What’s A Usufruct? What Louisiana Residents Need To Know

Estate planning in Louisiana is unique.

French and Spanish influences can be found all over New Orleans. The architecture, food, music, and more form the base of our melting pot, but did you realize that these influences are also present in our estate planning laws?

A usufruct is a unique estate planning law that remains from our French and Spanish forefathers.

A usufruct permits a temporary use and benefit of someone else’s property. Louisiana is different from nearly every other state and territory of the United States because a usufruct is the default setting for most community property.

What should Louisiana residents understand about usufructs?
How will usufructs impact the estate planning process?
Will usufructs change your estate planning strategy?

Let’s find out.

Breaking Down The Usufruct

Usufructs are old-school and rare, and Louisiana is one of the only states that abides by these laws.

At the most basic level, a usufruct is an agreement that allows someone to temporarily use and profit from another’s property. It’s important to understand that you don’t actually own the asset as the usufructuary (the person using the asset). Still, you can benefit from it or “use the fruit.” Consider a simple example with a satsuma tree to understand how a usufruct works. The usufructuary doesn’t own the tree, but they must maintain it, and while doing so, they get to “use the fruit” for their own benefit. Once they pass, the tree will pass to the naked owner.

Usufructs aren’t indefinite. They are in place for a set period, which could include specific conditions, like death, remarriage, etc., or a particular time frame, say 20 years.

Here’s some other lingo you should understand.

Usufruct: The right to use the property of another (i.e., a home, bank account, etc.).
Usufructuary: The person who has the right to use the property, like a surviving spouse.
Naked Owner: The person who owns the property once the usufruct ends. For example, a surviving spouse may have usufruct over the family property until they pass away. The naked owner could be their children, who would inherit the property after their last parent dies.

What Do Usufructs Mean For You, A Louisiana Resident?

Often, the usufruct is the default on community property in Louisiana. People like to pick on Louisiana for this unique system, but the heart of the law is meant to protect your family. It’s designed to pass down assets in an orderly manner that is fair for all family members. There are also built-in protections for those that die without a will (intestate).

Community/marital property is a legal term that designates asset ownership. If you’re married, any assets, income, or property is generally considered community property, meaning it belongs to both spouses equally.

For example, a surviving spouse of a deceased resident could have a usufruct on their primary residence. Under this structure, each spouse can decide what they want to happen with their half of the home once they both pass and the usufruct expires.

Where Do My Assets Go? A Usufruct Example

Sometimes complex estate planning issues are better illustrated with a story.

Stephanie and Brian got married in 2009. They have one adult child together, and Stephanie has two adult children from a previous marriage.

Under a usufruct, Stephanie has designated her two children from the previous marriage as the naked owners of Stephanie’s half of their primary residence. Should Stephanie pass before Brian, he would serve as the usufructuary and has the right to occupy the property until he passes. Once he dies, Stephanie’s half of the home would go to her two children, and Brian’s half could go to the child he had with Stephanie.

At this point, in Louisiana, the usufruct has served its proper purpose. Are you concerned about how it will work out when your blended family’s children own a house together? A well-versed estate planning attorney can help fine-tune distributions.

Make A Clear Plan For Your Estate

If you learn anything about Louisiana law and usufructs, it should be that a detailed estate plan is critical. Usufructs can be beneficial in many people’s estate plans, especially with blended families. Proper estate planning allows you to specify where and when your assets go once you pass.

Keep in mind that estate planning is highly complex. There are many options in the estate planning tool kit. Make sure you take the time to think things through. Don’t get hung up on the legalese; a good estate planning attorney specializes in translating your wishes.

Suppose you die without a will in Louisiana. In that case, your estate automatically goes through the court probate system, and they will decide how to best split your assets, not you. Even though estate planning can be challenging, it’s best to take control and make these pivotal choices for yourself. Otherwise, a judge will decide for you.

Proper estate planning is a true gift to your loved ones. It simplifies and streamlines the process and takes the decision-making off of your family’s plate. Since there are so many “ifs” and “thens” in this process, it’s best to consult with your financial and legal team to ensure your plan aligns with your goals, values, and legacy.

Schedule some time with our team today and see how we can help you craft a detailed estate plan that honors your final wishes.