Sadly, America has lost yet another icon. On August 16, 2018, Aretha Franklin passed away on at age 76. Franklin died at her home in Detroit, surrounded by her family and friends. In her hit song Respect, Franklin sang “I’m about to give you all my money…” Notwithstanding that generous promise, sources estimate that at the time of her death, Franklin may have been worth as much as $80 million.
Alas, according to documents filed by Franklin’s four sons with the Oakland County Probate Court in Michigan, in which they list themselves as “interested parties,” the “Queen of Soul” died without a Will. Franklin’s niece also filed papers requesting that she be appointed as the estate’s administrator.
Of course, Franklin isn’t the first, nor will she be the last person to neglect planning for their estate. According to a 2015 Harris Poll, 64% of American adults don’t have a will. The simple fact is that, of those without a Will, many say they simply don’t need one.
Unfortunately, many people have a poor understanding of what happens if they die “intestate” – the term for dying without a Will. Putting a plan in place helps ensure that upon your death, your wishes are carried out and that family squabbles don’t evolve into destroyed relationships.
In other words, it’s not always all about you – it’s also about your family.
Generally, if you die intestate, the laws of the state where you lived determine how and to whom your property passes. Louisiana is one of nine community property states, and how your assets are distributed to your heirs depends on whether those assets are your “separate property” or “community property.”
By and large, a married couple’s community property includes property acquired during the marriage with earnings of either spouse – salaries, for instance; property acquired with other community property, and income derived from separate property.
Separate property includes property that you owned prior to the marriage, and property that you receive through a donation or as an inheritance.
Under Louisiana’s intestacy laws, your separate property passes to your descendants in equal shares, by roots. So, if you have children, your separate property goes to your children, equally. If you had children who predeceased you, then your deceased child’s share is inherited by his children, and, if they are deceased, by their children, and so on. If you have no descendants, then your assets are inherited by your siblings (and then their descendants), but subject to the usufruct in favor of your parents.
Many people are surprised to learn that your surviving spouse only inherits your separate property if you leave no surviving descendants, no surviving parents, no siblings, and no descendants of siblings.
Community property is treated differently than separate property, because, upon your death, it belongs half to your estate and half to your surviving spouse.
If you die with no descendants, then your spouse is entitled to your share of community property. However, if you are survived by descendants, your descendants inherit your community property subject to your spouse’s usufruct. The surviving spouse’s usufruct lasts until the spouse either dies or remarries.
The word “usufruct” is derived from the Latin words usus “to use” and fructus “fruits,” i.e., profits. The usufruct is the right to use and enjoy property, but it is not equivalent to full ownership because, among other limitations, the person having a legal usufruct does not have the right to sell or alienate property without the consent of the “naked owners,” the people who accede to the property when the usufruct terminates.
Although simply having the use of property might seem like a good idea, often it creates difficulties for a surviving spouse. For example, if an aging spouse wants to sell the family home to move to a smaller home or condominium, the decedent’s children, who may have an emotional attachment to the home, can block the sale of the house, thus leaving the surviving spouse with no alternative but to continue to live in and maintain a house that no longer suits her lifestyle.
Of course the disposition of your assets is not the only issue that the state or the court gets to decide if you die without a Will. The court will also get to make the decision as to who will raise your minor children. And, if there is disagreement among the family members you leave behind, litigation can ensue. While the state has a statutory pecking order of who will be considered to serve as the children’s “tutor,” ultimately, it’s up to the judge. So, if you have minor children, and you think you are better able than a court to choose who will raise them after you pass on, then it is important to state so in a Will.
Dying intestate can cause unintended consequences, and it can lead to resentment among heirs, and even litigation. So, before you let the state decide who will inherit your assets, make sure you know what the state has in mind.
(Article by Eric Schorr)
Check Local and National Estate Planning and Elder Law Associations.
There are several local and national associations and academies dedicated to helping you with estate planning, elder law issues, and special-needs planning. These associations’ websites are a valuable tool if you’re looking for a qualified attorney in your area. Here are just a few: