How to Prove That a Decedent Lived in a Specific Texas County

Introduction When it comes to proving that a decedent lived in a specific county in Texas, there are a few things you’ll need to do. First, you’ll need to gather any and all documentation that would show where the decedent resided at the time of their death. This could include things like a lease agreement, […]

The post How to Prove That a Decedent Lived in a Specific Texas County appeared first on Kreig LLC.

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TYLA Director Spotlight: Russell Shrauner

Editor’s Note: In this blog series, we are getting to know the members of the Texas Young Lawyers Association Board of Directors. TYLA, commonly called the “public service arm” of the State Bar of Texas, works to facilitate the administration of justice, foster respect for the law, and advance the role of the legal profession in serving the public. All TYLA programs are accomplished through the volunteer efforts of its board and committee members, with the cooperation of local affiliate young lawyers associations. Learn more at tyla.org.

Name: Russell Shrauner

Employer/Organization: The Carlson Law Firm

Practice Area(s): Personal Injury

Why did you join the TYLA board? I joined the Texas Young Lawyers Association board because I wanted to get involved in the many service and education projects the Texas Young Lawyers Association takes on. Having volunteered on a project that addressed the challenges of substance use and mental health in the legal profession, I saw firsthand how meaningful the Texas Young Lawyers Association’s projects can be.

What advice would you give to other TYLA members who are looking for ways to grow professionally? I think TYLA members looking to grow professionally should get involved in the local legal community. The meetings and events hosted by your local bar and local TYLA affiliate are great opportunities to network.

Before joining the TYLA board, what is your favorite experience with community or public service? I think my favorite experience would be in 2019 when my office at the Carlson Law Firm took the entire Children’s Home of Lubbock—a foster care community—to see Aladdin at the movie theater as one of my favorite experiences was going to a movie in the summer. That relieving jolt of cold air after being in the hot sun, chugging lemonade, tossing pieces of popcorn up for your friends to see who could catch it—there’s just something really nostalgic about it. It wasn’t until we took those kids in foster care to see a summer movie that I realized how much I took that experience for granted. Seeing them be carefree and watching them have that experience—some of them for the first time—was really special.

What was your favorite movie, TV show, musical artist, or song from high school/college? Game of Thrones.

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A Texas Fight Over Competing Leases

A Texas Fight Over Competing Leases

Let’s proceed directly to the takeaways from Fort Apache Energy, Inc. v.  Short OG III, Ltd., et al, a Southern District of Texas bankruptcy district court opinion. (Gray Reed partners Jim Ormiston, Gabe Vick and Kristen Kelly represented Short OG III)

The other guy’s operations will not extend your lease beyond the primary term.

Texas law does not allow an oil and gas lessee to rely on a cotenant’s production to extend the term of the lease. Fort Apache and Short et al owned competing leases on 112 acres in Tyler County. The Southern Star lease expired because Fort Apache did not operate on the land during the primary term and could not rely on its lack of operations to extend the lease. Fort Apache testified that it was not economically viable to drill its own well on already developed land and it had no intention to develop the lease. The fact that an operation is uneconomical is not a reason to justify a lack of production. As cotenant Fort Apache had equal rights and access to produce.  

If you sue me, I have standing to assert lease expiration

Fort Apache argued without success that Short et al lacked standing to challenge a motion for summary judgment on expiration of the Southern Star lease because they were not third-party beneficiaries or contracting parties. Their standing was derived from their defense against Fort Apache’s trespass claim.

No trespass by a cotenant

A cotenant has the right to possess land to extract minerals and only owes an accounting of the proceeds less reasonable costs in production and marketing. Short et al, as owners of a competing lease, did not trespass because they were cotenants. Fort Apache’s trespass claim failed because it did not offer evidence to show that Short et al dispossessed it from the land.

Reliance on repudiation?

A lessee who never intends to drill a well cannot rely on its lessor’s repudiation of an oil and gas lease.

Background

In this limited space I will try (sub-optimally) to do justice to the maze of facts and events behind this ruling. Let’s just say, generally speaking, the following happened:

Hranivitz, Sr. and McBride each owned half of the land and signed competing leases. People died. Their descendants and successors signed some leases and ratified others, some with authority and some without, some timely and some not. More people died, leading to a legal tug of war over who had legal title to the property and the right to dispose of it: the administrator of the estate or the testamentary trustee?

Fort Apache sued alleging seven assorted causes of action: Short et al counterclaimed.

Working interest owner (with Short et al) Aztec filed for bankruptcy. The working interest owners’ counterclaims and third-party claims are still pending in a baknruptcy adversary proceeding.

