Moak and Moak, P.C.

ESTATE PLANNING WITH PRIVATE REVERSE MORTGAGES

sammoak — Sun, 26 Feb 2012 14:20:41 +0000

“THE LEGAL CORNER”

By Sam A. Moak

ESTATE PLANNING WITH PRIVATE REVERSE MORTGAGES

I have never been a fan of Reverse Mortgages. Reverse mortgages, usually obtained from financial institutions, allow people who are at least 62 years of age to convert their home equity into cash, which is received by the homeowner either as a lump sum, a line of credit, or monthly payments. The loan becomes due, with interest, when the borrower dies, moves out of the home, sells it, or fails to pay property taxes or homeowners insurance. The end result is often that heirs of the owner sell the house, pay off the loan, and keep the difference.

Since an institution involved in a reverse mortgage is advancing money without knowing for sure when it will be repaid, there are high up-front costs for commercial reverse mortgages. Fees can be as much as 5% of a home’s value, and required mortgage insurance premiums can range from 0.1% for loans with a low payout to 2% for those with a higher payout.

As an alternative to commercial lenders, some families set up private reverse mortgages. A private reverse mortgage is basically a private loan to the homeowner, usually from a family member, that is secured by a mortgage on the senior’s house.

For the senior homeowner, a private reverse mortgage can have these advantages:

The costs of having an attorney set up the mortgage should be reasonable and a lot less than the costs of a conventional reverse mortgage with a bank, and there are no ongoing mortgage insurance costs. Also, the interest rate, set each month by the IRS, should be less than the rate on a commercial mortgage.

Since there is no limit on the percentage of the home equity that can be borrowed, the owner can tap into more of that equity and put farther off the day when he or she has to move for financial reasons.

A private reverse mortgage need not be paid back until the house is sold, leaving open the option of the owner’s moving to a nursing home but keeping the house.

The owner can continue to receive payments on the mortgage if needed to maintain the house or to pay for extra care at a nursing home.

For the lending family members, the arrangement can have these advantages over a reverse mortgage with a financial institution:

The financial benefits for the senior family member carry forward to the whole family, because savings on mortgage costs should translate into a bigger estate ultimately passing on to surviving family members.

The flexibility to tap into more equity in the home could give family members the option to hire more paid caregivers or even to pay themselves for providing such care.

Even though interest rates for private reverse mortgages set by the IRS are pretty low, they still return more than can be earned in money market accounts or certificates of deposit. In other words, it beats having money just sitting in a bank.

There are some cautionary aspects to private reverse mortgages. Lending family members need to anticipate that the money they advance may not come back to them for a long time. It is also prudent to consider that there is some risk that the entire loan may not be paid back, if the ultimate proceeds from the sale of the home are insufficient to pay off the loan, with interest. Of course, these and any other concerns should be fully aired and taken into account when the private reverse mortgage is being contemplated in the first place and when its terms are set. Certain family dynamics may not allow a private reverse mortgage to work either.

If you are thinking of a reverse mortgage as a way to obtain cash or looking for ways to transfer assets in your estate, you should sit down with an attorney familiar with real estate and estate planning to find out what will work best for you.

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

TECHNOLOGY AND OUR “SEASONED” LOVED ONES

sammoak — Sun, 12 Feb 2012 13:56:36 +0000

“THE LEGAL CORNER”

By Sam A. Moak

Technology and our “Seasoned” Loved Ones

There is a common complaint among Baby Boomers when it comes to aging parents and grandparents: It’s hard to keep in touch with them. Most communication among the middle and younger generations now takes place on the computer—e-mail, Facebook, electronic photo-sharing and more. Very rarely do we pick up the phone for a good old-fashioned chat; and, when we do, it’s usually on the go, in the form of a quick call or text message from our cell phones. Unfortunately, where all this technology helps us to be more connected to friends and family who also use these technologies, it may end up leaving our “seasoned” loved ones out of the conversation.

We do not have to leave our non-technological loved ones out. The key to getting these relatives involved in high-tech communication is to look at it from their point of view. For technology to become attractive to grandma and grandpa, we have to get into their heads and understand what would make them think this is fun. The bells and whistles that might attract us are often too counterintuitive for them.

The younger, tech-savvy generations tend to look for high-tech devices that do everything, but that’s not necessarily what’s going to be appealing to grandma or grandpa. Perhaps a single purpose gadget, designed solely for email or sharing photos, would be more appealing to them.

New high-tech devices may be harder for parents or grandparents to use and honestly they can be for me too. However, being able to connect with their loved ones can be a huge motivating factor. Being able to communicate with family makes our elderly parents and grandparents happy, but it also helps keep them safe. Adult children who communicate with their parents on a regular basis are better able to recognize and respond when mom or dad suddenly have trouble caring for themselves.

