Articles

ENSURE YOUR FINANCIAL PRIVACY

Posted by on Jul 25, 2014 in Articles, Uncategorized | 0 comments

 

“THE LEGAL CORNER”

By Sam A. Moak 

ENSURE YOUR FINANCIAL PRIVACY

The information in this column is not intended as legal advice but to provide a general understanding of the law. Any readers with a legal problem, including those whose questions are addressed here, should consult an attorney for advice on their particular circumstances.

There is a federal law that affords consumers significant say over the privacy of their financial information while still allowing financial institutions to share information for normal business purposes. This Act covers banks, savings and loan institutions, credit unions, insurance companies, securities firms, and even some retailers and automobile dealers that extend or make arrangements for consumer credit.

There may be more forms of personal information gathered by the institutions than you realize. They may have credit reports and records of how much you buy and borrow, where you shop, and how well or poorly you pay your bills on time.

The Act protects your financial privacy in three basic ways: First, in a privacy notice, the institution must tell you what kinds of information it collects and the types of businesses that may be provided with it. Institutions must send out a privacy notice once a year. Second, if the institution is going to share your information with anybody outside its corporate family, it must give you the opportunity to “opt out” of that kind of information sharing. The third layer of protection requires the institutions to describe how they will go about protecting the confidentiality and security of your information.

A privacy notice from your bank may not be the kind of mail you rip open with eager anticipation, but you should take the time to look it over carefully all the same. Somewhere in the formal verbiage you should look especially for these items:

What kinds of information may be shared, both with affiliated companies and with outsiders? Don’t expect great specificity on this in the notice itself. The Act requires only a description of basic categories of information, with some examples.

What information can you not prevent your financial institution from sharing? Recognizing some circumstances in which the institutions should be allowed to share financial information with outsiders without the consumer’s consent, the Act does not allow you to stop the sharing of information that is needed to help conduct normal business (such as for outside firms that process data or mail statements); to protect against fraud or unauthorized transactions; to comply with a court order; or to comply with a “joint marketing agreement” entered into with another institution.

How do you go about “opting out” of the sharing of information of outside entities? Sounds simple enough, but the institution may require you to exercise this option by calling a specific phone number or by completing a form and mailing it to a particular address. If you opt out by phone, to be safe you may want to follow up with a written version, keeping a copy for your records.

Our privacy rights are particularly sensitive, especially when dealing with finances. Take the time to carefully read the notices you are sent and make sure you are protecting your privacy. It should reduce the number of solicitors and may prevent the theft of your identity.

Sam A. Moak is an attorney with the Huntsville law firm of Moak & Moak, P.C. He is licensed to practice in all fields of law by the Supreme Court of Texas, is a Member of the State Bar College, and is a member of the Real Estate, Probate and Trust Law Section of the State Bar of Texas.

www.moakandmoak.com

 

 

 

Read More

FREQUENTLY ASKED QUESTIONS ABOUT GUARDIANSHIPS

Posted by on Jun 27, 2014 in Elder Care Law, Family Law | 0 comments

“THE LEGAL CORNER”

By Sam A. Moak

Frequently Asked Questions About Guardianships

 The information in this column is not intended as legal advice but to provide a general understanding of the law. Some of the information in this column was prepared by the State Bar of Texas and is reprinted in this column with permission. Any readers with a legal problem, including those whose questions are addressed here, should consult an attorney for advice on their particular circumstances.

 While I am an advocate for the use of a Power of Attorney to avoid guardianships, I realize there are times when a guardianship cannot be avoided. Therefore, in this week’s column I will address some of the more frequently asked questions regarding guardianships.

How does one go about initiating a guardianship?

Any interested party may file an application with the proper court requesting that a guardian be appointed for a person believed to be incapacitated.

 What is the definition of an incapacitated person?

A person may be found to be incapacitated if due to a mental or physical condition he or she is unable to: (1) provide food, clothing, or shelter for himself or herself; (2) care for his or her own physical needs, or (3) manage his or her own financial affairs. A finding of incapacity will allow the person to be placed under guardianship. A minor person (someone under 18 years of age) and missing persons are also considered to be incapacitated.

Once a guardian is appointed, does the incapacitated person lose all rights and powers?

Not necessarily. A judge may appoint a guardian for an incapacitated person, but limit the guardian’s powers so that all rights and powers except those granted to the guardian are retained by the incapacitated person.

