LEGAL CORNER: I need to have a succession done. I heard that it - KPLC 7 News, Lake Charles, Louisiana

LEGAL CORNER: I need to have a succession done. I heard that it’s a whole lot cheaper to do a small succession. Is that right?

Submit your question to news@kplctv.com. Civil matters only, please.

Question 1: I serve on a non-profit board that is selling some real estate.  The buyer’s attorney is saying that we have to amend our articles of incorporation because they say that we have “members.”  It is true that this is how our articles read.  But, as a practical matter, we have never had members, just a board of directors.  Why do we have to amend our articles?  Why can’t we just authorize a board member to sign with a corporate resolution? 

Answer: A corporation is a juridical entity.  It is its own person so to speak with its own identity.  It is created and empowered by its articles. If the articles of incorporation say that the corporation has members, then it legally has members whether if it actually does or not. So, in those organizations that actually do have members (like a church for example) then a quorum of voting members would have to be present at an authorized meeting and actually vote in order for the organization to sell land.  In this case, we agree that the simplest thing to do is to amend the articles to say that any reference to members was a mistake and that the corporation has never had members. It’s a good idea to propose a draft of your final documents to the closing attorney in advance so that he or she can preview same and approve same before you go the trouble to execute and record it.

LA R. S. 12:207 (D) says In part:  Except as otherwise provided in the articles or by-laws, a corporation may borrow money, purchase immovable property, or sell, lease, encumber or otherwise alienate any of its immovable property, only if a resolution so authorizing has been approved by the voting members at a regular or special meeting (emphasis added).  

Question:    I’m thinking about selling some land and then taking the money and putting it to a new house. A friend of mine keeps telling me that if I do a “1031” exchange, then I will not have to pay a capital gains tax.  Is he right?

Answer: Maybe. Section 1031 of the Internal Revenue Code allows a taxpayer to exchange property that is held for use in a trade or business for the production of income with “like kind” property, and avoid a taxable gain.  These sorts of exchanges work well when a real estate investor has a rent house, wants to sell it, and also plans to buy new property in the near future.  When this happens, the seller, instead of receiving the sale proceeds, instead turns them over to a third party escrow agent. The third party escrow agent holds the money until such time as the seller is ready to use them to buy a like kind house.  This way, the sale proceeds never come under the control fo the seller.  Accordingly, when the seller uses the money to buy a new property, then the seller will never have to touch the proceeds.  This way, the seller avoids a capital gain tax.  These are commonly known as “1031 exchanges.”  They are somewhat complex and they have many restrictors.  The viewer should consult a knowledgeable real estate professional before acting.

Question: I need to have a succession done. I heard that it’s a whole lot cheaper to do a small succession. Is that right? 

Answer: Maybe. Code of Civ. Proc. Art. 3421 defines a small succession as the succession or the ancillary succession of a person who at any time has died and the decedent's property in Louisiana has a gross value of one hundred twenty-five thousand dollars or less valued as of the date of death.

The requirement of a small succession are laid out in Art. 3431 as follows: 

A. It shall not be necessary to open judicially the small succession of a person domiciled in Louisiana who died intestate, or domiciled outside of Louisiana who died intestate or whose testament has been probated by court order of another state, and whose sole heirs are the following:

(1)  His descendants.

(2)  His ascendants.

(3)  His brothers or sisters, or descendants thereof.

(4)  His surviving spouse.

(5)  His legatees under a testament probated by court order of another state.

Art. 3 Art 3432. Affidavit for small succession; contents

A.  When it is not necessary under the provisions of Article 3431 to open judicially a small succession, at least two persons, including the surviving spouse, if any, and one or more competent major heirs of the deceased, may execute one or more multiple originals of an affidavit, duly sworn before any officer or person authorized to   administer oaths in the place where the affidavit is executed, setting forth:

(1)  The date of death of the deceased, and his domicile at the time thereof;

(2)  The fact that the deceased died intestate;

(3)  The marital status of the deceased, the location of the last residence of the deceased, and the name of the surviving spouse, if any, and the surviving spouse's address, domicile, and location of last residence;

(4)  The names and last known addresses of the heirs of the deceased, their relationship to the deceased, and the statement that an heir not signing the affidavit (a) cannot  be located after the exercise of reasonable diligence, or (b) was given ten days notice by U.S. mail of the affiants' intent to execute an affidavit for small succession and did not object;

