If you’re like most parents, your beneficiary designation on your life insurance probably lists your minor children as the secondary beneficiaries of your life insurance policy, behind your spouse in the following way: Primary Beneficiary: Spouse Secondary Beneficiary: My Children This is a mistake. What Happens When a Beneficiary is a Minor? In Texas, children under the age of 18 lack the legal capacity to own more than a nominal amount of assets. So, for example, if you and your spouse have named your minor children as the secondary beneficiaries of your insurance policy and you both die together, the…

My youngest son is 16 years old now. Last summer, as Covid forced lockdowns, he and half a dozen of his friends planned a beach trip to celebrate the end of the pandemic. A friend’s parents volunteered to chaperone and rented a house for June of 2021. The promise of a week together at the beach kept them optimistic for an entire year.  I’m delighted that he’s going to get away with his friends. But as a mom and lawyer, I worry. My son recently broke his ankle while at a friend’s house. Had he been out of town with…

As parents, we all do our best to instill our good values in our children. But sometimes, despite all our guidance, our children make poor personal and financial decisions. Their poor judgment may be due to a lack of maturity that is temporary. Or it may be due to a long-term problem stemming from alcohol and drug abuse or another addiction. Whatever the reason, you know that they will squander any hard-earned money you leave to them when you die within a short amount of time. But does this mean that you should disinherit your spendthrift child? Not at all.…

If you own guns, you may be wondering whether you should transfer them to your Revocable Trust. There are a couple of reasons why that is generally a bad idea. Reasons to Avoid Putting Guns in a Revocable Trust First, the government regulates certain types of guns, known as “NFA firearms.” NFA firearms include machine guns, suppressors and silencers, short barrel rifles and shotguns, and destructive devices. Second, certain beneficiaries of your Trust may be “prohibited persons” for purposes of gun ownership. Under Federal law, a prohibited person includes, but is not limited to, someone who: has been indicted for,…

A woman’s adoptive father was dying. She was worried, but not about what you’d expect. You see, her father inherited a piece of family land from her grandmother that her grandmother always said would one day pass to her. Unfortunately, her relationship with her father had soured, and they had not spoken for years. She knew her father had a Will and had disinherited her, but she was hopeful. A friend told her that it was impermissible for parents to disinherit an adopted child in Texas. “Is my friend right?” she asked. Her friend was wrong. Section 201.054 of the …

Lawyers use a lot of words when talking about wills, assuming that everyone knows their meaning. But I realized early on that many people outside the legal community don’t understand what we’re talking about. Below are some words lawyers use when talking about Wills, defined in plain English. Testate: Dying testate means dying having made a valid Will. Wills allow you to direct how and two whom your property will be distributed after you die. Intestate: Dying intestate means dying without having a valid Will. If you die intestate, a statutory formula will dictate who will receive your property. Intestacy…

Capital gains tax is a type of tax you have to pay when you sell an appreciated asset. You calculate it by subtracting your purchase price (known as the cost basis) from how much you sold it for. For example, suppose you purchase stock for $10 a share. Your basis is $10 per share, the amount you invested in the stock. Suppose that when you sell the stock, it is worth $100 per share. The difference between the purchase and the sale price is the amount subject to capital gains tax. In our example, $90 per share would be subject to capital…