 Who may serve as guardian?

The court will appoint a guardian for an incapacitated person in the following order of priority: (1) the incapacitated person’s spouse; (2) the person’s nearest kin; and (3) an eligible person who is best qualified to serve.

 Do the types of guardians vary?

Yes. Generally, there is a guardian of the person and a guardian of the estate. The guardian of the person has the duty and power to provide the incapacitated person with clothing, food, medical care, and shelter. The guardian of the estate has the duty and power to manage the incapacitated person’s financial affairs. One person can fill both positions.

 Who is not allowed to serve as guardian?

A person may not be appointed guardian if the person is a minor, a notoriously bad person, an incapacitated person, a person who is a party to a lawsuit affecting the incapacitated person (with some exceptions), a person who owed the incapacitated person money, unless it is repaid, a person with adverse claims to the incapacitated person or his property, an inexperienced or uneducated person, a person the court finds unsuitable, a person eliminated in a person’s designation of guardian, or a nonresident without a resident agent.

 Are there costs involved in a guardianship?

Yes. Obtaining a guardianship involves filing a lawsuit regarding a person’s rights and is therefore typically, very costly. These cost include attorney’s fees, filing fees, attorney ad litem fees, and bond premiums to be paid out of the incapacitated person’s estate.

What rights are retained by the incapacitated person?

The incapacitated person has the right to receive a copy of the application for guardianship and other documents filed with the County Clerk. He or she is also entitled to be at the hearing to determine whether he or she is incapacitated.

Is an alleged incapacitated person represented by an attorney?

Yes. When a guardianship is filed, the court appoints an attorney ad litem to represent the interests of the alleged incapacitated person. The person can also retain his or her own attorney.

What happens at a guardianship hearing?

The person who filed the application must prove the incapacity through testimony and medical evidence. The alleged incapacitated person has a right to bring his or her own witnesses to court and also the right to speak to the judge. The alleged incapacitated person may also request a jury trial. The judge or jury will determine if the person is incapacitated.

How soon can a guardianship hearing be held?

The earliest date to schedule a hearing is the Monday following the expiration of 10 days after the alleged incapacitated person has been personally served with the application of guardianship.

Upon appointment, how does a guardian qualify?

The guardian must file an oath and post a bond in the amount set by the court to insure proper performance of his or her duties.

Does the guardian have reporting requirements to the court?

Yes. The guardian of the estate must file an inventory within 30 days of qualifying. The inventory must list all assets of the incapacitated person coming into the guardian’s hands and all debts owed to the estate. The guardian of the estate must file an annual account to report all receipts and disbursements. The guardian of the person must file an annual report on the location, condition, and well-being of the incapacitated person.

What if there is an immediate need for the appointment of a guardian?

A temporary guardian can be appointed without notice to the proposed incapacitated person if his or her person or property is in imminent danger. Usually a temporary guardianship will not exceed sixty 60 days. However, if a permanent guardianship application has been filed and is contested or challenged, the court may appoint a temporary guardian to serve as temporary guardian until the contested guardianship action is resolved.

Does the person for whom a temporary guardianship has been appointed have any rights?

Since that person is not presumed to be incapacitated, he or she retains all rights and powers not granted to the temporary guardian. He or she is entitled to be served with a copy of the documents that are filed. The court must appoint an attorney to represent the alleged incapacitated person. The court must hold a hearing no later than ten 10 days after the date of filing the temporary guardianship to determine whether there is a need for continuation of the temporary guardianship.

Pursuing a guardianship for a loved one can be a difficult process, emotionally and legally. An attorney can assist you in determining if a guardianship is appropriate for your particular situation. If you have further questions or are considering a guardianship for a loved one, you should consult your attorney.

Sam A. Moak is an attorney with the Huntsville law firm of Moak & Moak, P.C. He is licensed to practice in all fields of law by the Supreme Court of Texas, is a Member of the State Bar College, and is a member of the Real Estate, Probate and Trust Law Section of the State Bar of Texas.

www.moakandmoak.com

 

 

Read More

Stop Inheritance Feuds Before They Start

Posted by on Apr 25, 2014 in Estate Planning, Uncategorized | 0 comments

top

“THE LEGAL CORNER”

By Sam A. Moak

STOP INHERITANCE FEUDS BEFORE THEY START

The information in this column is not intended as legal advice but to provide a general understanding of the law. Any readers with a legal problem, including those whose questions are addressed here, should consult an attorney for advice on their particular circumstances.