Many of you may not be fortunate enough to live close to your parents or grandparents and technology can provide a way to keep tabs on them. Technologies exist that allow for the movements of our loved ones to be monitored by sensors and relayed by computer if help is necessary. Studies conducted by the AARP Foundation and the Center for Aging Services Technologies (CAST) of the American Association of Homes and Services for the Aging both show a willingness of seniors to use these technological types of equipment if it allows them to stay in their home. I guess instead of Big Brother Watching it is Son or Daughter.

While these monitoring systems in varying configurations have been used in long-term care and assisted-living communities, their move into private residences is more recent. Some home health agencies are offering them as part of their service.

These new systems go way beyond the simple push-button “I’ve Fallen and I Can’t Get Up” alerts to monitor movements, change in behaviors, and even health status such as blood pressure and weight. Systems vary in cost, monthly fees, and technical assistance. Some you rent, others you buy outright. If you are in an apartment or considering a move in the near future, portability may be an issue to consider as well.

Daily interaction with others, particularly family, and a non-intrusive daily check on your loved one’s well being can greatly increase their quality of life. So, technology can be a great benefit to you and your loved ones, if embraced properly.

www.moakandmoak.com

ESTATE PLANNING WITH BUSINESS ENTITIES

sammoak — Sun, 22 Jan 2012 14:24:18 +0000

“THE LEGAL CORNER”

By Sam A. Moak

Estate Planning with Business Entities

When people think of estate planning, the first ideas that typically come to mind are of wills, trusts, powers of attorney, and guardianship arrangements. Traditionally, those instruments have been closely associated with estate planning simply because they are legal tools exclusively dedicated to helping people pass on their assets or otherwise ensure that loved ones are cared for.

While the traditional tools work very well at accomplishing their designated tasks, you might be surprised to learn that they are not the only tools available for estate planning. Depending on your particular assets and desires, then the use of a limited partnership, limited liability company, corporation may be right for the situation.

All of the business entities mentioned above are common when a business is owned by different individuals. While the primary purpose for forming one of these business entities is for liability protection, they also provide for a means to manage the business and eventually shift ownership.

Limited partnerships have general and limited partners, the general partner(s) are responsible for management and decision making. The limited partners are investors or owners with no management or decision making authority.

Limited liability companies and corporations have either membership holders or shareholders. Typically the membership/shareholder(s) elect the officers who are responsible for management or decision making. Thus, the membership/shareholder(s) with the greater number of membership interests or shares control.

The interests in all of these forms of business entities are something that can be transferred over time, therefore making a perfect vehicle for parents or grandparents to maintain control over assets owned by the business entity until they pass away or are ready to shift the majority of the ownership over to the next generation for control. An additional benefit is that the family also has liability protection. So, using a family owned ranch/farm for example, if one family member is sued or found liable in some accident, then the assets of the other family members in ranching/farming business with them are not susceptible to being taken. Another benefit is that incidents such as incapacity, death or divorce, can be addressed in the governing documents. This means that should one of these events occur, there is a plan for how the property owned by the business entity is transferred.

If you are thinking of working on your estate plan, then perhaps one of these business entities is right for you. Or maybe you are a candidate for a more traditional plan. In either case, you should sit down with an attorney familiar with traditional plans and business entities to find out what estate plan is best for your needs.

www.moakandmoak.com

DO I HAVE TO PROBATE THIS WILL?

sammoak — Sun, 15 Jan 2012 14:04:53 +0000

“THE LEGAL CORNER”

By Sam A. Moak

Do I have to Probate this Will?

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.
A common question I am asked is what is probate and do I need to probate this Will? Estate administration is the management and settlement of a deceased person’s estate by a personal representative approved by the court. Estate administration does not require a Will. Probate is the formal process of administering a person’s estate when they had a Will. Probate may not be necessary when the decedent’s estate is so small that no action is necessary to distribute the property to the beneficiaries or heirs.

However, probate is required in most other circumstances. In fact in a recent case the court ruled a Will not admitted to probate is not effective for the purpose of proving title to real estate. Ratcliff vs. Polk County Title, Inc., No. 09-04-124-CV, 2004 WL 1925447 (Tex. App.-Beaumont. Aug.31,2004, pet.denied). In this case a title company was sued for defamation after the title company issued a title report (i.e., Commitment) that included a statement that Mrs. Ratcliff, a deceased owner of real property, died intestate. Mr. Elijah Ratcliff, Mrs. Ratcliff’s son and named executor in Mrs. Ratcliff’s Will, sued the title company on the grounds that Mrs. Ratcliff did, in fact, have a Will and, therefore, the title report was defamatory. The District Court rejected Mr. Ratcliff’s theory. The Appellate Court affirmed the District Court’s ruling and pointed out that although Mr. Ratcliff had previously filed an application to probate Mrs. Ratcliff’s Will, the Will was never presented for action in the Court. Citing Texas Probate Code Section 94, the Appellate Court ruled that until a Will has been admitted to probate, it is not effective for the purpose of proving title to real property; thus, in that context, the title report was not defamatory.

