What is Louisiana Heir Property?
Heir property is real estate that is owned by individuals who inherited the property from parents, grandparents, or other relatives who are now deceased. Unfortunately, many heir properties in Louisiana are created when people die intestate (without a valid will). Heirs do not have to go through a formal process with the Court to obtain ownership of the property because it is automatically inherited. However, the result is a complex ownership structure because heir property can be owned by multiple parties simultaneously and in fractions . The complexity increases because owners of fractions have the absolute right to use, occupy, and exclude others from the property without interference. In the context of the whole property (and the liability and expenses attached to it), this entitlement is often difficult, if not impossible, to manage. For instance, if a parent and child inherit property together, they both have ownership interests in the whole property and thus the child, as owner, has the right to exclude the parent from using or living on the property or making decisions concerning its use.
Louisiana Heir Property Legal System
The legal framework governing heir property in Louisiana is governed by the Louisiana Civil Code and various other regulations and guidelines. As with most states, Louisiana uses the probate process to distribute a decedent’s property. While some states have made efforts to provide basic rights to heirs of intestate estates, Louisiana has not put in place any real mechanism to eliminate uncertainty or complexity for heirs of intestate estates. Thus, the property of a decedent who dies without a will is distributed according to the decedent’s family structure under Louisiana law.
Note that in Louisiana estates are probated in the "Succession" proceeding. So, the terms "Succession" and "estate" are used interchangeably.
At the death of a Louisiana resident, his/her property will be distributed according to the rules of the Louisiana Civil Code. This means that descendants or descendants of descendants will inherit in equal shares unless an exception exists.
The Succession must be opened within one year of the decedent’s death. However, it may be opened at any time if the estate is not closed within five years from the end of the calendar year in which the decedent died or if and until the heirs establish their status as unrecognized heirs. To open the Succession, the appropriate Petition with accompanying documents must be filed with the appropriate court.
Once the Succession is opened, heirs may sell, convey or mortgage property through an affidavit process or a judgment of possession naming the heirs. Heirs must exercise due diligence to clear title and establish their ownership. Note that the Louisiana Civil Code also provides for partition (division) among co-owners for property held in indivision. This means that heirs may petition the court to force the division of assets. Agreements among co-owners may also be used to divide property.
Lenders may require a Succession Judgment before making a mortgage loan to an heir of property to be mortgaged. At a minimum, the lender should obtain an Affidavit of Heirship. An heir should consider both when purchasing property in Louisiana if a mortgage will be required to complete the transaction.
Succession in Louisiana
The process called succession in Louisiana law is the way ownership of a deceased person’s estate and assets is transferred to the heirs, family members or beneficiaries. It is essentially a series of legal steps that conclude when a judge signs a legal order transferring the estate. The Succesion is the legal process where the deceased’s Estate is split up by the laws of the State of Louisiana. The Succession is a procedure whereby the deceased’s estate is divided up by the laws of the State of Louisiana. Heir Property means there is no Will. This is not adverse possession.
In Louisiana, as in many other states, succession laws are broken into two categories: testate succession and intestate succession. Testate succession comes into play when the deceased has prepared a will, while intestate succession applies when the deceased has not left behind a will. Heirs of the deceased are typically referred to as "legatees" after a will probate and "successors" after intestate succession.
Whether testate or intestate, the deceased’s property, debts, contracts, wills, trusts and other legal instruments are reviewed, managed and distributed during the succession process. The process helps ensure the deceased’s estate is settled properly and that distributions follow Louisiana law.
The default systems in Louisiana for administering successions are "Independent" and "Court supervised." These systems are not mutually exclusive but are, instead, complementary.
Independent Administration
Louisiana requires Independent Administration of successions so long as the testator’s will provides for it. La. C.C. art. 3113. Louisiana Revised Statute 9:1551 sets forth the requirements for an Independent Administration in the absence of a provision for it in a decedent’s will.
Court Supervision
Court supervision of the administration of successions is governed by Louisiana Civil Code article 3141 and Louisiana Code of Civil Procedure article 3321. Unlike Independent Administrations, Court supervised successions are administered by executors and administrators appointed and supervised by the court. Court supervised successions afford greater oversight over the decedent’s estate by the probate court than would occur in an Independent Administration.
Problems with Co-Owned Heir Property
As the number of families who inherit heir property in Louisiana continues to grow, so do the legal challenges associated with co-ownership. Disputes among heirs are perhaps the most common consequence of co-ownership, and they can take many forms. Sibling rivalries may resurface after many years, and family members may argue over land use, management decisions, or rental income distributions.
When one heir refuses to pay property taxes or maintain the property, the value of the property can quickly decrease. Co-owners may also be reluctant to invest money into repairs if there is no guarantee they will regain their investment when the property is sold. Issues with co-ownership can be further complicated when a co-owner shares the property with a non-heir — for example, a spouse or a child.
Co-ownership of heir property also presents practical difficulties when a family member wishes to sell his or her share. Even with Louisiana laws in place to facilitate sales, finding a buyer for a portion of an inheritance can prove challenging. This is not only because of reluctance by other owners to sell their shares, but also because many prospective buyers do not want to own a partial interest in a property because of the potential for disagreement over its management.