The Bankruptcy Court issued an opinion that the Southern Star lease was superior to the Miller lease and ratification of the Miller lease was void, but at the time the prevailing lease might have expired.

Conclusion, for now

Short et al’s claim for expiration of the Southern Star lease prevails. Because Fort Apache never conducted operations on the lease after trying and failing to negotiate a joint development agreement with Short et al., the lease expired. Fort Apache’s partial summary judgment motion on trespass is denied.

*

Your musical interlude.

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Independent Contractor: the Eye of the Beholder

For some 10-15 years, employers have been trying to save some money by transforming traditional employees into independent contractors.  Different entities use different tests to determine whether an employee is truly an independent contractor. I previously wrote about the various tests here. One commonly used test is that employed by the Texas Workforce Commission. The TWC test looks at:

  • Who tells the employee how to do the job: a true independent contractor determines himself how he will accomplish a given task.
  • Training: who provides the training: a true independent contractor provides his own training.
  • Integration: the services of an independent contractor are easily separated from that of the larger employer.
  • Services rendered personally: a true independent contractor can assign the task to a subordinate and need not perform the service personally.
  • Hiring, supervising: an independent contractor can hire, select, pay the workers himself.
  • Continuing relationship. The work of an independent contractor is usually of a definite time period. It does not continue in perpetuity.
  • Set hours of work: an independent contractor sets his own hours.
  • Full time required: an independent contractor need not work for the employer exclusively.
  • Location of services: an independent contractor performs the work where he chooses.
  • Order of sequence. An independent contractor is concerned only with the final product. The sequence in which the work is performed do not concern him
  • Oral or written reports: an independent contractor is usually not required to submit regular reports or updates.
  • Payment by hour, week or month: an independent contractor is generally paid by the job, not by a set time period.
  • Payment of business & travel expense: an independent contractor is normally paid for his/her business and travel expenses.
  • Tools & equipment: an independent contractor provides his own tools.
  • Significant investment: an independent contractor has a significant investment in his business. An employee has little or no investment in the business for whom the work is performed.
  • Profit or loss: an independent contractor can realize a profit or loss from one job depending on the result.
  • Working for more than one firm at a time: an independent contractor often works for more than one business at a time.
  • Making service available to the public: an independent contractor generally makes his services available to the public at large. An independent contractor may hang a shingle or advertise his services.
  • Discharge without liability: if the work satisfies the contract terms, an independent contractor cannot be fired without incurring liability for breach of contract.
  • Right to quit without liability: an independent contractor is legally responsible for job completion. If he quits, he becomes liable for breach of contract.

These are 20 factors in the TWC test. The other tests also include many different factors. But, generally, the courts look to a few factors more than most: right to hire/fire; providing one’s own tools and equipment for the work; freedom to take on other work; how integral is the work to the business; and how the employee is paid are probably the most important factors.

If the work to be performed is so integral to what the business does, the courts are less likely to see the work as a true independent contractor. For example, if a bakery hires someone to bake a certain type of pastry, that worker is likely to be viewed an an employee. But, if the same Baker hires someone to install a new electrical lamp, that work will be seen as not integral to the sort of work normally performed by that bakery.

See the TWC website here for more information.

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Is Child Support Mandatory in Texas?

Child support can be a delicate subject, to say the least. While some people get distracted by sending payments to their former spouse or co-parent, it is important to remember that child support is put in place to help ensure that both parents are providing financial support to their child. After all, both parents have a legal responsibility to provide such support to a child that is their own. While child support is often ordered in situations where parents are not married or are no longer married, you may be wondering whether or not child support is mandatory in Texas.

Is Child Support Mandatory in Texas?

Child support is not mandatory to be ordered in all cases, but a child support order is often put in place in most cases. For those parents involved in a child support case, it is critical to keep in mind the fact that all orders made by the court are done so with the best interest of the child in mind. Because of this, parents may mutually agree to not paying or receiving child support payments, but the judge may order child support anyways.

Texas has child support guidelines in place that are established by the Texas Family Code and are meant to assist the family courts in calculating how much child support is to be owed by one or both parents. While parents can agree to pay above and beyond what the court establishes as the necessary child support payments, they cannot agree to pay less. Should the parents reach an agreement on child support payment amounts and timing of payments, it must be approved by the court.