In Texas, there are several different methods of administering an estate, some of the more common are Independent Administration, Probating the Will as a Muniment of Title, filing a Small Estate Affidavit, and filing an Informal Family Settlement.

If the decedent owned real property at their death, then something must be done to properly transfer the property. Usually this is not discovered until the family of the decedent decides to use, sell, or partition the property. It could also arise if there is a dispute as to payment of expenses or taxes on the property. Without a Will this process can be complicated, involve contacting many heirs, and take a great deal of time.

Please note there are limitations as to which form of probate may be used depending on the situation. Therefore, check with your attorney to decide which method of estate administration is right in your particular circumstance. It could save you time and money.

www.moakandmoak.com

THE NIGHT BEFORE CHRISTMAS, LEGALLY SPEAKING

sammoak — Sat, 24 Dec 2011 16:00:19 +0000

“THE LEGAL CORNER”

By Sam A. Moak

THE NIGHT BEFORE CHRISTMAS, LEGALLY SPEAKING

The information in this column is not intended as legal advice but to provide a smile during this holiday season. Any readers with a legal problem should lighten up this week, life is precious, so enjoy your family and friends now and join the real world after January 2, 2012.

It is time again for another great Christmas tradition. So, gather your parties around the fire (or simulated fireplace built by the Amish), whether plaintiff or defendant, ad litem, guardian or children (natural born and adopted), to hear The Night Before Christmas, Legally Speaking.

Whereas, on or about the night prior to Christmas, there did occur at a certain improved piece of real property (hereinafter “the House”), a general lack of stirring by all creatures therein, including, but not limited to, a mouse.

A variety of foot apparel, e.g. stockings, socks, etc., had been affixed by and around the chimney in said House in the hope and/or belief that St. Nick a/k/a St. Nicholas a/k/a Santa Claus (hereinafter “Claus”) would arrive sometime thereafter.

The minor residents, i.e. the children, of the aforementioned House were located in their individual beds and were engaged in nocturnal hallucinations, i.e. dreams, wherein visions of confectionery treats, including, but not limited to, candies, nuts and/or sugar plums, did dance, cavort and otherwise appear in said dreams.

Whereupon the party of the first part (sometimes hereinafter referred to as “I”), being the joint-owner in fee simple of the House with the party of the second part (hereinafter “Mamma”), and said Mamma had retired for a sustained period of sleep. (At such time, the parties were clad in various forms of headgear, e.g. kerchief and cap.)

Suddenly, and without prior notice and warning, there did occur upon the unimproved real property adjacent and appurtenant to said House, i.e. the lawn, a certain disruption of unknown nature, cause and/or circumstance. The party of the first part did immediately rush to a window in the House to investigate the cause of such disturbance.

At that time, the party of the first part did observe, with some degree of wonder and/or disbelief, a miniature sleigh (hereinafter “the Vehicle”), being pulled and/or drawn very rapidly through the air by approximately eight (8) reindeer. The driver of the Vehicle appeared to be and in fact was, the previously referenced Claus.

Said Claus was providing specific direction, instruction and guidance to the approximately eight (8) reindeer and specifically identified the animal co-conspirators by name: Dasher, Dancer, Prancer, Vixen, Comet, Cupid, Donner and Blitzen (hereinafter “the Deer”). (Upon information and belief, it is further asserted that an additional co-conspirator named “Rudolph” may have been involved.)

The party of the first part witnessed Claus, the Vehicle and the Deer intentionally and willfully trespass upon the roofs of several residences located adjacent to and in the vicinity of the House, and noted that the Vehicle was heavily laden with packages, toys and other items of unknown origin or nature.

Suddenly, without prior invitation or permission, either express or implied, the Vehicle arrived at the House, and Claus entered said House via the chimney.

Said Claus was clad in a red fur suit, which was partially covered with residue from the chimney, and he carried a large sack containing a portion of the aforementioned packages, toys, and other unknown items. He was smoking what appeared to be tobacco in a small pipe in blatant violation of local ordinances and health regulations.

Claus did not speak, but immediately began to fill the stockings of the minor children, which hung adjacent to the chimney, with toys and other small gifts (Said items did not, however, constitute “gifts” to said minors pursuant to the applicable provisions of the Internal Revenue Code (“I.R.C.”)

Upon completion of such task, Claus touched the side of his nose and flew, rose and/or ascended up the chimney of the House to the roof where the Vehicle and Deer waited and/or served as “lookouts.”

Claus immediately departed for an unknown destination. However, prior to the departure of the Vehicle, Deer and Claus from said House, the party of the first part did hear Claus state and/or exclaim:

“Merry Christmas to all and to all a good night!”

Or words to that effect.

Respectfully Submitted,

The Grinch, Esquire

I wish I could give the original author credit but he is unknown (although a certain family member has always tried to take credit). MERRY CHRISTmas EVERYBODY!!!

