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Aug 02, 2026
Trusts can address estate-planning goals that are difficult to accomplish through an ordinary will or beneficiary designation. However, different trusts solve different problems. A trust designed to provide lifetime care for a pet will look very different from one intended to preserve property for grandchildren or support a charitable organization.
Three types of trusts in Louisiana that may be worth considering are pet trusts, generation-skipping trusts, and charitable trusts.
What Is a Louisiana Trust?
Under Louisiana Revised Statutes 9:1731, a trust is a relationship created when title to property is transferred to a trustee to administer as a fiduciary for the benefit of another.
That definition highlights an important point: a trust must involve property. Signing a trust instrument without properly transferring assets to the trust may leave the estate plan incomplete.
A Louisiana trust generally involves three principal roles:
- The settlor creates and funds the trust.
- The trustee administers the property under the trust’s terms.
- The beneficiary receives the benefit of the trust.
Louisiana generally uses the term “settlor,” although federal tax materials and resources from other states may use “grantor” or “trustmaker.”
Revocable and Irrevocable Trusts
Before considering specific types of trusts in Louisiana, it helps to understand the difference between revocable and irrevocable arrangements.
A revocable trust generally allows the settlor to retain the power to amend or revoke the trust during life. It can provide continuity if the settlor becomes incapacitated and may keep properly transferred property from requiring a judicial succession after death.
However, a revocable trust does not automatically avoid succession. Only property properly transferred to the trust is governed by it. Property that remains titled in the settlor’s individual name may still require succession proceedings.
A revocable trust also does not ordinarily remove its assets from the settlor’s taxable estate. Its principal benefits often involve management, continuity, privacy, and control rather than estate-tax avoidance.
An irrevocable trust generally cannot be freely revoked or amended by the settlor unless the trust instrument or applicable law permits the proposed change. Irrevocable trusts can serve specialized tax, asset-management, charitable, and multigenerational planning purposes. However, they also require the settlor to give up some degree of control.
A trust also may be created through a testament. A testamentary trust becomes effective after the settlor’s death and the will is given legal effect.
Our article How Trusts Help an Estate Bypass Probate explains why proper funding matters when a trust is intended to reduce the property passing through succession.
1. A Louisiana Pet Trust
Louisiana law expressly permits a trust to provide for the care of one or more identifiable animals. Under Louisiana Revised Statutes 9:2263, a pet trust may be created for animals that are living and identifiable when the trust is established.
A pet trust can provide more structure than simply asking a friend or relative to take the animal. The trust can identify:
- The person who should serve as caregiver
- A backup caregiver
- The trustee responsible for managing the money
- The standard of care the owner expects
- The veterinarian the caregiver should use
- Instructions concerning food, medications, grooming, and housing
- Whether animals should remain together
- Reasonable compensation for the caregiver
- How the trustee should monitor the animal’s care
- What happens to the remaining funds after the animal dies
The caregiver and trustee may be different people. The caregiver has physical custody of the animal, while the trustee manages the money and makes distributions according to the trust.
Separating these roles can create accountability. The person providing day-to-day care does not necessarily have unrestricted control over all the funds set aside for the animal.
Louisiana law generally limits the use of pet-trust property to the animal’s care and the reasonable compensation and expenses of the trustee and caregiver. Therefore, the trust should contain realistic funding provisions and clear instructions.
A pet trust may be particularly helpful when:
- The animal has substantial veterinary or medical needs
- Several animals should remain together
- The intended caregiver will need financial assistance
- Family members disagree about who should receive the pet
- The owner wants someone to monitor the caregiver
- The owner has no close relative able to assume responsibility
A pet trust is not the only part of planning for an animal. The owner also should consider who can take immediate custody if the owner is hospitalized or dies unexpectedly. Our article Accounting for Pets in Estate Planning discusses these practical planning decisions in greater detail.
2. A Generation-Skipping Trust
A generation-skipping trust generally holds property for grandchildren or more remote descendants. Despite the name, it does not necessarily require completely disinheriting the settlor’s children.
For example, a trust might permit distributions for an adult child’s health or support during the child’s lifetime, with the remaining property passing to the grandchildren after that child’s death. Another trust might benefit the grandchildren directly for education, housing, health care, or other stated purposes.
