Setting up a trust in Louisiana means drafting a trust instrument that names a trustee to hold and manage property for a beneficiary, then legally transferring your assets into that trust. Louisiana law defines a trust as "the relationship resulting from the transfer of title to property to a person to be administered by him as a fiduciary for the benefit of another" under the Louisiana Trust Code. Creating the document is only half the job. A trust that is never funded, meaning assets are never retitled into it, cannot do what it was built to do.
At Oak Grove Estate Planning, founder Andrew Mims built Louisiana's only law firm dedicated exclusively to estate planning because families kept receiving trust documents without ever being walked through the funding step. This guide breaks down both halves of the process: creating a legally sound trust and actually funding it, so nothing gets left behind.
What Is a Trust? Key Roles and Terms Explained
A trust is a legal arrangement in which one party holds property for the benefit of another, and understanding it begins with a handful of terms that recur throughout the process. Louisiana's Trust Code assigns each role a specific legal meaning:
- Settlor (grantor): The person who creates the trust and transfers property into it.
- Trustee: The person or institution who holds legal title to trust property and manages it as a fiduciary.
- Successor trustee: The person who steps in to manage the trust if the original trustee dies, resigns, or becomes incapacitated.
- Beneficiary: The person or entity for whose benefit the trust was created.
- Trust corpus (principal): The property held inside the trust.
- Pour-over will: A will that transfers any leftover assets into the trust at death, acting as a backup for anything never formally retitled.
Once these roles are clear, the next decision is which type of trust actually fits your goals.
Revocable vs. Irrevocable Trusts: What's the Difference?
A revocable trust can be changed or canceled by the settlor at any time during their life, while an irrevocable trust generally cannot be altered once it is created. That single distinction drives nearly every other difference between the two.
| Revocable Trust | Irrevocable Trust | |
|---|---|---|
| Control | Settlor can amend, revoke, or add/remove assets at any time | Settlor gives up control once created |
| Creditor protection | Assets remain reachable by the settlor's creditors | Assets are generally shielded from the settlor's creditors |
| Tax treatment | Trust income is reported on the settlor's personal tax return | May reduce the taxable estate, depending on structure |
| Probate avoidance | Yes, if properly funded | Yes, if properly funded |
| Common use case | Asset management, incapacity planning, probate avoidance | Medicaid planning, asset protection, estate tax reduction |
Most Louisiana families start with a revocable living trust because it maintains flexibility while avoiding probate of funded assets. Irrevocable trusts tend to come into play for Medicaid planning, special needs planning, or larger estates concerned with estate tax exposure.
Do You Need a Trust in Louisiana?
Not every estate plan requires a trust, but several situations make one worth serious consideration. A trust is often the right tool when a family wants more privacy, more control over timing, or protection that a will alone cannot provide.
Families who typically benefit from a trust in Louisiana include:
- Parents of minor children who want assets professionally managed until a child reaches a specified age
- Owners of real estate in multiple states, since a funded trust can avoid a separate ancillary probate proceeding in each state
- Parents of a child with special needs who need funds preserved without disqualifying government benefits
- Blended families wanting clearer, more customized control over who inherits what and when
- Business owners who need a smooth transition plan if they become incapacitated
- Anyone prioritizing privacy, since successions in Louisiana become part of the public court record, while a properly funded trust generally does not
A will remains the foundation of nearly every Louisiana estate plan and addresses guardianship and forced heirship in ways a trust cannot replace on its own. A trust is typically an addition to a will, not a substitute for one.
How to Set Up a Trust in Louisiana: Step-by-Step
Creating a trust in Louisiana follows a defined sequence, and skipping steps is where most DIY plans run into trouble.
Here’s what we suggest:
- Define your goals: Decide what the trust needs to accomplish: probate avoidance, incapacity planning, care for a minor or special needs beneficiary, or asset protection.
- Choose the right trust type: Match the goal to a revocable or irrevocable structure, since the two are not interchangeable once assets are transferred.
- Select a trustee and successor trustee: Louisiana restricts who may serve as trustee, so confirm the person or institution qualifies under the Trust Code before naming them.
- Draft the trust instrument: The document must be in writing and identify the settlor, trustee, beneficiaries, and the powers the trustee holds over trust property.
- Execute the trust: Sign the instrument in accordance with Louisiana's formal requirements, which typically include notarization, especially when the trust will hold immovable property.
- Fund the trust: Legally transfer ownership of each asset into the trust's name. Without this step, the trust exists only on paper.
Andrew Mims and the Oak Grove Estate Planning team walk clients through each of these steps individually, since a trust drafted around the wrong goals or an unqualified trustee creates problems years later.
How to Fund a Trust: An Asset-by-Asset Checklist
Funding a trust means retitling assets so the trust, not the individual, legally owns them. Each asset type has its own transfer method. Keep in mind, every asset on the following list needs its own transfer document; there is no single form that moves everything into a trust at once.
Real estate
- Execute and record a new deed transferring the property into the trust's name in the parish where the property is located
- Louisiana law requires the trust instrument or an extract of it to be filed for record whenever trust property includes immovable property
Bank and investment accounts
- Retitle checking, savings, and brokerage accounts into the trust's name
- Alternatively, add the trust as a payable-on-death designation where retitling is not practical
Business interests
- Assign LLC membership interests, partnership shares, or corporate stock into the trust, following the transfer procedures in the entity's governing documents
Personal property
- Use a signed assignment of personal property to move items like jewelry, art, and household belongings into the trust
Life insurance and retirement accounts
- Update beneficiary designations directly with the carrier or plan administrator
- Retirement accounts are usually left pointed to individual beneficiaries rather than the trust, since naming a trust incorrectly can trigger accelerated income tax consequences
The Most Common Mistake: An Unfunded Trust
The single biggest mistake in Louisiana trust planning is signing the trust document and stopping there.
