When no qualified person has petitioned for appointment as administrator of a succession within three months of the death of the deceased, the court may appoint an attorney at law as administrator and set his compensation. The attorney would be required to post security. Otherwise, all of the provisions relating to the administrator of a succession would apply to the attorney.
The security required by an administrator is set by law to be 1¬ times the value of the property of the estate. This means that the administrator must produce a bond, secured by his own real estate or by an insurance company, that guarantees his performance. A person who was named by the testator as executor is generally not required to furnish security. However, the will can require security and forced heirs, a surviving spouse in community or creditors can require that the executor post security.
The listing or inventory of a decedent's property is created by a notary appointed by the court in the presence of at least two competent witnesses, assisted by two competent appraisers appointed and sworn by the notary. Upon completion, a record of the inventory is to be made and filed with the court. This can be a cumbersome process.
In lieu of the above formal inventory process, what is normally done in successions, and is allowed by law, is the filing of a sworn detailed descriptive list of property. This list would list all of the property of the deceased including the legal description of immovables, the account numbers of bank accounts, stock certificate numbers for stock, vehicle identification numbers for vehicles, etc. The list is normally prepared by the attorney, adopted and sworn to by two witnesses who are familiar with the property.
The court may remove any succession representative who is or has become disqualified, has become incapable of discharging the duties, has mismanaged the estate, has failed to perform any duty that he should have performed, or has ceased to be a domiciliary of Louisiana without appointing an agent. However, the removal of a succession representative from his office does not invalidate any actions that he had taken prior to his removal.
Source La Code of Civil Procedure Art 3081 et seq
Powers of Succession Representative
The succession representative is a fiduciary to the succession and has the duty of collecting, preserving and managing the property of the succession. He is to act at all times as a prudent administrator and is personally responsible for all damages resulting from his failure to act. He has the duty to close the succession as soon as is advisable.
A succession representative cannot, in his own personal capacity or as representative of any other person, make any contracts with the succession of which he is the representative. He cannot acquire any property of the succession or interest therein, personally or by means of third persons. All contracts so prohibited are voidable and the succession representative will be liable to the succession for all damages resulting from his dealings.
The above limitation of not contracting with the succession is not applicable to a succession representative who is a surviving spouse of the deceased, a partner of the deceased with respect to the assets and business of the partnership, a co-owner with the deceased as it relates to the co-owned property, an heir or legatee of the deceased or a creditor with respect to the property secured by a mortgage or privilege.
The succession representative has all of the procedural rights of any other party who is a litigant. As such, he can sue and be sued in his capacity as succession representative.
The representative is deemed to have possession of all of the property of the succession just as did the decedent. As such, he has the right to enforce all obligations of the succession in its favor.
When the succession representative receives money, he is to deposit the funds in a proper bank account without unnecessary delay. He is to only withdraw and disburse the funds as will be discussed later. His failure to promptly deposit the funds of the succession could be a cause to have him removed from office and to assess a charge against him, personally, and his surety, of an amount of 20% per annum with such funds being paid to the succession.
If there are idle funds in the succession, the representative may invest those funds but only after obtaining the approval of the court. He is also authorized to continue the operations of a going business but only after court approval.
Source La Code of Civil Procedure Art 3191 et seq
Claims Against the Succession
When a party has a claim against the decedent or against the succession, he should present that claim to the succession representative. If the representative does not acknowledge the debt within 30 days, it is considered to be denied. In that case, the creditor would be advised to make a formal submission of the claim in the proper format to stop the running of prescription (statute of limitations) so that he does not lose his claim due to the lapse of time.
In order for a creditor to sue a succession representative for a debt, the debt must first be presented to the representative and rejected by him, either directly or by not acting on the matter for 30 days.
If a creditor is successful and obtains a judgment against the succession representative, he cannot use that judgment to seize any property of the succession. However, if there were a regular mortgage on property of the deceased, that mortgage could be a basis for seizing the mortgaged succession property.
The succession representative may sell succession property but only after following certain rules and obtaining court approval. The approval process begins with the filing of a petition in the succession record providing all of the pertinent facts about the proposed sale. A notice of the filing of the application to sell property is to be published in the proper newspaper of the parish one time when movable property is involved and at least 2 times (3 weeks apart) when immovable property is involved. The notice must state that court approval can be obtained within 7 days of the last date on which the notice is published unless there is an objection filed in the record. An opposition to a private sale may only be filed by an heir, legatee or creditor.