Sam A. Moak is and 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

All Estate Plans Are Not Necessarily Equal

sammoak — Sun, 11 Dec 2011 14:05:24 +0000

“THE LEGAL CORNER”

By Sam A. Moak

All Estate Plans are not Necessarily Equal

We’re all about equality, but the fact is that women have different estate planning needs than men. Whether they’re single or married, have children or no children, women have different things to think about when it comes to estate planning. This means that women need to be involved in the planning process: express their own wishes, voice their own concerns, and ask their own questions. Here are three of the ways that women are different from men—and how it affects their estate planning.

Women live longer than men.

Among the senior citizen population (65 and older) more than three times as many women as men are widowed. This longer life expectancy means two things; first of all it means that women are the ones who will likely have to deal with taxes. When a married person dies their assets can transfer to their spouse tax free. This doesn’t avoid taxes. It merely delays them, and the surviving spouse (the woman) will have to be the one to minimize the tax burden on the children. Second of all, women have to worry more about their retirement savings lasting them to the end. Estate planning is partially about distribution of your remaining assets when you die—it takes careful planning to ensure that you’ll have remaining assets after a long and active life.

Women are the caregivers.

This includes taking care of young children and elderly parents. Statistically, women are the ones who will initiate the estate planning process—mainly because they are concerned about the guardianship of young children. Women are also the ones who will eventually have most need of a caregiver agreement or help navigating the Medicaid application process when they’re caring for their older relatives.

Women need to be most concerned about loss of primary income.

Because men are still generally the primary breadwinners in a family, women are the ones most often left out in the cold when their spouse passes away and they lose that income stream. Women need not only to make sure they and their partner both have adequate insurance policies, they need to plan to keep those insurance proceeds and to avoid heavy taxes upon death.

It’s easy to see, when creating an estate plan, how important it is to protect and pass on your assets, but a good estate planner knows that a Will or a trust is not all about assets. In fact, for all of the technical and financial language you may find in your Will or trust, the most important part of the document is if—and how—it reflects your values.

You may think that values are something you’re more likely to discuss with your spiritual advisor than your estate planner, but we know you’ve worked hard to give your children and grandchildren a foundation of knowledge and belief to serve them when you’re not there. We want to help you create a thoughtful and comprehensive estate plan to help you continue doing just that.

There are a few ways in which you can use your estate plan to pass on your values:

You can impress upon your children or grandchildren the importance of education by leaving an inheritance to them in an educational trust.

Help your children or grandchildren learn to follow their dreams by earmarking part of the trust principal to be distributed should they want to start their own business.

Pass on your belief in the value of family by creating a special trust to support stay-at-home parents.

Teach fiscal responsibility by choosing to have distributions made gradually, helping your beneficiaries learn how to handle their finances responsibly and with maturity.

With the help of a caring and attentive attorney, you can leave a deeper legacy than mere money; you can impart your closely held values for generations to come.

All of these things can be discussed and planned for with your estate planning attorney—and it doesn’t take away from your spouse or children. In fact, having your own plan in order actually helps the important people in your life. So don’t wait any longer, plan to protect yourself today and in the future.

www.moakandmoak.com

sammoak — Tue, 06 Dec 2011 22:37:11 +0000

“THE LEGAL CORNER”

By Sam A. Moak

Homeowners’ Insurance: The Devil Resides in the Details

Reading and understanding all of the language in a homeowner’s insurance policy are not formalities to be skipped over while searching for the signature line. As with any contract, the fine print can have real and lasting consequences, and its contents will control over any contradictory verbal assurances. Taking the time to understand the terms of their policies might have headed off bad outcomes for homeowners in two recent cases.

Joan bought property consisting of a home, two barns, and other outbuildings. She also purchased a homeowners’ insurance policy that excluded coverage for any nondwelling structure that was rented out “unless used solely as a private garage.” Joan rented the barns to a commercial marina, which used them for storage of customers’ boats. When one of the barns collapsed due to a storm, Joan submitted a claim for loss of the barn.

The insurer denied coverage, prompting Joan to point out that the rental exclusion should not apply because the marina was using the barn as a “private garage.” Her point made sense as far as it went, but the insurer won because of a separate exclusion from coverage for any nondwelling “used in whole or in part for business purposes.” Joan’s main occupation was a financial analyst, and she brought in only a few thousand dollars by renting out the barn. But all that was necessary for the business purposes exclusion to apply was that the insured regularly engage in the conduct with an intent to profit.

It was significant for the court that, by failing to disclose her conduct, Joan had prevented the insurer from knowing the risks it was insuring. The purpose of a business pursuits exclusion, after all, is to rule out coverage for a whole set of risks and liabilities flowing from business activity. It did not matter that the damage to the barn was not caused by the boats that were stored there for profit.

At the heart of another dispute over homeowners’ insurance coverage was what turned out to be an erroneous assumption by the homeowners that “residents of your household” meant any persons living on the same parcel of land, even if in a different house. In this case Ken and June lived in a home. Their daughter, son-in-law and 10-year-old grandson lived rent-free in another house that was only 20 feet away and had the same mailing address. The close-knit family often shared meals and activities, and Ken and June regularly cared for their grandson.

