Administration is the process of collecting and managing the assets, paying creditor claims, and dealing with any issues that must be resolved before the decedent’s assets can be distributed. It includes all of the steps that must happen between the time the estate is opened with the court and the date that the Judgment of Possession is issued transferring assets to the heirs. The Louisiana personal representative (succession representative) is responsible for administering the estate.
As discussed in our section on types of successions in Louisiana, there are two basic types of Louisiana successions: Succession Without Administration and Succession With Full Administration. As these names suggest, the primary difference between the two is whether administration is required.
In a Succession Without Administration, the administration process is unnecessary. But even if administration is required, the process can be simplified if the succession is eligible for independent (as opposed to court-supervised) administration. Independent administrations require less court costs, attorney fees, and publication costs.
Independent administration in Louisiana
In an independent administration, the succession representative does not need court permission to pay debts, list property for sale, sell real or personal property of the estate, borrow, exchange, lease, or invest succession property. This avoids the hassle and cost of having to ask the court for authority to take each step.
Independent administration can be required or prohibited in a valid Last Will and Testament. Otherwise, it it is a matter of consent. If the decedent had a will, all general and universal legatees (those who inherit the property after specific bequests are satisfied) must consent to independent administration. If the decedent died intestate, all intestate successors must consent.
If any of the universal legatees or heirs are minors, each child’s natural guardian (usually a parent) can consent to administration on their behalf, without the need for a formal guardianship (tutorship). But if there is a will, a formal guardianship proceeding may still be required under the general rules that apply to testate estates.
These consents are usually presented when the estate is opened, but it can be done later (i.e., a court-supervised administration can be converted to an independent administration).
Independent administrators are not required to post bond unless required by will (which would be unusual). If a bond was obtained in a prior court-supervised administration, it should be released when the estate is converted to dependent administration. The court may require a bond, though, if an interested party requests security in a contradictory hearing.
If Court-Supervised Administration is Required
If the succession doesn’t qualify for independent administration, the succession representative is responsible to administer the estate under court supervision. This requires the court to oversee every step of the administration process, including:
- Inventory – As part of the administration, the succession representative must file an inventory of the assets of the estate. Louisiana law allows for a Sworn Detailed Descriptive List of the assets of the decedent to be filed in lieu of the inventory. This document must identify and list the assets owned by the decedent and the fair market value of each item on the date of death. As a practical matter, the Sworn Detailed Descriptive List is almost always used in lieu of an inventory.
- Bond – The personal representative may be required to post bond in an amount that exceeds one-quarter of the gross value of the estate (1.25 percent of the estate value).
- Annual Accountings – The succession administrator is required to file an annual accounting with the court. This accounting is similar to a balanced checkbook ledger. It starts with the beginning balance for the period and includes all debits and credits to arrive at the closing balance. Copies of the accounting is then provided to the heirs or legatees of the estate, along with a notice that it can be approved by the court if no objection is made within 10 days. If no objection is made, the court can approve the accounting.
- Dealing with Assets of the Estate – The succession administrator is responsible for dealing with assets of the estate, including sale of items (if necessary to pay debts), leases, mortgages, and other contracts involving the succession. Prior court approval is generally required for each action.
- Payment of Debts – Any creditor of the estate can submit a claim to the succession representative for payment. No particular form is required. If the succession representative doesn’t respond within 30 days acknowledging or rejecting the claim, he or she is deemed to have rejected it.
The succession representative should generally not pay debts from assets of the estate without publication and court authority. The only exceptions are for urgent debts and pursuant to an order to continue a business (if debts incurred in the regular course of the business). All other debts are included in the Proposed Tableau of Distribution and filed in the succession proceeding.
