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Administration of Successions

by | Feb 10, 2022 | Succession Planning

Clients oftentimes have questions regarding the appointment of an Executor in a loved one’s Last Will and Testament and what must be done to administer their succession after they pass away. What many people don’t realize is that in many instances, an administration is not necessary, and the heirs or legatees can be placed into possession of their respective inheritances through submission of necessary paperwork to the court without necessity of appointment of an Administrator (for decedents who die without a Last Will and Testament) or Executor (for decedents who die with a Last Will and Testament).

Circumstances Where an Administration is Advisable or Necessary

There are a myriad number of instances where an administration of the decedent’s estate is necessary. They include:

  1. Disagreements between heirs or legatees on their respective inheritances.
  2. Insolvency of the estate and the need to sell certain assets to create liquidity.
  3. The need for a succession representative with authority to sell property, manage an ongoing business, etc.
  4. Instances in which there is ongoing or potential litigation involving the decedent.
  5. A need for an estate closing letter from the IRS.

Absent the factors above, the heirs or legatees can be placed into possession of their respective legacies by filing pleadings with the Court to open the succession, accept their respective inheritances and presenting a judgment placing them into possession of the decedent’s estate.

How to Choose a Succession Representative if an Administration is Necessary

If a decedent dies “intestate” (i.e., without a Last Will and Testament), any succession representative who is appointed is referred to as an “administrator.” On the other hand, if the decedent dies “testate” (i.e., with a Last Will and Testament), the succession representative is referred to as an “executor.”

If the decedent’s Last Will and Testament names a succession representative, that designation will govern unless that individual is otherwise disqualified from serving (i.e., they are under 18 years of age, interdicted, a convicted felon or a nonresident who has not appointed a resident agent for service of process).

If no individual is designated to serve as succession representative in a Last Will and Testament, the Louisiana Code of Civil Procedure requires courts to employ a preference in appointments in the following order:

  1. The best qualified among the surviving spouse, competent heirs or legatees, or the legal representatives of any incompetent heirs or legatees of the deceased.
  2. The best qualified of the nominees of the surviving spouse, of the competent heirs or legatees, or of the legal representatives of any incompetent heirs or legatees of the deceased.
  3. The best qualified of the creditors of the deceased or a creditor of the estate of the deceased, or a co-owner of immovable property with the deceased.

What Does a Succession Representative Do?

A succession representative is a fiduciary with respect to the succession, and is charged with the duty of collecting and preserving property of the succession. He must at all times act as a prudent administrator and can be personally responsible for any damages from his failure to do so. There is no prohibition against having multiple representatives.

A succession representative is the proper party plaintiff or defendant in any lawsuits involving the decedent or his estate, and also may settle them. Other duties of a succession representative may include:

  1. Taking possession of all property of the succession and enforcing obligations in its favor.
  2. Making necessary expenditures for the preservation of succession property.
  3. Paying taxes.
  4. Depositing all monies collected by him in a bank account in his official capacity.
  5. Continuing any business of the decedent for the benefit of the succession.
  6. Granting leases of succession property.
  7. Acknowledging or rejecting claims against the succession.
  8. Selling succession property in order to pay debts and legacies.
  9. Paying estate debts.
  10. Accounting for all steps taken as a succession representative.
  11. Sending the heirs or legatees into possession of their respective inheritances.

As a fiduciary of the succession, a succession representative cannot place his own interests above that of the succession. He must also close the succession as soon as advisable.

Must a Succession Representative Obtain Court Authority to Alienate Succession Property

In general, prior to a sale or exchange of succession property, a succession representative must first publicize the terms of the transaction in the parish where the succession is pending (and, for immovable property, the parish where immovable property is located if different from the parish where the succession is pending), and then obtain a court order authorizing the transaction. However, if the decedent has authorized an “independent administration” in his Last Will and Testament, or if all heirs and legatees agree with an independent administration, the requirements for publication and court authorization are dispensed with. An independent administration is generally cheaper because the requirements of publication and court authorization and those attendant delays will not apply.

Compensation Owed to a Succession Representative

The amount of compensation owed to an executor in a testate succession can be provided for in a decedent’s Last Will and Testament. In intestate successions, the amount of compensation can be reached through agreement of the succession representative and the heirs and surviving spouse.

Absent such agreement, the succession representative is generally allowed a sum equal to 2 ½% of the amount of inventory forming the estate as compensation for his services in administering the succession, although that amount can be increased upon a proper showing that the amount is inadequate.