Property & Estate Devolution Utilizing Fidei Commissum De Residuo : Finding Residual

Amendments to the Louisiana Civil Code revived the potential for a testament to utilize the fidei commissum de residuo, while maintaining that the distinct fidei commissum is still prohibited. However, the Civil Code is silent as to the composition of the residual interest resulting from alienation when fidei commissum de residuo is used, and there is an absence of jurisprudence in Louisiana on this issue. Thus, this article sets forth methods of determining the composition of the residual interest in a bequest containing a fidei commissum de residuo. Specifically, it analyzes a testator's likely intent in utilizing a fidei commissum de residuo, in lieu of a trust or usufruct and naked ownership, and whether an unlimited right of alienation by the first donee exists. Further, it assesses the residual interest composition when an alienation occurs. The article concludes by suggesting that Louisiana could enact default rules which state what portion of the property will be considered residual when it is alienated by the first donee, and it suggests that an application of the present Civil Code articles results in a residual portion consisting of the funds not yet received by the donee in exchange for the alienation plus any property of the initial gift that still remains in the first donee's patrimony