I watched a local news segment the other day that made it sound like every estate plan needed to utilize a Living Trust, also known as a revocable trust.
When planning for the future, many people are advised to create a living trust as a way to avoid probate, maintain privacy, and ensure a smooth transfer of assets after death. While those are valid goals, in Louisiana, a living trust is often unnecessary thanks to the state’s unique legal system and practical alternatives available under Louisiana law. Here’s why.
1. Louisiana’s Civil Law System Offers Built-in Alternatives
Louisiana is the only state in the U.S. that follows a civil law tradition based on the Napoleonic Code. This system provides several legal tools that can often accomplish what people seek in a living trust—without the added expense and complexity. Instruments like donations inter vivos (gifts during life), usufruct arrangements, and carefully crafted testaments (wills) can transfer property in an orderly and legally protected manner.
2. The Probate Process—Succession—Is Often Straightforward
In many other states, probate is notorious for being time-consuming, expensive, and public. In Louisiana, the process—known as succession or probate (both terms are used) —can be relatively simple, particularly when the decedent leaves a valid, well crafted will. Court supervision is minimal since the introduction of independent administrations of estates, and many successions are completed quickly and with modest legal expense.
3. Small Succession Affidavit Simplifies Transfers
For estates valued under $125,000, or where the decedent has been dead for more than 20 years, Louisiana allows heirs to use a Small Succession Affidavit. This document can transfer property without going through the full court process, providing a streamlined option for many families—again, with no need for a trust.
4. Usufructs Provide Spousal Protection Without a Trust
Louisiana’s community property laws provide automatic rights for surviving spouses, and usufruct arrangements can grant a spouse continued use of property during their lifetime. This legal mechanism allows parents to protect a surviving spouse while still ensuring children ultimately inherit the property—without requiring the management structure of a trust.
5. Improved Privacy Without a Trust
One of the most common reasons for creating a living trust is to avoid the public nature of probate. In Louisiana, this concern has been significantly reduced. The law now allows for the sealing of the descriptive list of assets filed in a succession proceeding upon court approval. This means sensitive financial information does not have to become public record.
Moreover, even when the descriptive list is not sealed, best practices now discourage listing full account numbers or personally identifying details in the filing. As a result, a Louisiana succession can preserve privacy nearly as well as a trust—without the cost and ongoing maintenance a trust requires. Make sure your attorney when drafting the descriptive lists limits this information.
6. Living Trusts Do Not Protect Against Medicaid or Forced Heirship
It’s a common misconception that living trusts can shield assets from the government or from forced inheritance obligations. In Louisiana:
- Living trusts do nothing for Medicaid planning. Assets in a revocable living trust are still counted as part of your estate for Medicaid eligibility purposes. Other tools, such as irrevocable trusts or specific asset protection strategies, are required for this kind of planning.
- They do not avoid inheritance taxes. Louisiana currently has no state inheritance tax, and federal estate tax planning involves entirely different strategies. A living trust provides no tax advantage.
- They do not override forced heirship. Louisiana’s forced heirship rules, which are unique in the United States, require that a portion of an estate be reserved for certain children, regardless of what a trust or will may say. A living trust cannot be used to sidestep this legal mandate.
7. Trusts Require Ongoing Management
Unlike a will, a living trust must be maintained throughout the person’s life. Assets must be retitled in the name of the trust, and future acquisitions must be properly transferred to avoid defeating the trust’s purpose. This ongoing responsibility is often burdensome, especially when a simple will and usufruct can accomplish the same goals under Louisiana law.
Final Thoughts
Thanks to Louisiana’s civil law traditions, streamlined succession options, and recent legal reforms, a living trust is no longer a necessary estate planning tool for most families. A well-drafted will, durable powers of attorney, and, when needed, usufruct arrangements can offer all the control and protection of a trust—without the added expense or hassle.
Moreover, it’s important to understand what a living trust cannot do: it won’t protect your assets from Medicaid recovery, reduce estate taxes, or allow you to bypass Louisiana’s forced heirship laws. In other words, it’s not a magic solution—and for many people in Louisiana, it’s simply not the right one.
Before deciding on a living trust, consult an estate planning attorney familiar with Louisiana law. In many cases, simpler tools are more than sufficient to carry out your wishes with dignity, clarity, and privacy.
Chip LoCoco
Estate Planning Attorney in New Orleans