Family members routinely fight over cash, stocks and other large assets after a relative dies. But some of the most bitter fights are over trinkets. More than half of lawsuits over inheritances involve items worth less than 10 percent of a person’s estate, according to an article on dailyfinance.com. That’s because they have emotional not financial value. One family fought over their mother’s passport, even though it had no financial worth.

 To avoid such fights, conversations should be started early. Either the older or the younger generation may initiate this talk, but the idea is to get an idea of who wants what. To assist in this you should make an inventory of your possessions to discuss with your attorney. Share the list with family members.

 It is also a good idea to have your property appraised. You can use the local appraisal district’s valuation for real estate, but understand it may not be accurate. Personal property items, other than automobiles, may be difficult to assign values to, so seek help. If there is a great disparity in value of items, then you might consider selling them. Cash is always easier to divide among heirs.

You know your family better than anyone else. If you know they do not see eye to eye, do not rely on them being able to work together to divide assets. You will have to divide them or give your executor the ability to do so. However, please make every effort not to burden your executor with refereeing family disputes.

You might consider including a list of personal property in your Will. However, be aware your Will becomes a public record and the whole world will be able to see the list. Talk to your attorney about alternatives to listing items in your Will.

The best way to avoid a fight or conflict is through careful planning, done way ahead of time. Do not put off until tomorrow what needs to be done today. Seek the guidance and advice of an attorney who handles estate planning. There is a good chance he or she will have experience with “sticky” matters and how to best avoid them.

Sam A. Moak is an attorney with the Huntsville law firm of Moak & Moak, P.C. He is licensed to practice in all fields of law by the Supreme Court of Texas, is a Member of the State Bar College, and is a member of the Real Estate, Probate and Trust Law Section of the State Bar of Texas.

www.moakandmoak.com

Read More

What are Nonprobate Assets?

Posted by on Apr 11, 2014 in Estate Planning | 0 comments

“THE LEGAL CORNER”

By Sam A. Moak

WHAT ARE NONPROBATE ASSETS

The information in this column is not intended as legal advice but to provide a general understanding of the law. Any readers with a legal problem, including those whose questions are addressed here, should consult an attorney for advice on their particular circumstances.

 One of the more common complaints about attorneys is their use of too much legalese. Unfortunately legalese is all too common in real estate and estate planning practice. This week I will try and clarify one of these areas.

Probate is the legal process of administering a deceased person’s Will or the estate of a person who dies without a Will. Remember, just because someone dies with a Will does not automatically mean they must go through the probate process. This depends on what type of property they owned at their death and how well their Will was drafted. If someone passed away and left a Will, be sure to check with an attorney skilled in this area to determine if there is a need to probate the Will.

Only property owned by the decedent at death can be disposed of by a Will. A Will cannot dispose of “nonprobate assets.” What are nonprobate assets ? They are assets which pass at death other than by Will or intestacy. The principal types of nonprobate assets include property passing by contract, property passing by survivorship, and property held in trust.

 Property passing by contract includes life insurance proceeds, IRAs and employee benefit plan proceeds, such as the proceeds payable under a pension, profit-sharing, or employee retirement plan. These assets pass outside the Will to the persons named by the decedent in the appropriate beneficiary designations. Thus, it is important to periodically review the beneficiary designations with respect to these types of assets and to update them as necessary.

 Property held by the decedent and another person as joint tenants with right of survivorship passes outside the Will directly to the survivor. Survivorship assets typically include certain types of bank accounts, certificates of deposit, stocks and bonds, and certain savings bonds issued by the United States Government, such as Series EE savings bonds. If these are not addressed when you prepare your Will, then all your careful estate planning could be for naught.

 Another category of property that passes outside of probate is property held in trust for the benefit of the decedent. The trust may have been created by the decedent during his or her lifetime for property management purposes or by someone else, such as a parent of the decedent. Trust assets pass under the terms of the trust rather than under the terms of the decedent’s Will.

 It is important to determine the extent of one’s nonprobate assets when planning the disposition of one’s property at death. If a substantial portion of the assets are nonprobate assets that do not pass under the Will, even a well-drafted Will may be insufficient to carry out the testator’s intent in disposing of his or her property. If you intend for life insurance proceeds, IRAs and employee benefit plan proceeds or bank accounts, certificates of deposit, stocks and bonds, and certain savings bonds to pass under your Will, these beneficiary and joint tenancy designations should be carefully examined. Therefore, be sure to provide your attorney with information regarding all of your possessions so that he may be sure to address them when discussing your Will.

