Blog
You Have to Understand How Your Assets Pass at Your Death
Contrary to popular opinion, your will doesn’t necessarily control how your assets pass at your death. You may hold most of your wealth in assets that pass outside of your will. For example, if you have a retirement plan, life insurance, or IRAs, those assets aren’t usually subject to probate. Your will does not affect […]
Do Not Add Your Children to Your Bank Accounts
Adding your children to your bank accounts makes them co-owners of those accounts. If your children have creditors who have obtained a judgment against them, your funds are now subject to a bank garnishment to collect the judgment. In other words, adding your children to your bank accounts makes your accounts subject to the claims […]
Do NOT Rely on Co-Ownership of Property to Avoid Probate
In Texas, co-owners of property can have a right of survivorship to the property they co-own. Co-ownership with the right of survivorship means that when one co-owner dies, the surviving co-owner becomes the sole owner of the property without the necessity of opening a probate estate. But, using this method of estate planning can cause […]
Think About the Tax Consequences of Distributing Your Assets
Example: Mary’s estate consists of two significant assets, a life insurance policy and a traditional IRA. Both assets are equal in value. To simplify and equally distribute her assets, Mary names her son as the beneficiary of her life insurance and her daughter as the beneficiary of her IRA. What is the problem with Mary’s […]
Don’t Make the Mistake of Thinking All Estate Plans are the Same
I have seen a lot of poorly drafted estate plans. Inexperienced attorneys wrote some of those plans. Financial planners and CPAs even wrote some of them. With the proliferation of wrong information on the internet, I have seen more than a few poorly written do-it-yourself estate plans from forms found on the web. It isn’t […]
Do Not Add Your Children to the Deed of Your Home
When you put your children on the deed to your home or any other asset, you become a co-owner of the property with them. The legal effect of co-ownership can bring unintended results. The first unexpected result is creating an IRS tax liability issue for yourself. Putting your home in joint tenancy with your children […]
If You Don’t Have an Estate Plan, the State of Texas Has One for You
If you don’t have an estate plan, Texas law has one for you. The state’s plan determines who gets your property based on their relationship to you and the type of property you own. Example: Bill and Julia have been married for twenty years. Together they have a son and a daughter. Bill also has […]
Naming Children as Beneficiaries of Life Insurance
Many parents with minor children have not acquired substantial assets, so they use life insurance to provide financial security for the children in case one or both parents die. If you name your minor children as beneficiaries and they are minors when you die, the insurance company cannot legally pay the life insurance proceeds directly […]
You Should Not Plan Your Estate Around Specific Assets
I discourage clients from planning their estates around specific assets. There may be a compelling reason to do it in rare instances, but in most cases, it can result in unintended consequences. Example: John is a widower with three grown children. He wants to treat his children equally. In his will, John divides his assets equally […]