forced heirship law would apply or not.

2 :2501 has been repealed in its entirety. The new rule is to basically look at the lawin effect at the time of the testator's death. However, when a testament uses a term thelegal affect of which has been changed after the date of execution of the testament, thecourt may consider the law in effect at the time the testament was executed to ascertainthe testator's intent and the interpretation of the legacy or other testamentary Civil Code Article 395 A judgment of interdiction removes the capacityof an interdict to make a donation inter vivos. Code of Civil Procedure Articles 3396 - LOUISIANA has nowadopted laws which will allow for the independent administration of a testator will now be allowed to designate an independent executor under his WILL, or in the case of an intestate SUCCESSION , the heirs may approve the appointment of anindependent administrator.

3 What this means is that the executor or administrator willnot have to apply for court authority to do such things as sell stocks and bonds, sellimmovable property, enter into leases, enter into settlements and compromises, or toget court approval for other actions. This is very beneficial and you may be seeingexecutors giving you their letters testamentary or letters of administration indicatingthat there is an independent administration. Civil Code Article 1521 The current survivorship provision with respectto taking a legacy is 90 days. The 90-day period has been increased to six will now coincide with the six-month period which is permitted under federal taxlaw.

4 -2- 2001 KEAN MILLER HAWTHORNE D ARMOND McCOWAN & JARMAN, Code of Civil Procedure Article 3061 Judgments of Possession arerequired to include the last known address of at least one of the heirs or legatees or thesurviving spouse, as the case may be. The failure to include the address of at least oneof the heirs or legatees or the surviving spouse shall not affect the validity of thejudgment. Civil Code Article 965 The default provision regarding accretion oflapsed legacies when a legatee renounces a legacy has been changed to provide thatthe renounced legacy will now pass to the persons who would have received thelegacy if the legatee had predeceased the decedent instead of providing that therenounced legacy passes to the descendants by roots of the legatee.

5 Revised Statute 9 A new provision regarding the partition ofcommunity property has been added to provide that when federal law or the provisionsof a statutory pension or retirement plan, state or federal, preempt or precludecommunity classification of property that would have been classified as communityproperty under the principles of the LOUISIANA Civil Code, then the spouse of theperson entitled to such property shall be allocated or assigned the ownership ofcommunity property equal in value to such property prior to the division of the rest ofthe community property. Civil Code Articles 1617 through 1626 The grounds for disinherison offorced heirs have been reenacted.

6 These provisions were inadvertently deleted whensome of the rules regarding forced heirship were changed previously. Article 1621provides the following causes for disinherison by child has raised his hand to strike a parent or has actually struck a parent,but a mere threat is not child has been guilty towards a parent of cruel treatment, crime orgrievous child has attempted to take the life of a child, without any reasonable basis, has accused a parent of committinga crime for which the law provides that the punishment could be lifeimprisonment or child has used any act of violence or coercion to hinder a parent frommaking a child, being a minor.

7 Has married without the consent of the parent. child has been convicted of a crime for which the law provides that the-3- 2001 KEAN MILLER HAWTHORNE D ARMOND McCOWAN & JARMAN, LLP579169_1punishment could be life imprisonment or child, after attaining the age of majority and knowing how to contact theparent, has failed to communicate with the parent without just cause for aperiod of two years, unless the child was on active duty in any of the militaryforces of the United States at the time. Code Article 2347 The concurrence of both spouses is now required for thealienation, encumbrance, lease or harvest of community Civil Code Article 938 and LOUISIANA Revised Statute 9:2502 Asuccessor is permitted to exercise rights of ownership with respect to his interest ina thing of the estate as well as his interest in the estate as a whole at any time prior tothe qualification of a SUCCESSION representative.

8 If a successor exercises his rights ofownership after the qualification of a SUCCESSION representative, the effect of thatexercise is subordinate to the administration of the estate. The provisions of this newlaw are intended to be remedial and any action to annul an alienation, lease orincumbrance of immovable property owned by the decedent at his death and made bysuccessor prior to the appointment of a SUCCESSION representative must be broughtwithin a preemptive period of one year from the effective date of the change in thelaw. SELECTED REVISIONS TO THE LOUISIANA trust Revised Statute 9:1783 (A) 2 Financial institutions and trust companieswhich are authorized to exercise trust or fiduciary powers under the laws of Louisianaor the United States can be trustees of LOUISIANA trusts.

9 Revised Statute 9:1784 A trustee who accepts a LOUISIANA trust submitsto the jurisdiction of the courts of the State of LOUISIANA . Revised Statute 9:1789(A) A trustee shall be removed in accordance withthe provisions of the trust instrument or by the proper court for sufficient cause. Revised Statute 9:1789(B) A corporate trustee shall be removed uponthe petition of the settlor or any current beneficiary, if the court determines thatremoval is in the best interest of the beneficiaries as a whole, another corporate entitythat is qualified to be a trustee has agreed to serve as trustee, and the trust instrumentdoes not forbid such removal.

10 Revised Statute 9:1961 The requirement that a trustee of a "spray trust "exercise the discretion of an average reasonable man has been removed. Revised Statute 9:2026 (2) The proper court may order the terminationor modification of the trust if the market value of the trust is less than $100, , andin relation to the cost of administration of the trust , the continuance of the trustunchanged would defeat or substantially impair the purposes of the trust . The market-4- 2001 KEAN MILLER HAWTHORNE D ARMOND McCOWAN & JARMAN, LLP579169_1value amount was increased from $25, to $100, Revised Statute 9:2030 The combination of two or more trusts is nowpermitted in certain situations.