Sam A. Moak is an attorney with the Huntsville law firm of Moak & Moak, P.C. He is licensed to practice in all fields of law by the Supreme Court of Texas, is a Member of the State Bar College, and is a member of the Real Estate, Probate and Trust Law Section of the State Bar of Texas.

www.moakandmoak.com

Read More

Business Start-Up Checklist

Posted by on Mar 14, 2014 in Business | 0 comments

“THE LEGAL CORNER”

By Sam A. Moak

BUSINESS START-UP CHECKLIST

The information in this column is not intended as legal advice but to provide a general understanding of the law. Any readers with a legal problem, including those whose questions are addressed here, should consult an attorney for advice on their particular circumstances.

 Both heart and mind must be working well if the owners of a new small business are to experience success. While it is only human nature, not to mention fun, to indulge one’s imagination about what a new business started from scratch could be like, would-be entrepreneurs need to engage in some cold, hard thinking and planning before taking the plunge. At the risk of pouring cold water on some of the anticipation and excitement, what follows is a guide for how to plan for and think through the many decisions that must be made well before you have that “Grand Opening” sign made.

Why?

This may seem obvious, but you should know just what your reasons are for wanting to start a new business. If the motivations are weak, odds are the business will be a bust, but well-founded reasons can help a business persevere through good times and bad. Some common reasons for starting a new business include escaping the whole 9-to-5 routine (though it may be replaced by an 8-to-8 routine), answering to no one else, upgrading your standard of living, and being convinced that you can provide a needed product or service.

Why Me?

Let’s face it, not everyone is cut out to be a captain of industry, or even captain of a small business. Maybe you need not subject yourself to an intensive psychological and life-experiences evaluation, but be honest with yourself about whether you have the necessary characteristics, skills, and experience. A few examples give you the idea:

Can you make yourself pull the trigger on an important decision?

Do you see competition as exciting or just stress-inducing?

Are you willing and able to plan ahead?

Do you like interacting with people you don’t know?

Do you have the perseverance, not to mention the physical stamina and health, to put in long hours if that’s what is needed to make the business succeed?

Are you, and anyone else financially dependent on you, prepared to risk your savings in pursuit of the business dream if that’s what it takes?

Unless you are planning a one-man band of a business, are you comfortable with hiring, supervising, and possibly having to fire other people?

Are you reasonably well organized?

Do you know anything about the paperwork and legal side of running a business, such as payroll and accounting, the permits or licenses you will need, or the regulations and laws that may apply to the business?

Why This Business?

You may have the best motives and a skill set that would be the envy of any MBA graduate, but if there is no niche for your planned business, or, simply put, if not enough people will want to buy what you are selling, the new business will fail. The variables here include timing, location, and simply whether your business is feasible or practicable, so that you can be the one to fill that niche that you have first identified. Don’t make your business the equivalent of carrying coals to Newcastle.

In economic terms, you want to do some investigation to determine if there is some currently unmet demand for the product or service you want to supply. Then you want to meet that demand with a product or service that is competitive in quality, selection, price, and/or location. In short, learn as much as you can about the market you will be in. Learn who your customers will be and try to understand their needs and desires. Anticipate how your fledgling business will compare with any established competitors. What can you do in setting up and running the business to make sure you get your share of whatever market there is for your product or service?

How?

Turning the idea into bricks and mortar (literally or figuratively) involves a lot of decisions, some of which are best made only after getting professional advice. Still, you should acquire at least a layperson’s understanding of the pros, cons, and consequences of each decision.

Choose a name for the business that you find appealing, but also one that is informative for someone hearing it for the first time. Select the most appropriate business form, such as a sole proprietorship, a partnership, or a corporation. Investigate which local, state, and federal laws and regulations will apply to the business. This will run the gamut from laws of universal application (e.g., taxes) to laws specific to your business.

Make an unflinching and detailed examination of your financial picture. How much do you have now, how much will you need to start the business, and how much will you need to stay in business? Projecting cash flow into the future means taking into account such variables as seasonal trends in sales, the amount of cash taken out of the business for personal expenses, whether and when to expand the business, and the rate at which customers will pay off accounts if credit is extended to them.