A generation-skipping trust may help a family:
- Preserve property for more than one generation
- Provide structured assistance for grandchildren
- Protect an inheritance from a beneficiary’s poor financial decisions
- Keep inherited property under professional or family management
- Establish different distribution ages or milestones
- Address concerns about divorce, creditors, or outside influence
- Preserve a family business or investment portfolio
The trustee can be instructed to make discretionary distributions rather than giving a young beneficiary unrestricted control over the property at age 18.
Generation-Skipping Transfer Tax
A trust for grandchildren also may involve the federal generation-skipping transfer tax. This tax is separate from, although related to, the federal estate and gift taxes.
For 2026, the federal generation-skipping transfer tax exemption is $15 million per individual, with inflation adjustments scheduled for later years, according to the IRS’s 2026 inflation-adjustment guidance.
Because the exemption is high, many Louisiana families will not owe generation-skipping transfer tax. Still, the tax rules should not be ignored. Proper allocation of the exemption can matter, particularly when a trust is expected to appreciate substantially or remain in existence for many years.
A trust does not become exempt from generation-skipping transfer tax merely because it is called a “generation-skipping trust.” The beneficiaries, distribution terms, amount transferred, timing of the transfer, and allocation of the settlor’s exemption all matter.
For families well below the federal exemption, the more important reasons for creating this type of trust may be long-term management and control rather than tax avoidance.
3. A Charitable Trust
A charitable trust can support one or more charitable purposes while also coordinating benefits for individual or family beneficiaries.
The appropriate structure depends on what the settlor wants to accomplish. Some people want the charity to receive everything after their death. Others want to create an income stream for themselves or family members before the remaining property passes to charity.
Charitable Remainder Trust
A charitable remainder trust is an irrevocable trust that pays income to one or more noncharitable beneficiaries for life or a specified term. When that period ends, the remaining trust property passes to one or more qualified charitable organizations.
According to the IRS’s charitable remainder trust guidance, these trusts may provide annual payments for a beneficiary’s life or for a term of up to 20 years. The charitable remainder must satisfy federal valuation requirements.
A charitable remainder trust may be considered when someone:
- Owns highly appreciated property
- Wants to create an income stream
- Has significant charitable goals
- Wants to diversify a concentrated asset
- Is prepared to make an irrevocable charitable commitment
Transferring appreciated property to a charitable remainder trust does not simply erase the gain. The trust generally receives the donor’s carryover basis, and distributions to the noncharitable beneficiaries are taxed under special ordering rules. The structure therefore requires careful tax and legal planning.
Charitable Lead Trust
A charitable lead trust works in the opposite order. The charity receives payments for a stated period. At the end of that period, the remaining property passes to children, grandchildren, or other noncharitable beneficiaries.
A charitable lead trust may be useful when the settlor wants to support a charity now while preserving the remaining property for family members later.
A Charitable Trust Is Not Always Necessary
Not every charitable gift requires a specialized trust. Depending on the goal, a person may be better served by:
- Making an outright charitable bequest in a will
- Naming a charity as beneficiary of an account
- Creating a simpler testamentary charitable trust
- Contributing through a donor-advised fund
- Making lifetime charitable gifts
Charitable remainder and charitable lead trusts have technical drafting, valuation, administration, and tax-reporting requirements. Their potential benefits should be weighed against the cost and complexity of maintaining them.
Choosing the Right Type of Trust
The correct trust depends on the problem the estate plan needs to solve. A person should begin with the intended result rather than selecting a trust based only on its name.
Important questions include:
- Who should benefit from the property?
- When should each beneficiary receive it?
- How much control should the beneficiary have?
- Who can serve as a reliable trustee?
- Should the trust operate during the settlor’s lifetime or begin at death?
- Will the settlor need access to the property?
- What tax consequences could result?
- How will the trust be funded?
- How long should the trust continue?
- What happens if the original plan no longer works?
Trusts also require administration after they are created. The trustee must understand the distribution standards, recordkeeping obligations, investment responsibilities, and tax requirements.
Field Law Can Help With Different Types of Trusts in Louisiana
Pet trusts, generation-skipping trusts, and charitable trusts serve very different purposes. Each must be drafted and funded to match the settlor’s actual goals, family circumstances, and property.
Field Law helps Louisiana families evaluate different types of trusts and coordinate them with wills, beneficiary designations, mandates, and succession planning. We can help determine whether a specialized trust provides a meaningful benefit or whether a simpler plan would accomplish the same objective.
Contact Field Law to schedule a consultation about creating or updating a Louisiana trust.