When the grandson accidently shot a playmate with a rifle, Ken and June submitted a claim under their homeowners’ policy, which covered “residents of your household who are your relatives.” The insurance company succeeded in arguing that it had no obligation to defend the grandson in a suit for his friend’s injuries because he was not a resident of Ken’s and June’s household.

In legal terminology, a “household” is a collection of persons living together as a unit under one roof or within a single “curtilage.” “Curtilage” is a technical term for the area next to a house that is inside the same enclosure, is used for the intimate activities of the house, and is protected from observation by passers-by. The house where the grandson lived did not meet any of these criteria so as to make the grandson part of Ken’s and June’s “household.” The four individuals in this case probably constituted a household in many respects and for many purposes, but not in the context of interpreting the homeowner’s insurance policy.

When entering a contract, particularly one prepared or furnished by another, it is a good idea to review the document carefully. A better practice would be to have your attorney review the document for you. Do not put yourself in the position of reviewing your contract after a problem or claim has arisen. It may be too late.

www.moakandmoak.com

ORGANIZE YOUR ESTATE PLANNING DOCUMENTS

sammoak — Sun, 20 Nov 2011 16:10:33 +0000

“THE LEGAL CORNER”

By Sam A. Moak

ORGANIZE YOUR ESTATE PLANNING DOCUMENTS

I am commonly asked, “how long will the probate process take?” My patent response is, “that depends a great deal on how organized your loved one was.” If, like so many, you are prone to disorder in the keeping of important documents, assuming that you keep them at all, you may be well past due for a makeover of your estate plan and your end-of-life instructions. It is not just a matter of maintaining tidiness for its own sake; a lot of money and time could be saved by making your estate plan organized and accessible and then keeping it that way.

Yes, it is easier said than done, but consider a quick fact if you doubt the importance of this undertaking: According to some sources that study such things, state treasurers now hold over $32 billion (not million) dollars in unclaimed bank accounts and other such assets. Could your heirs find all of your assets?

Then there is the prevalent problem of some large insurance companies failing to pay out unclaimed life insurance policies to beneficiaries, claiming that under the insurance contracts they are obligated to do so only when the beneficiaries come forward. When the beneficiaries are not even aware of the existence of the policies, obviously they do not come forward, and years of premiums may have been paid for nothing.

The take-away lesson is that it is just as important to keep estate planning documents well organized and in a safe place, known to and accessible by your heirs, as it is to properly execute the documents in the first place. Any virtue can become a vice if taken to extremes, so this does not mean holding on to every scrap of paper that could conceivably be of interest to those you leave behind. Nonetheless, to possibly save your heirs a significant amount of money, time, and stress, at least the essential documents should be kept together, such as in a safe-deposit box, and/or at home in a fireproof safe that someone can access when the time comes. Instructions on how to dispose of your estate will not mean much if you have not left instructions on how to find the controlling documents.

Essential Documents to Organize:

So what are these essential documents that you should have well organized and accessible? Individual circumstances vary, but the first document for most people is an original Will. Dying without a Will means leaving the determination up to the state as to how your assets will be distributed, and if there is some writing, but not an original document, probate proceedings could become needlessly contentious and drawn out.

In addition to a Will (and any trust documents), what follows is a nonexhaustive, but reasonably comprehensive, list of other important documents, the existence and location of which should be known to your heirs:

Marriage license—A surviving spouse is likely to need it to prove that he or she was married to the deceased before being able to claim anything based on the marriage;

Divorce papers;

Durable health-care power of attorney (for health-care decisions if you are incapacitated), a Directive to Physicians, any do-not-resuscitate order, and an authorization to release health-care information;

Durable financial power of attorney (for financial decisions if you are incapacitated);

Documentation of ownership of property, including housing, land, cemetery plots, vehicles, stocks, bonds, etc.;

Proof of loans made and debts owed;

List of bank and brokerage accounts, with account numbers, and any safe-deposit boxes with the location of corresponding keys;

Tax returns for the most recent three years;

Life insurance policies and 401(k), pension, annuity, and IRA documents; and,

List of user names and passwords for Internet accounts.

With a little bit of foresight and planning, you can greatly reduce the administrative burden on your family and heirs after you pass, not to mention saving them time from having to discover and understand your affairs.

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

www.moakandmoak.com

Sad, Sad Day in Happy Valley

sammoak — Thu, 17 Nov 2011 23:21:04 +0000

“THE LEGAL CORNER”

By Sam A. Moak

Sad, Sad Day in Happy Valley

Most of you are aware of the very sad situation in Happy Valley, Pennsylvania. However, perhaps some of you have not read the paper, seen the 6 or 10 o’clock news, read the social media posts or have simply been under a rock, so this may be your first knowledge of the events. Gerald “Jerry” Sandusky, a former assistant coach at Penn State University, was indicted for sexually abusing young boys. As a result of the indictment, the university has dismissed its president, Graham Spainer, head coach, Joe Paterno, and athletic director, Tim Curley.

