Founding Attorney
In many states, naming a beneficiary on a bank or investment account is a simple way to avoid “probate” when someone passes away. These designations are often called Payable on Death (POD) or Transfer on Death (TOD) accounts. They sound convenient — but Louisiana doesn’t work like most other states.
Here, a beneficiary form is not always enough to transfer the account. In fact, most Louisiana banks will not allow a POD or TOD designation at all. The result is that people who believe they have planned ahead are often surprised when their accounts end up going through a succession anyway.
Why Louisiana Is Different
Louisiana has a unique succession system. Before money or property can move after a death, the law has to determine:
- Who inherits
- Whether the property is community or separate
- Whether there is a surviving spouse with certain rights
- Whether there are children with special inheritance rights
- Whether debts, taxes, or other obligations must be paid first
Those issues do not disappear just because a beneficiary is named. For that reason, many institutions refuse POD/TOD on Louisiana deposit accounts because honoring the form could violate Louisiana’s inheritance rules.
Where Beneficiary Designations Commonly Fail
Most problems occur in two situations:
1. Regular Bank and Credit Union Accounts
Checking, savings, and money-market accounts in Louisiana are rarely allowed to have POD/TOD designations. Even when someone was given the form years ago at a bank in another state, Louisiana institutions often require the funds to go through succession.
2. Out-of-State Brokerage or Online Accounts
Some investment firms allow TOD accounts because that is normal in other states. They may not realize that Louisiana treats inheritances differently. Even when the transfer occurs, the beneficiary may still face claims or adjustments later.
What About Retirement Accounts and Insurance?
Retirement accounts, annuities, and life insurance generally still use beneficiary designations and normally pay out directly. However, those assets can still be affected by Louisiana’s rules if needed to satisfy inheritance rights or other obligations. The lesson is not that beneficiary tools “don’t work,” but that they must be coordinated with an overall plan.
Forced Heirship and Community Property: Hidden Issues
Two Louisiana concepts make planning more complicated:
- Forced heirship: Certain children have a right to inherit part of the estate
- Community property: Married couples often own property together even if only one spouse’s name is on the account
These rights can override a beneficiary form if the transfer would shortchange a spouse or child who is entitled to inherit or be reimbursed. Because banks cannot easily sort this out, they often refuse the beneficiary designation altogether.
The Real Problem: People Expect to Avoid Succession but Don’t
A common frustration is when families believe an account will “bypass probate,” only to learn it must go through succession anyway. This can cause delays, additional expenses, and results that do not match what the decedent intended.
The problem is not that people plan poorly—it’s that Louisiana’s rules do not match the planning tools people are familiar with from other states.
How to Plan the Louisiana Way
If your goal is to make transfers efficient and predictable, beneficiary forms alone are not always the best tool. Louisiana families typically have better results when planning includes:
- Reviewing how each account is titled
- Understanding whether accounts are community or separate
- Using wills to clarify who receives what
- Considering trusts when control or simplicity is important
- Coordinating accounts, paperwork, and estate planning together
In Louisiana, the details matter more than in most states—especially at the account level.
The Bottom Line
Louisiana is not really a “POD/TOD state” in the way most people expect. Beneficiary designations can work in certain situations, but they must be handled with care and coordinated with Louisiana succession rules. Assuming Louisiana works the same as other states can unintentionally undo thoughtful planning.
If you want to make sure your accounts pass to the right people in the right way, it helps to review your current setup with someone who understands both the legal rules and how local financial institutions actually operate. At Kallio Law Firm, LLC, we help Louisiana families align their accounts, wills, and succession plans so everything works together. Contact us to schedule a review and confirm your plan reflects Louisiana law.