Generally speaking, the parent who spends less time with the child, the non-custodial parent, will be ordered to pay child support to the custodial parent. The paying parent is referred to as the “obligor.” The recipient of these payments is referred to as the “obligee” parent. Many factors go into considering when child support should be ordered and how much should be ordered. Need and ability to pay are two of the primary factors. A parents need for the payments to support the child and the other parent’s ability to pay will be central to the child support calculation. Other relevant factors will include the expenses of the child. The medical needs and expenses of the child will often be central to the calculation of support.

In sum, parents may agree that no child support needs to be paid and the court may approve this arrangement. If the best interest of the child dictates that child support should be paid, the court will order otherwise. Before agreeing to no child support, however, parents should consider the problems that can come from such an arrangement. Child support can be a good way to help ensure both parents are remaining financially responsible for their child.

Family Law Attorneys

Child support questions? Get the answers you need from the family law team at Navarrete & Schwartz. We are proud to serve the residence of Midland, Texas. Contact us today.

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Why You Should Always Consider Mediation Before Litigating a Divorce

Divorce is a complex process that can bring feelings of anger or sadness to everyone involved. Conflict in the divorce can mean more emotional and economic pain, for the litigants and any children involved.

Mediating a divorce is an excellent decision to help avoid an expensive legal battle and reduce that stress by providing the parties to the suit with more control over the case’s outcome.

Learn why mediation is better than divorce, then contact our Dallas divorce mediation attorneys for more information.

Divorce Mediation Overview

Divorce mediation allows separating couples to meet with a neutral third party, with or without counsel, to resolve any issues or items of contention in a divorce. Mediation is preferable to litigation because it is less upsetting and almost always less expensive. Divorce mediation also usually allows the parties to finish their case quicker than a standard divorce.

Another important benefit to mediation is that you and your partner have the ultimate say—subject to agreement and the confines of the law—over your contested issues. Outside of extreme circumstances when mediation may not be the best course of action, any agreement reached in mediation is binding on the Court. This means that you both can keep the power and control over your relationship, and the Court is not making ordering things that no one asked for.

How Mediation Works

Divorce mediation starts when you and your partner agree and select a mediator, or the Court appoints one. While divorce mediation is voluntary in most states, Texas courts have the power to order the parties to mediate their case. This is the limit to what the Court can do, as the Court cannot force parties to reach agreements.

While mediation is highly successful in resolving cases, it is most effective when both parties are willing to negotiate their contentious divorce issues. Usually, the mediator will set up an appointment in a neutral setting with the spouses (and counsel, if any). During this initial meeting, the spouses can talk about their views on common divorce topics that, include:

  • Division of assets
  • Child visitation and custody
  • Child support
  • Alimony

The first discussion helps your mediator to understand how realistic a possible resolution to the case is via mediation. As a further means of “keeping the peace” during these sessions, the mediator will generally have each side in a separate room (or Zoom room, if being done electronically).

There is no time limit on divorce mediation in Texas. Everyone can continue working with the mediator to reach an agreement until an agreement is reached, or the process becomes unworkable. If the issues are too complex or the conflict is too high for agreements to be reached, litigation is still possible. Still, mediation is almost always less expensive than a lengthy divorce fought out in the courts. Parties can save thousands of dollars—and ever-valuable time—by resolving their case through mediation.

Is Mediation An Option?

Mediation is possible if there is a chance you and your partner will agree to the terms of a divorce. Also, both sides need to be open on finances, and agreement is required on child custody matters. However, mediation is not usually advisable if there is a history of domestic violence.

Contact Our Dallas Divorce Mediation Attorneys Today

Divorce is painful, and a contentious divorce can be emotionally and financially devastating. Everyone is better off when both sides can agree to divorce terms without an extended legal quarrel. Divorce mediation is a great choice to reach these agreements, whether the issues are alimony, child custody, or division of property.

The Dallas divorce mediation attorneys at Orsinger, Nelson, Downing & Anderson can help with mediating your divorce to bring your case to an agreeable conclusion without a lengthy legal battle. Our attorneys are proud to serve the communities of Dallas, Fort Worth, Frisco, and San Antonio. Please contact our Dallas divorce mediation attorneys at (214) 273-2400.

The post Why You Should Always Consider Mediation Before Litigating a Divorce appeared first on ONDA Family Law.

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Is military disability pay a marital asset?

If you are a military veteran who has a service-connected disability, then you may be able to receive disability payments from the Department of Veterans Affairs. How VA disability can impact a divorce case in Texas is what we are going to be discussing in today’s blog post from the Law Office of Bryan Fagan. Subjects as diverse as child support calculations, spousal maintenance, and community property division may be impacted by your eligibility for VA disability payments. Understanding the relationship between these areas of your divorce is important considering that there is a small margin for error in any divorce case.