Most disturbing about this entire tragedy is that 8 young boys are the victims. However, because of the pedestal Joe Paterno was placed on by Penn State fans, the fact that he has been fired garnered the most reaction.

Sandusky created a charity, The Second Mile, as a group foster home for underprivileged children. It now appears Sandusky used this charity to gain access to young boys. While his acts with these victims are terrible, it is equally horrifying that a graduate assistant at Penn State University actually witnessed one “incident” in the Penn State athletic showers in 2002. The assistant reported it to his athletic director (Curley) and coach (Paterno). However, only now 9 years later, has Sandusky been indicted. Yet the assistant is now the wide receiver coach at Penn State University. By all appearances it seems the reputation of Penn State University’s football program and head coach out weighed the crime committed against this poor young victim.

Unfortunately, those adults who should have risen up to protect this young victim failed to do so. Sexual abuse is a terrible crime that unfortunately is part of our society. I am not familiar with Pennsylvania law, but really don’t need to be. I know that if I witnessed a child being sexually abused, I have a duty to report that. I can not imagine stopping my outcry until something was done to protect that child.

Anyone having cause to believe that a child’s physical or mental health or welfare has been or may be adversely affected by abuse or neglect MUST report the case immediately to a state or local law enforcement agency or the Texas Department of Family and Protective Services. Additionally, Texas Law requires that professionals such as teachers, doctors, nurses, or child daycare workers must make a verbal report within 48 hours. Failure to report suspected child abuse or neglect is a misdemeanor punishable by imprisonment of up to 180 days and/or a fine up to $2,000. Reporting suspected child abuse to your principal, school counselor or superintendent will NOT satisfy your obligation under this law. Local school district policy cannot conflict with or supercede the state law requiring you to report child abuse to a law enforcement agency.

I hope that you are never a witness to such a horrible crime, but if you find yourself in that position, or even if you suspect abuse or neglect, you must take action. I read in an article earlier this week, “bad things happen when good men fail to take action.” Failing to act, failing to protect those who cannot protect themselves is a furtherance of the crime.

If you can, go to http://www.wltx.com/news/pdf/Sandusky-Grand-Jury-Presentment.pdf for a copy of the full indictment. I will warn you the acts are egregious and described in detail. It is not for the faint of heart. Gerald “Jerry ” Sandusky will answer for his crimes. It is only fitting those who failed to act should pay for their inaction, no matter who they are or what the program.

www.moakandmoak.com

Texas’ Constitutional Amendment Election

sammoak — Tue, 01 Nov 2011 20:09:00 +0000

“THE LEGAL CORNER”

By Sam A. Moak

TEXAS’ CONSTITUTIONAL AMENDMENT ELECTION

Click here to learn more

A couple of years ago, October 2009, I wrote an article on some proposed amendments to the Texas Constitution. It was well received and we have ten (10) proposed amendments this year, so I am writing it again.

As a bit of history, the current constitution took effect on February 15, 1876. It is the seventh constitution we Texans have had dating back to the Constitution of the Republic of Texas in 1836.

Our current constitution is one of the longest in the United States. Additionally, it has been amended 467 (as of November, 2009) with another 176 proposed amendments rejected. The primary reason for the number of amendments is the Texas Constitution does not have a Necessary and Proper Clause and thus the State only has those power explicitly stated in the constitution.

Enough history, the purpose of this article is just to help the citizens of Walker County be prepared to cast informed votes on November 8, 2011 (or in the early voting through November 4, 2011). Therefore, I will state the Official Ballot Language and common arguments for and against each proposition.

I will not try to take sides or persuade anyone, other than my Mother (at her request), one way or the other.

PROPOSITION 1

The constitutional amendment authorizing the legislature to provide for an exemption from ad valorem taxation of all or part of the market value of the residence homestead of the surviving spouse of a 100 percent or totally disabled veteran.

Description

In 2007, Texans amended the constitution to provide an exemption to property (ad valorem) taxes on disabled veteran’s homestead.

The amendment would allow a surviving spouse of a disabled veteran to maintain that exemption.

Arguments For

* Currently, when the disabled veteran passes, the surviving spouse is required to resume paying property taxes. However, this may force the surviving spouse to sell the home. This amendment recognizes the sacrifices made by military families and helps to prevent this situation..

Arguments Against

* The state should not continue to grant additional tax exemptions because this would decrease the amount of tax revenues for funding schools, health care and other essential services. Additionally, in order to make up for the foregone tax revenues, the proposed amendment could result in local governments increasing property tax rates on other homeowners.

PROPOSITION 2

The constitutional amendment providing for the issuance of additional general obligation bonds by the Texas Water Development Board in an amount not to exceed $6 billion at any time outstanding.

Description

Would amend the constitution to authorize the Texas Water Development Board to issue additional general obligation bonds on a continuing basis (Evergreen) for one or more accounts of the Texas Water Development Fund II, with the restriction that the total amount of bonds outstanding at any time does not exceed $6 billion.