Find a location for the business that is convenient for customers, appropriate in size and configuration, and zoned so as to allow your type of business. When you have settled on the product or service you will sell, calculate the inventory you should create and maintain and locate reliable suppliers.

Finally, if you go to all the trouble and expense involved in creating a small business, don’t forget to think about protecting against losing the business from such threats as fire, theft, robbery, vandalism, and liability for an accident. This means taking measures to provide security, but also arranging for the appropriate types and levels of insurance.

There are several excellent local resources to assist you with starting a business, the Small Business Development Center at Sam Houston State University, your local banker, financial advisor, CPA, the Chamber of Commerce, insurance agent and an attorney who is well versed in the formation of business entities.

Sam A. Moak is an attorney with the Huntsville law firm of Moak & Moak, P.C. He is licensed to practice in all fields of law by the Supreme Court of Texas, is a Member of the State Bar College, and is a member of the Real Estate, Probate and Trust Law Section of the State Bar of Texas.

www.moakandmoak.com

Read More

HOW TO AVOID A CONTESTED PROBATE

Posted by on Feb 21, 2014 in Elder Care Law, Estate Planning | 0 comments

Pics for column

“THE LEGAL CORNER”

By Sam A. Moak

How to Avoid a Contested Probate

The information in this column is not intended as legal advice but to provide a general understanding of the law. Any readers with a legal problem, including those whose questions are addressed here, should consult an attorney for advice on their particular circumstances.

I, like many elder law attorneys, spend a large part of my practice engaged in preventive law. Preventive law is a law practice that seeks to anticipate and prevent legal problems and litigation. It is an approach found in several other areas of law besides elder law and estate planning. Many of us who practice elder law already use counseling techniques and many of the documents we prepare with the goal of avoiding litigation (such as an expensive trip to probate court or other legal or financial harm that might have been avoided with appropriate planning).

The conduct of an attorney would of course vary with the situation and depend on the unique circumstances of the case or conflict. With that said, there are some behaviors that would distinguish the peacemaking mindset, and which would be designed to obtain win-win outcomes. These include a willingness to (1) agree to stipulations as to facts and the admission of evidence along with other requests to hasten the proceeding; (2) accommodate requests from opposing party or counsel for schedule changes due to illness, family, or work responsibilities; and (3) avoid the “gotcha” strategy when a mistake is made by an opposing party or counsel; and (4) abstain from negative personal or otherwise disparaging comments. This list is not meant to be exclusive or exhaustive – the bottom line for all these “indicia” of the avoiding conflict mindset is that the attorney acting as a peacemaker is an erstwhile advocate for family or intergenerational healing and that this restorative approach can be consistent with the interests of the client.

 When elder law attorneys act as probate peacemakers or as elder/probate mediators, they bring their substantive knowledge of and familiarity with these preventive steps and techniques. This combination of substantive experience and the preventive approach to a problem or set of problems combine in a way that can help predict how a client and members of a family or another interested group might behave in the future. That can mean that an attorney serving as a peacemaker or as counsel to a disputing party can help ensure that the client has the benefit of strategic advice before future problems or troubles appear on the horizon. To the extent that a dispute is not definitively resolved by some process, or if related issues crop up, a peacemaker can be enlisted to draft an agreement that can guide the parties toward productive management of anticipated future disputes.

 If it is your desire that your final wishes be carried out without conflict or litigation, then you should seek the assistance of an attorney experienced in Probate, Estate Planning and Elder Law matters. He or she can guide you with regard to decisions and language that will make the transfer of your assets a peaceful experience instead of a stressful one.

If you have a question regarding Elder Law, Estate Planning, Living Trusts or Probate in the Huntsville area, please contact us at 936-295-6394 or visit our website. Call today and we will connect you with an experienced Elder Law and Probate Attorney. We can schedule you a face to face appointment to discuss your circumstances. If you have questions or are considering any aspect of your estate plan, probate, your health care directives, etc. we can help! Call us now at 936-295-6394 . We look forward to hearing from you and assisting you with any and all elder law and estate planning needs.

 Sam A. Moak is an attorney with the Huntsville law firm of Moak & Moak, P.C. He is licensed to practice in all fields of law by the Supreme Court of Texas, is a Member of the State Bar College, and is a member of the Real Estate, Probate and Trust Law Section of the State Bar of Texas.

www.moakandmoak.com

Read More