Disclaimer: This article provides general information under Louisiana law. It is not legal advice. Consult a qualified attorney for guidance.
Detailed Answer
When someone dies in Louisiana, an executor or administrator must determine the estate’s net value after paying debts, fees, and expenses. Follow these steps to calculate what remains for heirs or legatees.
1. Identify and Inventory All Estate Assets
The personal representative files an inventory and appraisement within 90 days of qualification, per Louisiana Code of Civil Procedure arts. 3131–3149 (See statute). Include:
- Real property (homes, land)
- Bank and investment accounts
- Vehicles
- Personal effects (jewelry, furniture)
- Business interests
2. List and Validate Creditors’ Claims
La. Code Civ. Proc. art. 2944 sets a claims notice period of three months. Creditors file claims; the representative reviews and approves valid debts. Common claims include:
- Mortgages and secured loans
- Unsecured debts (credit cards, medical bills)
- Funeral and last illness expenses
- Administrative costs (attorney fees, court costs)
3. Prioritize and Pay Debts and Fees
Louisiana law prescribes an order of payment (LSA–R.S. 9:2801):
- Funeral and last illness expenses
- Costs of administration (court costs, executor fees)
- Preferred claims (e.g., employee wages up to limits)
- Secured creditors (e.g., mortgage holders)
- Unsecured creditors
4. Account for Forced Heirship (Legitime) and Exemptions
Louisiana’s forced heirship rules protect certain descendants or interdicted persons. They receive a “legitime” share under Civil Code art. 1493 et seq. (See statute). Additionally, the homestead exemption may shelter up to $7,500 of the family home per LSA–R.S. 9:2801.
5. Calculate the Net Distributable Estate
Subtract total debts, administrative costs, forced heirship shares, and exemptions from the gross estate value. The remainder distributes per the will or, absent a will, under Louisiana’s intestacy rules (C.C. arts. 889–1370).
Hypothetical Example
Suppose the estate has:
- House valued at $200,000
- Bank accounts totaling $50,000
- Vehicle worth $15,000
- Debts: $100,000 mortgage, $10,000 credit cards, $5,000 funeral
Gross assets: $265,000. After paying $115,000 in debts and $5,000 in administration, net estate equals $145,000. Forced heirship claims (e.g., two minor children) might reserve 25% ($36,250). This leaves $108,750 for distribution.
Helpful Hints
- Keep detailed records of all asset valuations and payments.
- Respond promptly to creditors’ notices to avoid claims disallowance.
- Review homestead and family allowance exemptions early.
- Consult LSA–R.S. 9:2801 for priority of claims and exemptions.
- Seek professional appraisal for high-value assets to ensure accuracy.
- Use probate software or spreadsheets to track calculations.