Even if one part-owner finds a willing buyer, he or she will need approval from all other part-owners before selling. And even if the seller finds a willing buyer, that buyer may have difficulty financing the sale without an appraisal that properly reflects the value of the property, a task that is difficult to complete without the cooperation of other co-owners.
The recent passage of Louisiana Act 175 is a step in the right direction for many families that face the challenges of co-ownership of heir property. Among other changes, the Act streamlines the process by which heirs may decide to sell all or part of the property, and it requires co-owners to file periodic inventories and accounts when they generate tax consequences for the other co-owners. While these provisions help co-owners take better control over their property, the path to transfer of property out of co-ownership remains time-consuming and complex. Until there is a practical solution to this problem, generations of families in Louisiana will continue to struggle with the pitfalls of co-ownership of heir property.
Resolving Heir Property Issues
A common dispute that arises in connection with Louisiana heir property is from one co-owner who attempts to exclude the other co-owners from the property. Sometimes an issue arises regarding use of the property, such as one co-owner using property outside the contemplation of the other co-owners, or doing something on the property that has the potential to diminish its value, such as cropping or hunting. In those circumstances, the co-owner who is being excluded from the property has various remedies. One method of resolving heir property disputes is called petition for partition under Louisiana Code of Civil Procedure article 4601. Partition is the procedure for severing the interest of one co-owner. In other words, partition allows a co-owner to sell his or her portion of the property, such as to a third party, or to another co-owner , called the "communicandier." This remedy is sometimes referred to as a "partition sale." The Court only orders partition after determining by a preponderance of the evidence that partition cannot be accomplished in kind. Importantly, the Court is not limited to making a ruling with respect to one parcel of heir property-the Court can act with respect to all of the property at once, whether it is an undivided share of a single parcel or of multiple parcels, or a fractional share of one or more parcels of property. For example, in one recent case the Court granted partition by sale with respect to over 500 acres of heir property in one ruling. The Court will sell the property, either at public auction or by private sale, depending on whether there is a "readily ascertainable market price" for the property. In Louisiana, this generally means that the property is not "unique" a quote from the court. This means most of your garden-variety cases are good candidates for a partition sale.
Avoiding Heir Property Issues
Despite all of the issues highlighted above, heir property can be avoided if the landowner creates a will that provides for full ownership of the property. A will can be executed with or without formal notarization. However, it is always recommended to execute a notarized will in writing to have a valid testament. Testaments can also be olographic. Wills are usually used to pass on property to heirs who are not forced heirs.
Testaments are distinct from other acts of donation as they are not a present gift – they are a gift that becomes public at the passing of the party creating the will. Thus, there is no present donation to create a succession. A succession is an estate or a mass of property, real or personal, previously owned by a deceased person that is administered by a person under a last will and testament or pursuant to the law of descent and distribution. The Prayer for Possession gives recognition and effect to the dispositions made in the testament and transfers ownership to the heirs named in the testament.
Heir property issues may also be avoided by giving a prescriptive deed to the heirs as a partition in kind or substantial physical division of property that terminates a co-ownership of land in order to avoid forming a new type of undivided ownership.
Property sharing may also be avoided by using a family limited liability company or limited liability company. Members can share in the family business as having collective membership in the limited liability company. A limited liability company is generally isolated from future creditors as limited liability companies provide for limited liability, pass-through taxation, flexible ownership, charging orders, preservation of family wealth and separation of personal assets of managers and members.
Lastly, if an heir is an ungrateful or unnecessary heir, a parent may distill a future inheritance through the use of disinherited successions. The Civil Code states that a disinherited heir may be removed as a forced heir (based on Louisiana’s forced heirship regime) with or without a will. With a will, the testator may exclude heirs who he or she believes has caused him or her serious injury or otherwise behaved in an unworthy manner and warranting removal. Without a will, parents may disinherit a forced heir if he/she physically abandoned the parent and wasn’t an economically helpful presence in the parent’s life.
Hiring Legal Help
If you need legal assistance in dealing with your issues concerning heir property, it is best to consult an attorney. There are a number of basic questions you should be aware of as you search for a competent lawyer to assist you with the problems associated with Louisiana "heir property" law. You should ask a lot of questions of any attorney that you plan to hire. You should feel free to ask the attorney the following questions:
• How will this attorney bill you?
• What services will the attorney provide? (A full explanation?)
• How does the attorney handle conflicts – i.e., does the attorney represent long-lost heirs or other adverse parties?
• How far will the attorney go to resolve the matter?
• Is the attorney willing to keep you informed about the case process?
• If desired , what if the heir is not living in the state of Louisiana? Will the attorney assist heir who do not live in the state?
• Will the attorney take the heir to court in Louisiana or settle the matter out of court?
• Will the attorney provide a written fee agreement in detail as to his/her fees?
A full and frank discussion with the attorney about costs and fees is preferable beforehand. Before any judgment is rendered on the heir property, an attorney may need a fee for that part of the case. Once you have selected an attorney, let him or her handle your heir property problems. Do not handle the matter on your own while the attorney handles your heir property problem. Consult your attorney if you need additional information. Do not seek to handle the heir property matter without the attorney’s assistance. The attorney has the experience to handle the case properly, thus keeping you from losing money and/or time.