Louisiana has a unique system of laws intended to prevent a person from disinheriting his or her children. These laws, which are derived from the Louisiana Constitution, place restrictions on a person’s ability to leave his or her property to someone other than their children in certain circumstances.
What is a Forced Heir?
Louisiana defines “forced heir” to include:
- A child of the decedent who is under age 24 at the time of the decedent’s death; and
- A child of the decedent of any age who is permanently incapacitated.
Grandchildren of the decedent can also be considered forced heirs if their parent (the decedent’s child) died before the decedent and, at the time of the decedent’s death, would have been under age 24 or permanently incapacitated.
In this context, the incapacity of a child is determined under the same standard used for guardianships (called interdictions in Louisiana). Regardless of whether the child was under an actual interdiction at the time of the decedent’s death, he will be a forced heir if his or her permanent mental state is such that an interdiction would be proper.
What are the Rights of a Forced Heir?
Forced heirs are entitled to a certain portion of a decedent’s estate. This portion is often referred to as the “forced portion” or “legitime.”
To determine the amount due to the forced heirs (the legitime), the decedent’s estate must first be divided into two shares: the forced portion and the disposable portion. The forced portion is the share that goes to the forced heirs. The disposable portion is otherwise distributed through intestacy or in accordance with the decedent’s Last Will and Testament.
What is the Forced Portion?
The following steps can help you calculate the disposable portion of a decedent’s estate.
- Determine the value of the decedent’s entire estate. Insurance policies and retirement benefits are not included in this amount.
- Subtract all debts of the decedent’s estate.
- Add back in the value of any lifetime transfers made within three years of the decedent’s death.
This will give you the starting value of the decedent’s estate for purposes of dividing it between the forced portion and disposable portion. (Note: This methodology is different from the one used to calculate the Federal estate tax.)
If the decedent has only one forced heir, that heir will be entitled to 25 percent of the estate. Everything else will pass to the disposable portion. If the decedent has more than one forced heir, the forced heirs will receive half of the estate and the disposable portion will receive the other half.
These rules are, however, subject to one limitation: each forced heir can receive no more than he or she would receive if the decedent died intestate. This could occur if there are five or more children, in which case each child would be entitled to 20 percent of the decedent’s property. Since this amount is smaller than the 25 percent forced portion, each heir will receive only 20 percent.
Any portion that does not pass to the forced portion will fall into the disposable portion. The disposable portion is then distributed in accordance with Louisiana’s intestate succession laws (if there was no Last Will and Testament) or the decedent’s will (if there was a Last Will and Testament).
Any life insurance proceeds or qualified retirement benefits paid to the forced heirs will count toward satisfaction of the forced portion. Any unsatisfied amounts will be paid from the assets of the decedent’s estate. The decedent may provide in his or her Last Will and Testament that certain assets will be used to satisfy the legitime. Alternatively, the decedent may delegate that authority to the executor of the estate.
Collation of Prior Gifts by Forced Heirs
Louisiana law provides a procedure for refund to the estate for any gifts made by the decedent prior to his or her death. This refund may be actual (return of the actual gift) or fictitious (bookkeeping entry of a credit representing the amount of the gift).
This process, known as collation, is built on the assumption that the decedent intended to benefit each of his or her descendants equally. Anything that the decedent left to an heir before his or her death is treated as an advancement of that heir’s inheritance and is taken into account in distributing the rest of the decedent’s assets.
Unlike other heirs, the decedent’s children who are forced heirs may demand collation. This right only extends to gifts made within three years of death. Gifts made more than three years before the decedent’s death are not subject to collation.
Three Ways to Restrict Forced Heirship
There are three ways that a forced heir’s rights may be legally restricted: usufruct, legitime trust, and survivorship requirements.
A decedent is free to give his surviving spouse a usufruct (similar to a common law life estate) over his or her property. This usufruct can extend to the forced portion of the decedent’s estate. The usufruct can include community property, separate property, or both. It doesn’t matter whether the forced heir is a child of the surviving spouse.
The decedent may leave the forced portion to a type of trust referred to as a legitime trust. For this type of trust to be valid, the trust must meet the following conditions:
- All net income from the trust must be distributed to the forced heir for his or her health, education, support, or maintenance, taking into account the other resources available to the forced heir;
- The forced heir’s beneficial interest in the trust must be free of all charges and conditions other than the ordinary restraints on alienation, permissible usufruct rights of a surviving spouse, placement in a class trust, or provisions applicable to the interests of a principal beneficiary;
- The term of the trust cannot exceed the life of the forced heir (except to the extent that the interest is subject to the surviving spouse’s income interest or usufruct); and
- All principal must be distributed to the forced heir upon termination of the trust.
If a trust provision violates these requirements, it must be reformed to comply with them.
The decedent may condition a distribution to a forced her by providing that the forced heir must survive the decedent by a period of up to six months, but only if the forced heir dies without heirs or descendants. This is a common provision in estate planning for tax and other purposes.
What Happens if a Forced Heir Renounces His or Her Legitime?
If a forced heir renounces his or her legitime, it passes to the disposable portion of the decedent’s estate. It does not augment the forced portion, meaning that none of the other forced heirs will receive a greater share.