The succession process in Louisiana is often a lengthy one. It can take months or even more than a year to fulfill all of the responsibilities of a succession representative. They must communicate with the succession courts, creditors and beneficiaries of the estate while also securing, liquidating and allocating estate resources in accordance with the law or the instructions of the decedent.
The personal representative of the estate also has an obligation to handle tax responsibilities. They may file an income tax return on behalf of the decedent. The estate itself may need to file an income tax return if the plan includes instructions to liquidate assets. If a sale generates $600 or more in revenue, then an income tax return may be necessary. Occasionally, there could also be estate taxes.
Only federal estate taxes apply in Louisiana
Certain states impose a state-level estate tax. New York is an example. When an individual dies with millions of dollars of property in their name, they may need to pay taxes to the state where they live and possibly also the federal government.
The good news for testators and those expecting an inheritance in Louisiana is that the state itself does not assess an estate tax. However, federal estate tax rules still apply in Louisiana. As of 2024, any estate worth more than $13,610,000 could be subject to estate taxes. Those taxes could cost as much as 40% of the total value of the estate.
The representative of the estate managing the succession process has an obligation to pay estate tax liabilities before distributing any assets to the beneficiaries of the estate. What people inherit could shrink substantially if the estate is large enough to be subject to federal estate tax statutes.
Those who acknowledge that risk during the planning process can potentially alter the value of their estate by making gifts or transferring ownership of certain assets to trusts or other people. With adequate planning, individuals can minimize what taxes their estate has to pay after their passing, as addressing potential liabilities is an important part of the succession process in Louisiana.