Arguments For

* This program has been successful, and is largely self-supporting through loan repayments. Without additional bond authority, TWDB will run out of elgible funds to provide financial assistance to political subdivisions to meet water and wastewater infrastructure needs.

* Authorizing going “evergreen” bond authority would allow TWDB to continuously fulfill its constitutional mission as well as simplify its bond authorization process. The risk of default is low.

Arguments Against

* Although the TWDB bonds could be considered largely self-supporting because the loans are repaid by political subdivisions, and the risk of default is low, the issued bonds are general obligation bonds (GO bonds) and any default would become an obligation of the state.

* This proposed constitutional amendment would provide for perpetual bond issuances and would break from traditional deliberative practice of requiring the legislature and voters to approve new bond issuances.

* If this amendment is approved and fully utilized, total outstanding GO bonds at the TWDB could increase by as much as $6 billion, and total state GO Bonds outstanding could increase above the approximately $14 billion currently outstanding, which is an excessive amount of debt.

PROPOSITION 3

The constitutional amendment providing for the issuance of general obligation bonds of the State of Texas to finance educational loans to students.

Description

Would amend the constitution to authorize the Texas Higher Education Coordinating Board (HECB) or its successors to issue and sell general obligation bonds on a continuing basis for the purpose of financing educational loans for students, subject to certain constitutional restrictions, including a restriction as to the maximum principal amount of bonds outstanding at any one time.

Argument For

* The program has been successful and is self-supporting through student loan repayments that cover the principal and interest on the bonds. Without additional bond authority, the HECB will run out of eligible funds to provide financial aid.

* Authorizing this amendment would provide the HECB continued and uninterrupted authority to provide students with low-interest, stable-rate educational loans.

Argument Against

* Although the risk of default is extremely low, and the HECB bonds are considered self-supporting because the students must repay the loans, the issued bonds are general obligation bonds (GO bonds) and a sudden increase in defaulted student loans beyond what the loan program could cover with reserves would become an obligation of the state.

* If this amendment is approved and fully utilized, total outstanding GO bonds at the HECB could increase by as much as $1.06 billion, and total state GO Bonds outstanding could increase above the approximately $14 billion currently outstanding, which is an excessive amount of debt.

PROPOSITION 4

The constitutional amendment authorizing the legislature to permit a county to issue bonds or notes to finance the development or redevelopment of an unproductive, underdeveloped, or blighted area and to pledge for repayment of the bonds or notes increases in ad valorem taxes imposed by the county on property in the area. The amendment does not provide authority for increasing ad valorem taxes.

Description

Would amend the constitution to authorize the legislature to permit a county to issue bonds or notes to finance the development or redevelopment of an unproductive, underdeveloped, or blighted area within the county, and to pledge increases in ad valorem tax revenues imposed on property in the area by the county for repayment of such bonds or notes. The amendment does not provide independent authority for increasing ad valorem tax rates.

Arguments For

* Using increases in ad valorem tax revenues resulting from improvements to an area is a reasonable way to finance the development or redevelopment of the area with out raising tax rates.

* Towns and cities already have this ability and the amendment would simply extend this authority to counties.

Arguments Against

* If the finance zone is unsuccessful and increased property tax revenues are insufficient to cover the debt service on the bonds, the taxpayers of the county would be responsible for covering this shortfall should the bonds have to be refinanced and secured by other county tax revenues.

PROPOSITION 5

The constitutional amendment authorizing the legislature authorizing the legislature to allow cities or counties to enter into interlocal contracts with other cities or counties without the imposition of a tax or the provision of a sinking fund.

Description

Would amend the constitution to authorize the legislature to allow cities and counties to enter into interlocal contracts with other cities and counties without having to assess an ad valorem tax and set aside a specified amount of funds for the payment of costs under the interlocal contract.

Arguments For

* Allowing cities and counties to enter into interlocal contracts to consolidate and share services is an effective and efficient use of public funds and could result in cost savings to taxpayers. This is not really “debt” in accordance with the general public’s understanding of the term.

Arguments Against

* Savings to taxpayers are not guaranteed by the use of interlocal agreements, and multi-year interlocal contracts have the potential to obligate future local governments with financial obligations that must be paid for with local tax revenues. The current law concerning multi-year contracts, taxes, and a sinking fund is meant to limit the number and scope of interlocal contracts and deliberately discourages governments from hastily entering into obligations that last beyond the terms of the elected officials agreeing to them.

* On a local note, we have all seen how well this has worked here.

PROPOSITION 6

The constitutional amendment clarifying references to the permanent school fund, allowing the General Land Office (GLO) to distribute revenue from permanent school fund land or other properties to the available school fund to provide additional funding for public education, and providing for an increase in the market value of the permanent school fund for the purpose of allowing increased distributions from the available school fund.