(5)  A description of the property left by the deceased, including whether the property is community or separate, and which in the case of immovable property must be sufficient to identify the property for purposes of transfer;

(6)  A showing of the value of each item of property, and the aggregate value of all such property, at the time of the death of the deceased;

(7)  A statement describing the respective interests in the property which each heir has inherited and whether a legal usufruct of the surviving spouse attaches to the property;

(8)  An affirmation that, by signing the affidavit, the affiant, if an heir, has accepted the succession of the deceased; and

(9)  An affirmation that, by signing the affidavit, the affiants swear under penalty of perjury that the information contained in the affidavit is true, correct and complete to the best of their knowledge, information, and belief.

B.  If the deceased had no surviving spouse, the affidavit must be signed by at least two heirs. If the deceased had no surviving spouse and only one heir, the affidavit must also be signed by a second person who has actual knowledge of the matters stated therein.

C.  In addition to the powers of a natural tutor otherwise provided by law, a natural tutor may also execute the affidavit on behalf of a minor child without the necessity of filing a petition pursuant to Article 4061.

Disclaimer: The information furnished in this answer is general and may not apply to some situations. All legal situations are unique. No one should rely to their detriment on these answers. Anyone with a potential legal problem should seek the advice of a licensed attorney before taking any action or inaction. The answers provided are not intended to be specific legal advice and no attorney-client relationship is created between the SWLA Law Center and the viewers of KPLC-TV.

Copyright 2017 KPLC. All rights reserved.

  • More Local NewsNewsMore>>

  • SUNRISE: Jan. 18 Birthdays!

    SUNRISE: Jan. 18 Birthdays!

    Thursday, January 18 2018 10:17 AM EST2018-01-18 15:17:55 GMT

    Happy birthday to our Sunrise birthdays for Jan. 18 Copyright 2018 KPLC. All rights reserved.

    More >>

    Happy birthday to our Sunrise birthdays for Jan. 18 Copyright 2018 KPLC. All rights reserved.

    More >>
  • Southwest Louisiana arrest report: Jan. 16, 2018

    Southwest Louisiana arrest report: Jan. 16, 2018

    Thursday, January 18 2018 8:40 AM EST2018-01-18 13:40:13 GMT

    Ireall N Chest, 25, Harvey: Two counts instate detainer.  Troy Scott Coker, 35, Sulphur: Two counts of failure to register as a sex offender. Bond: $15,000. Anthony Dashuan Williams, 19, Lake Charles: Simple burglary, illegal possession of stolen things, six counts of contributing to the delinquency of juveniles, theft. Bond: $5,000.  Dontrelle Washington, 34, Lake Charles: Instate detainer.  Dion Matthews Smith, 36, Lake Charles: Direct contempt of court, battery, ...

    More >>

    Ireall N Chest, 25, Harvey: Two counts instate detainer.  Troy Scott Coker, 35, Sulphur: Two counts of failure to register as a sex offender. Bond: $15,000. Anthony Dashuan Williams, 19, Lake Charles: Simple burglary, illegal possession of stolen things, six counts of contributing to the delinquency of juveniles, theft. Bond: $5,000.  Dontrelle Washington, 34, Lake Charles: Instate detainer.  Dion Matthews Smith, 36, Lake Charles: Direct contempt of court, battery, ...

    More >>
  • UPDATE: Kinder, Calcasieu and Jeff Davis Parish schools remain closed Thursday

    UPDATE: Kinder, Calcasieu and Jeff Davis Parish schools remain closed Thursday

    Thursday, January 18 2018 8:18 AM EST2018-01-18 13:18:51 GMT
    CPSB logo (Source: CPSB)CPSB logo (Source: CPSB)

    Calcasieu Parish schools will remain closed tomorrow, Jan. 18 due to ice, water, and heat issues. All central office locations will open at 11 a.m.  KPLC will continue to update this story as we receive more information. Copyright 2018 KPLC. All rights reserved.

    More >>

    Calcasieu Parish schools will remain closed tomorrow, Jan. 18 due to ice, water, and heat issues. All central office locations will open at 11 a.m.  KPLC will continue to update this story as we receive more information. Copyright 2018 KPLC. All rights reserved.

    More >>
Powered by Frankly