An unfunded trust holds nothing, which means any asset left in the settlor's individual name still passes through succession when they die, regardless of what the trust instrument says.
An unfunded or partially funded trust creates several predictable problems:
- Probate happens anyway. Any asset never retitled into the trust still passes through Louisiana's succession process, defeating the main reason most families create a trust.
- The estate plan becomes public. Succession proceedings become part of the public court record, unlike a properly funded trust.
- Delays and added costs hit the family. Heirs face the time and expense of a court proceeding for assets the settlor thought were already protected.
- Newly acquired assets get missed. A home, account, or business interest acquired after the trust was signed does not automatically fall inside it.
- The trust and the pour-over will conflict. If most assets never make it into the trust, the pour-over will effectively become the primary plan rather than a backup.
A pour-over will exists precisely to catch what funding misses. It directs any asset still titled in the settlor's name at death into the trust, but that asset must go through the succession process before reaching the trust. Relying on a pour-over will as a primary funding strategy defeats the purpose of avoiding probate in the first place.
This is why Oak Grove Estate Planning treats funding as part of the engagement, not an optional add-on left for the client to finish alone. Ongoing check-ins every three years also catch newly acquired assets, such as a new home or investment account, that were never added to the trust after the original signing.
DIY vs. Hiring an Attorney: How to Decide
Online templates can technically create a trust document, but funding a trust correctly and drafting it to hold up under Louisiana's civil law framework is where DIY approaches most often fail.
| DIY Trust | Attorney-Drafted Trust | |
|---|---|---|
| Louisiana-specific compliance | Templates are often written for common law states and may not reflect Louisiana's civil law rules | Drafted to comply with the Louisiana Trust Code and Civil Code |
| Funding guidance | Typically not included; the individual must research and complete every transfer alone | Attorney and staff coordinate deed transfers, account retitling, and beneficiary updates |
| Coordination with a will | Risk of conflicting or duplicated provisions between the will and trust | Will and trust are drafted together to work as one coordinated plan |
| Ongoing updates | No built-in process for reviewing the plan after life changes | Includes structured check-ins as circumstances change |
| Best suited for | Very simple estates with a single easily transferable asset | Real estate, blended families, special needs beneficiaries, business interests, multi-state property |
As a general framework, DIY carries the most risk when real estate, a business, a special needs beneficiary, or a blended family is involved. Attorney involvement becomes less optional and more necessary as the number of asset types and family relationships grows.
What Trust Funding Typically Costs and How Long It Takes
Cost and timeline depend heavily on how many assets need to be retitled and how complex the trust's terms are. A trust holding a single home and one bank account funds much faster than one covering multiple properties, business interests, and several financial accounts.
Real estate transfers generally take the longest, since a new deed must be drafted, signed, notarized, and recorded in the parish where the property sits. Bank and investment account retitling can often be completed in a single visit to the institution once the trust document is in place.
Because pricing and timelines vary by estate complexity, Oak Grove Estate Planning provides a complimentary consultation to walk through the specifics before any commitment is made.
Frequently Asked Questions About Setting Up and Funding a Trust in Louisiana
Does a trust avoid probate in Louisiana?
A properly funded trust avoids probate for the assets titled in its name, since the trustee already holds legal title and no court transfer is required at death. Assets left outside the trust still pass through Louisiana's succession process.
Can I be my own trustee?
Yes. Many settlors of revocable living trusts serve as their own trustee while they are alive and capable, and name a successor trustee to take over if they become incapacitated or pass away.
What happens if I forget to fund an asset?
An asset never retitled into the trust remains part of the settlor's individual estate and passes through succession, even if the trust document lists it as intended trust property.
Do I still need a will if I have a trust?
Yes. A will addresses guardianship for minor children and Louisiana's forced heirship rules in ways a trust does not, and a pour-over will provides a backup for any asset accidentally left unfunded.
Can I change my mind after creating a trust?
A revocable trust can be amended or revoked at any time while the settlor is alive and has capacity. An irrevocable trust generally cannot be changed once it is signed, which is why choosing the right type at the outset matters.
Let’s Start Your Trust the Right Way
A trust only protects your family if it is drafted correctly and fully funded, and both steps require attention that most DIY platforms never mention.
Andrew Mims founded Oak Grove Estate Planning as Louisiana's only law firm dedicated exclusively to estate planning, and he and attorneys Rebecca Block Autin and Clare Roubion have spent nearly 15 years helping Louisiana families create trusts that actually work when they're needed.
The firm is a WealthCounsel and ElderCounsel member and holds affiliations with NAELA and the Louisiana State Bar Association, and Andrew authored Don't Let the State Decide to help Louisiana families avoid exactly the funding gaps this guide covers.
Every client also receives unlimited complimentary advice and a no-cost check-in every three years, so newly acquired assets and life changes are folded into the trust rather than falling outside it. If you're ready to set up or fund a trust in Louisiana, schedule a complimentary consultation with Oak Grove Estate Planning in Lafayette to get started.
Disclaimer: The information on this page is provided for general educational purposes only and does not constitute legal advice. Every case is different. Past results do not guarantee future outcomes.
Sources
- Louisiana Trust Code, La. R.S. 9:1731, Trust Defined
- Louisiana Trust Code, La. R.S. 9:2092, Recordation of Instruments
- Louisiana Governor's Office of Elderly Affairs, Probate and Succession Guide
- Internal Revenue Service, Definition of a Trust
