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When a person owns property in full ownership, all three principals of ownership rest in that person. Those principals are: 1) They have the right of possession; 2) the income derived from it 3) and the right to sell, lease, mortgage or otherwise transfer the property. Property in this context means any asset, not only real estate. 

In Louisiana, a person can grant the right of usufruct over any type of property. When this is done, then the rights of full ownership are split into usufruct and naked ownership, with the three principals of ownership being divided among them.

The usufructuary is the person who owns the usufruct. So what does it mean to have the usufruct over property? If one looks to the Latin root of the word, usufruct, then it helps one to understand what rights a usufructuary has when it is granted. Usufruct comes from the Latin terms: Usus: meaning the use, and Fructus meaning the fruit (rent and income). Thus, the usufruct provides the usufructuary with the right to use and possess the property (Usus), and he/she can also derive income from the property subject to the usufruct (Fructus). The usufruct to a spouse can be for life or can end upon remarriage. 

As seen above, the usufruct splits the ownership from full ownership into a Usufructuary/Naked Owner relationship. The naked owner owns the property subject to the grant of the usufruct. What does that mean for the naked owner? That answer depends on how the usufruct was set up.

For example, the usufruct of a home gives the usufructuary the right to live in the home or to rent the home and receive the rental income. Unless the usufructuary was specifically granted the right to sell the home without the consent of the naked owner, the usufructuary may not sell the home without the naked owner’s consent. This right to sell by the usufruct without consent of the naked owner can be granted or restricted in someone’s will. During the duration of the usufruct the naked owners may not interfere with the usufructuary’s peaceful possession and use of the property subject to usufruct. At the termination of the usufruct the naked owners become the full owners of the home. In other words, the naked owners now take full ownership of the property.

If the usufruct is over a bank account, the usufructuary may spend the cash. However, when the usufruct ends the naked owners are entitled to receive the value of the bank account at the inception of the usufruct. This concept is known as a usufructuary accounting. More often than not, this accounting is not an issue. For example: dad leaves the naked ownership of his estate to child, and usufruct to wife. When wife dies, she leaves her entire estate to that same child. No usufructuary accounting is due because that child was the legatee (heir) of both parents. All of the assets passed down to that person. Sometimes though, that is not the case.

Here’s an example. Dad dies leaving a Last Will and Testament which left the usufruct of his estate to Mom, and naked ownership to their child, Jane. Together, Mom and Dad had about $1 million in the bank. Being community property, Dad’s interest in the accounts is one-half or $500,000.00. After Dad’s Succession was complete, all of these bank accounts were put in Mom’s name only. 

Mom then gets remarried and has a son, Frank. Mom