Description

Would amend the constitution to increase the amount of principal that is available for withdrawal from the permanent school fund each year and would also clarify certain references to that fund in the constitution. Increased access to the principal of the state public education trust fund would be based upon the amendment granting the authority to consider alternative market calculations when determining the amount of principal that is available for distribution to the available school fund. The proposed amendment would also provide authority to distribute to the available school fund annual revenue from school fund land or other properties up to $300 million per year.

Arguments For

* Including real assets, investments and cash in the state treasury derived from property managed by the GLO in the total asset base used for calculating fund distributions will more accurately reflect the full value of the Permanent School Fund (PSF) and increase the amount of funds available for distribution from the Available School Fund (ASF).

* The amendment would specifically authorize the GLO to distribute a limited amount of revenue earned on management of PSF properties directly into the ASF, providing a much-needed additional infusion of up to $300 million per year into the ASF for distribution to the state’s public schools.

Arguments Against

* Diverting to the ASF any revenue that otherwise would go into the PSF and increasing the corpus would be shortsighted and would violate the principle that all revenues from state lands are reinvested by the School Land Board (SLB) or State Board of Education (SBOE). Only a portion of the interest and earnings from these investments are meant to be distributed to the school children of Texas.

* Diverting up to $300 million per year in revenue that might otherwise go into the PSF and become part of the corpus would be tantamount to liquidating a permanent asset to satisfy a short-term need and would defeat the purpose of the investment fund.

PROPOSITION 7

The constitutional amendment authorizing the legislature to permit conservation and reclamation districts in El Paso County to issue bonds supported by ad valorem taxes to fund the development and maintenance of parks and recreational facilities.

Description

Would amend the constitution by adding El Paso County to the list of counties authorized to create conservation and reclamation districts to develop parks and recreational facilities financed by taxes.

Arguments For

* This amendment would give the districts in El Paso County additional flexibility in the financing of certain public projects deemed appropriate by local elected officials and voters.

Arguments Against

* Debt backed by property taxes should not be incurred for non-essential purposes like parks and recreation facilities.

PROPOSITION 8

The constitutional amendment providing for the appraisal for ad valorem tax purposes of open-space land devoted to water-stewardship purposes on the basis of its productive capacity.

Description

Would amend the constitution by requiring the legislature to provide for taxation of open space land devoted to water stewardship purposes on the basis of its productive capacity.

Arguments For

* Landowners would have an incentive to partner with the state to protect water quality and increase conservation efforts, while receiving a lowered property tax appraisal.

* The state’s overall goal to address water conservation and protect open space and water quality in rivers, streams and aquifers without resorting to taxing and spending.

Arguments Against

* While open space and water conservation are laudable goals, it would be more accurate to reduce the taxable value of the land based on the actual value of the water conservation efforts.

* The state should not continue to expand eligibility for tax breaks that ultimately decrease the amount of tax revenue available for schools, health care, and other services, and may result in increased taxes for those who do not receive the tax break.

PROPOSITION 9

The constitutional amendment authorizing the governor to grant a pardon to a person who successfully completes a term of deferred adjudication community supervision.

Description

Would amend the constitution to authorize the governor, on the written recommendation and advice of the Board of Pardons and Paroles, to grant a pardon, reprieve, or commutation of punishment to a person who successfully completes a term of deferred adjudication community supervision.

Arguments For

* A person who is actually convicted of certain crimes may seek the benefit of a pardon and a person who is not convicted because the person successfully completes the terms of deferred adjudication should have the same opportunity.

Arguments Against

* This amendment may deny to the public, press, potential employers, and others relevant information when checking the background of a person who was charged with a crime.

* Crimes punishable by deferred adjudication represent a level of crime while warranting the ability to avoid a permanent conviction, at the same time being of such nature they are never forgiven. If you have lost someone due to a Driving While Intoxicated (DWI) or theft/embezzlement crime, then you can appreciate that these crimes should not be forgotten.

PROPOSITION 10

The constitutional amendment to change the length of the unexpired term that causes the automatic resignation of certain elected county or district officeholders if they become candidates for another office.

Description

Would amend the constitution by extending the length of the unexpired term that causes the automatic resignation of certain local elected officeholders if they announce candidacy or become candidates for another office from one year to one year and 30 days.

Arguments For

* This amendment is needed to reconcile the resign-to-run provision with the new filing deadline for candidates that has been moved up due to the state’s compliance with the federal Military and Overseas Voter Empowerment Act.

Arguments Against

* Elected officials should not be distracted by or neglect their current duties because of aspirations for higher office and should resign if they choose to pursue other offices at any time during their unexpired terms. Instead of relaxing this requirement, Texans should expand the resign-to-run provision to cover all elected officials.

I hope you find this information helpful. Tuesday November 8th, take advantage of your right to vote. No matter what your personal choice is, the key is that you exercise this right paid for so dearly by our ancestors and solders today. The fact is, those who care about their cause (right or wrong; normal or crazy) will show up to vote. It is the apathetic 70 to 75% who will not get off their couch to vote, that sway an election. So, be a part of history, VOTE!