Louisiana is different, we have a unique history, geography, and culture. This means our food, music, lifestyles, and even our laws are different.
Estate planning in Louisiana involves unique considerations due to the state’s distinct legal framework (heavily influenced by Napoleonic Code principles). One aspect that requires careful consideration is spousal usufruct, which applies to married couples when one spouse dies intestate – that is, without a will.
What is a spousal usufruct?
When a married parent dies without a will, the surviving spouse does not inherit the deceased spouse’s share of community property. That property goes to the deceased parent’s children – regardless of age. But before they use the property or spend the money, the surviving spouse has a usufruct – the right to use it until they die or remarry. At death or remarriage, the usufruct ends, and the children become full property owners.
While spousal usufruct can protect a surviving spouse’s interests when a person dies without a will, it can also have a downside. Individuals and couples should be aware of the downside when crafting their estate plans. It is especially important for married people in Louisiana to have wills.
Here are some of the problems the spousal usufruct can cause and solutions that can be implemented with a personalized estate plan.
Limitations on the Heirs’ Access to Assets:
Spousal usufruct restricts access to the estate assets for the deceased spouse’s children. While the surviving spouse retains the right to use and enjoy the assets, the children must wait until the surviving spouse’s death or remarriage to meaningfully access their inheritance. This delay can be frustrating for heirs who may need those assets for their financial well-being, and often causes conflict with the surviving spouse – especially when that spouse is not the parent of the decedent’s children.
Meanwhile, a spouse with a usufruct over a bank or investment account cannot use that wealth, but only the interest or investment profits that accrue during the usufruct. Also, a surviving spouse who wants or needs to move cannot sell the former family home without going to court for approval. With a will, a married person can make gifts to the children, allowing them to enjoy all or part of their inheritance while making separate gifts to the surviving spouse.
Potential for Disputes:
Spousal usufruct rights can sometimes lead to disagreements and disputes among family members. Questions may arise regarding what assets are included in the usufruct, how they can be used, and when they can be disposed of. These disputes can be emotionally and financially draining for all parties involved. With a properly executed will, a person can make specific gifts to a surviving spouse and children, minimizing the possibility of this dispute.
Need for Ongoing Management and Maintenance:
Managing assets subject to spousal usufruct is an ongoing responsibility. The surviving spouse may need to oversee property maintenance, financial investments, and other aspects of asset management, which can be burdensome, especially in later years. Meanwhile, the children waiting to get possession of their inheritance may be concerned about the lost or damaged property and want their say in how it is used and maintained. With an estate plan, married people can make separate gifts to children and surviving spouses so there is no usufruct.
In situations where a usufruct is an appropriate solution, a will can make important changes to the statutory usufruct, such as allowing it to continue for the surviving spouse’s entire lifetime even if they remarry and giving the surviving spouse discretion to sell and replace a family home subject to usufruct.
While spousal usufruct can provide valuable benefits, including financial security for a surviving spouse, it is essential to understand its potential downsides. To navigate the complexities of Louisiana estate planning effectively, individuals and couples should consult an experienced estate planning attorney who can provide tailored guidance and solutions that align with their specific goals and circumstances. At The Law Office of Alan Kansas, LLC, I can help you make informed decisions to protect your assets, provide for your loved ones, and protect them from unnecessary conflict and expense when you pass away.