The private sales of bonds or stock at prevailing market rates also require court approval but there is not a requirement for advertising. Court approval can be obtained simultaneously with the filing of the petition requesting such approval.
The succession representative may pay the bills and debts of the succession but only after filing a petition to do so, publishing a notice of that fact and obtaining court approval in a timely fashion. The payment of urgent debts or expenses of operating a going business could be exceptions to this rule.
Interested parties can file a notice in the succession proceedings to be notified of the filing of any petition to pay bills and expenses. An opposition to the payment of bills and expenses may be filed after the notice is mailed or published. However, since approval and payment can be made seven days after such mailing or publication, the objection must be timely filed. If objection is filed, then the court will set the matter for a hearing and both sides can present their positions.
Annual Accountings
The succession representative is to file an annual accounting with the court. The accounting is to show the money and other property received by and in the possession of the representative at the beginning of the period, all receipts of funds or property and expenditures of funds during the year and the property on hand at the end of the year. Failure to file an annual report could be grounds for removal of the representative.
Copies of the annual accounting are to be provided to the heirs and legatees along with a notice that the accounting can be approved by the court within ten days thereof. If no opposition is filed, the court can approve it thereafter and that approval is prima facie proof that it is correct.
Executor's Fee
The fee or compensation to be paid for an executor named in the will is the amount that is specified in the will. The fee for an administrator is the agreed upon fee at the date of his appointment. In the absence of a provision in the will or an agreement, the succession representative's fee is 2 «% of the amount of the inventory in the succession. This is not an amount payable annually but rather is a flat fee. If circumstances require a different fee, it can be modified by the court. If there are multiple representatives, they are to share in the fee and should not each expect to collect the maximum amount. If the person who is the succession representative is also the attorney for the succession, he cannot claim fees in both capacities but only a reasonable fee for the work that he does. Any such compensation still requires court approval prior to payment.
Final Judgment of Possession
A succession is concluded at the time the judge executes a final judgment of possession. This judgment transfers the property of the decedent to the heirs and legatees and will not be signed until all of the affairs of the succession have been wrapped up, expenses and charges of the succession have been paid, inheritance taxes paid, and there is nothing further for the succession representative to do. Under special condition, distributions can be approved by the court at earlier times.
The judgment of possession will list the various heirs and legatees who are receiving property and list, in detail, the property that they are to receive. When the judgment of possession is recorded in the conveyance records in the clerk of court's office, the listed property is thereby officially recorded in the name of the heirs and legatees.
Since the succession representative is still in charge of the property up to the disposition of it in the judgment of possession, he must then file his final accounting showing the activity during the last year or part of the year since the last annual accounting. The representative can petition for approval by the court of his discharge and if there is no opposition, he will be discharged.
Sometimes property of the decedent is found after a succession has been concluded. In those cases, the succession can be reopened to deal with that property. After the state inheritance taxes have been paid, if applicable, the judge will sign an amended or supplemental judgment transferring the newly found property to the proper heirs or legatees.
Source La Code of Civil Procedure Art 3241 et seq
Ancillary Probate Procedure
The property laws of the various states control the ownership of immovable property located within their boundaries and the disposition of that property upon the death of the owner. Thus, if a decedent is a domiciliary of one state but owns property in another state, a probate proceeding will need to be instituted in that second state to deal with the transfer of the property in that second state. That proceeding is not the primary probate proceeding but is a minor or ancillary filing to handle only a specific property. As such, the filing in such second state is referred to as an ancillary probate proceeding.
For matters involving property located within the state of Louisiana, the petition for an ancillary probate proceeding should be filed in the parish where the immovable property is located. Upon opening the succession, a succession representative appointed by a court outside of Louisiana may act with respect to property located in Louisiana but only after qualifying in this state.
If the decedent died with a will and that will was executed outside of Louisiana in the manner prescribed by the law of the place of its execution, that will has the full force and effect of law in Louisiana just as if it had been executed according to Louisiana law.
Source La Code of Civil Procedure Art 3401 et seq
======================== WARNING =======================
AND DISCLAIMER
This information is provided for the reader's benefit in
becoming familiar with the legal matters discussed. Your
particular facts may be different from the points above.
You should not rely on the above data without consulting a
attorney to discuss the specific facts of your case
and the law of your state.
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If you live in Louisiana and want to talk about your situation, please call me at:
Marvin E. Owen
Attorney-CPA
3036 Brakley Drive
Baton Rouge, La 70816
ph 225-292-0099
toll-free 1-888-292-0116
e-mail marvin@meocpa.com
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