Estate Litigation in Louisiana
Serving Clients Throughout the Bayou State
Estate and Trust Litigation
Let’s face it. Sometimes Louisiana residents fail to plan. A failure to plan is a plan to fail. But what can be even more shocking is that a poorly drafted estate plan can give a false sense of security. A poorly drafted plan can invite litigation, can often prompt years of heartache for surviving family members, and involve unnecessary legal fees and expenses after death. Estate and trust litigation can drag on for many years.
I am often asked by my clients: How can I avoid litigation after death? On the other side, I am asked by others: How can I challenge an estate plan drafted incorrectly? Here are some major points that should be considered by each client when considering estate litigation.
Will and Trust Formalities
In Louisiana, a Last Will and Testament can be of two (2) kinds. The first is a “statutory will”. A statutory will is one that is executed before a Notary Public and two (2) witnesses, is signed on each page, and has an “attestation clause” in the Will. Failure to include any one of these can render the Will invalid. A client should make sure that his or her Will has each of these elements. The second kind of will under Louisiana law is an “olographic will”. An olographic will is a will that is entirely in the handwriting of the testator, and in addition, is signed and dated by the testator.
With respect to trusts, Louisiana only recognizes one type of formality: notarial act. In order for a trust to be valid under Louisiana law, it must be signed, notarized and witnessed by two (2) witnesses. In some cases, a trust created under the laws of another state may be valid in Louisiana as long as certain conditions apply. But this can be tricky. If you live in Louisiana and have a trust created under the laws of another state, you should have your trust reviewed carefully.
A carelessly drafted Will or Trust can be challenged in various ways. Often, a statutory will does not have a proper “attestation clause” or is not signed on each page. This can invite litigation. An olographic will, by its very nature, can invite litigation over whether the will was written in the testator’s handwriting. Sometimes, handwriting experts (who are expensive) have to be employed to help prove that the will was (or was not) in the handwriting of the testator.
Forced Heirship is a Louisiana peculiarity compared to the other 49 states. It is a carryover from the Napoleonic Code. In general, forced heirship applies to a child under the age to twenty four (24), or a child of any age if that child, at the time of a parent’s death, suffers from a physical or mental condition such that it may in the future render the child incapable of caring for his person or property. For example, one Louisiana court has ruled that a child who had bipolar disorder (a mental condition), even when cured by prescription drugs, was a condition indicating that the child was a forced heir. This was the case even though the child was over 24 years of age and was able to act normally with prescription medication. Because the bipolar disorder could potentially render the child incapable of caring for herself or her estate, the court ruled that she was a forced heir. The parent was not able to disinherit the child. This begs several questions. How might other physical or mental conditions apply? Is COPD a condition that might render one incapable of caring for themselves or their estate? What about heart disease?
An estate plan that does not take forced heirship into consideration invites litigation. And this is generally litigation that is expensive, since medical documentation must be presented to prove a claim. For my clients, I can draft certain clauses into an estate plan that can help to discourage forced heirship litigation. For forced heirs, you need an experienced attorney in your corner to challenge an improperly drafted estate plan.
Improper Trust Administration
Louisiana law provides that a trustee is a “fiduciary”. A fiduciary owes both a duty of loyalty and a duty of due care to a beneficiary. Are you a beneficiary of a trust? If so, the trustee will generally owe you an “annual accounting”, and in addition, will owe you an obligation to provide copies of trust records, including bank statements. Often, I can draft a trust for a client that waives some or all of these obligations, thereby saving the trustee headaches from litigious beneficiaries. But a poorly drafted trust will invite litigation, since the duty to provide an accounting is often ignored by Louisiana trustees.
Sometimes, a trustee improperly administers the trust by poor investing or even by laundering funds into many different accounts. I have had several instances in which, after one spouse passed away, the surviving spouse began to abscond with the assets from the trust, thereby stealing the rights of the beneficiaries who were the stepchildren of the surviving spouse. This can happen with either a trust or with an estate. It definitely happens and can be avoided with proper diligence.
Improper Trust Drafting
Often a trust can be so improperly drafted that it can invite litigation. This can happen when the trust is drafted by an inexperienced attorney. It can also happen when a trust is drafted in another state (even by an experienced attorney there), and after the client moves to Louisiana, the beneficiaries seek to have the trust interpreted pursuant to the laws of Louisiana. Some key provisions will carry over. Some will not. Because Louisiana does not recognize certain types of clauses allowed by other states, this can invite litigation.
Capacity and Undue Influence
In order to execute a Will or Trust under Louisiana law, a person should have legal “capacity” and be free of “undue influence”. Capacity, in general, means that the client has a sufficient knowledge of her property and the extent of her holdings, and she also knows who would inherit her property it in the event that no will was signed. Being free of undue influence means that the client’s wishes are not substituted for that of another person.
Under Louisiana law, capacity and lack of undue influence is presumed. Further, the burden of proof to overturn a will or trust for lack of capacity or undue influence is “clear and convincing evidence.” Accordingly it can be very difficult, sometimes virtually impossible, to overturn a will or trust for lack of capacity or undue influence.
Nevertheless, for my clients who may be facing a case where their estate planning documents might be challenged by a litigious heir, it is often a good idea to video the signing ceremony so that the client’s clear wishes can be clearly proven in the event that the litigious heir poses a challenge. In the video, I can ask illuminating questions such as “what is today’s date” and “who is the President of the United States” to prove capacity, and the client can give an oral statement as to why an heir is being disinherited. To discourage unwanted estate litigation, this simple video alone could be worth tens of thousands of dollars in estate defense fees.
THE KEY: The Importance of a Good Attorney
The key difference that can help you win a case (or cause you to lose a case) is the attorney that drafts your estate plan. To draft your estate plan, you should hire an attorney who is familiar with estate litigation matters, and who often goes to bat for clients in the estate litigation arena. That attorney will know what areas of your estate planning documents can and will invite litigation, and how litigation can be discouraged, thereby saving you and your family unwanted legal fees and costs, and especially years of litigation-induced stress.