The state of Louisiana uses a legal process known as succession to handle the assets and debts of a decedent's estate, instead of the more common probate court procedure followed in other states. In Louisiana, the probate process is reserved for validating a will. Succession handles the payment of outstanding debts using any assets of value the decedent owned, and this only affects an inheritance if the debts outweigh the value of the assets.
Estate Assets
When a decedent passes away, all of the items of value he owns, which can be included in the succession case, must be inventoried and listed with an estimated current value. Estate assets include real property that is not jointly owned, such as a house or land, a car or a recreational vehicle. Individually owned bank accounts and investment vehicles are also examples of estate assets.
Estate Debts
Estate debts include the administrative costs of funeral and burial arrangements, court filing expenses, succession administration, outstanding utility or credit card bills, unpaid taxes, personal loans and medical expenses. Each estate has varying levels of outstanding debts and bills that must be paid, and these are listed as claims against the estate during the succession process.
Debt Payments
The succession process is designed to settle an estate without beneficiaries and heirs having to take on the burden of a decedent's debt. The reason an estate's assets are listed and valued is because those assets are used to pay off valid debt claims against the estate. Estate assets are liquidated or sold as needed until all debts are satisfied and paid in full.
Estate Inheritance
When assets of an estate remain after all debts have been fully satisfied, the remaining assets are distributed to heirs and beneficiaries according to the decedent's will. If she didn't leave a will, the state distributes assets according to the terms of Louisiana state law. Heirs may also receive inheritance through life insurance policies or from payable-on-death accounts that did not get included in the succession process. As of June 2004, Louisiana has no inheritance tax that must be paid to the state, but the federal government may require taxes if the inheritance is above $5 million.
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