If you have a service-connected VA disability rating of at least 10% then you are entitled to VA disability payments. Your military retirement will be reduced on a dollar-by-dollar basis if your disability rating is under 50%. So, why would you want to waive VA retirement benefits to receive VA disability benefits? The two primary reasons why disability benefits may be preferable to retirement benefits are due to disability benefits not being subject to division in a divorce and disability benefits are not taxable.

How can you apply for VA disability benefits?

Just because you have a service-connected disability through the military does not mean that you will automatically receive VA disability payments. Rather, you need to follow the process that the military has laid out for veterans and active-duty service members to apply for and receive VA disability benefits. While some people in your position will apply for and receive disability benefits at the same, they that they separate from the military, there is no deadline to apply for disability. It could be years later that you first apply for disability benefits and receive them.

What this means for your divorce is that you should not assume that just because your spouse is not receiving benefits at this moment, he or she will not begin to receive them in the future. The VA will pay on any person’s claim who can prove that he or she has a service-connected disability rating of between 10 and 100%. Depending on whether you have a spouse and children you can receive a monthly disability payment from the VA of over $3,500 per month.

Backdoor division of VA disability benefits

As we have already discussed, VA disability benefits are not divisible in a divorce as community property. Once the funds are deposited into a jointly held bank account then disability payments may potentially be divided in a divorce. What we are describing here is something called “commingling” where separate property and community property are placed together. Rather, it would be wise for you to segregate your separate prop (like VA disability) into a bank account that will never have community property funds within it. This way you can be sure that the bank account in question will never have an issue with commingled funds.

How can VA disability impact decisions on child support and spousal maintenance?

The questions about child support and spousal maintenance revolve around income. VA disability benefits do count as income when it comes to calculating child support or spousal maintenance. As opposed to the community estate, disability benefits from the VA can be a part of a veteran’s income for purposes of setting child support.

For alimony or spousal maintenance purposes, Texas is an outlier among the rest of the 49 states in our union. Texas family courts will typically not consider VA disability payments as income for calculating spousal maintenance.

Can VA disability payments be garnished for child support and alimony?

Wage garnishment in Texas typically takes place via a wage withholding order. A wage withholding order is usually submitted to an obligor spouse or parent’s employer after a child custody or divorce case. In that way, the employer will know how much money to withhold to pay child support each month.

Military disability benefits cannot be treated as community property in a Texas divorce. Let’s look at a case where a husband filed an appeal from his divorce arguing that the court incorrectly divided up his military disability benefits.

In that case, the wife had filed for divorce. In her Original Petition for Divorce, this woman argued that she should receive a disproportionate share of the community estate for a variety of reasons. Her income was much less than her husband’s, she had no advanced education and she had no separate property from before the marriage. Ultimately, the divorce court awarded her more than half of her husband’s military retirement benefits. Her husband immediately appealed the decision.

The husband’s main argument was that in awarding his wife 55% of her military retirement pay, the court had included disability benefits in that equation. The wife argued that this was not the case and that the final decree of divorce awarded him his military disability and Social Security disability benefits as a part of his separate estate.

What did the final decree of divorce say, exactly?

The language as contained in their final decree of divorce stated that the wife was to be awarded fifty-five percent of the husband’s disposable military retired pay including any accrued unpaid bonuses, disability plan, or benefits. Under awards to the husband, the same language was used. A domestic relations order was drafted to divide up the military benefits and included stated that only disposable retired pay could be considered community property. Military disability pay would not count as military benefits for division in the divorce.

What did the appellate court say?

When the husband appealed the trial court orders it went to an appellate court here in Texas. The final decree of divorce contained an award for the husband of his military disability and Social Security disability benefits as separate property. The appellate court found the definition of disposable retired pay did exclude military disability pay. As a result, the appellate court found that the trial court did not make a mistake and award any of the husband’s disability benefits.

Dividing up marital property in a Texas divorce is not easy

The subject of community property division in a Texas divorce arises with a great deal of regularity. It is also complicated- more complicated than many guides on the internet will lead you to believe. One of the most difficult aspects of community property division to figure out for many couples has to do with how government benefits are divided up. It could be a teacher’s retirement or military retirement, there are methods of calculating what percentage of these benefits can be divided in the divorce that relate to your length of service as well as how many years of marriage coincided with that length of service.

Veterans’ benefits, including military benefits, are no different. Special rules apply that will determine how your military benefits will be divided in the divorce and whether they are even subject to division. We have already seen how military disability benefits are not divisible by a Texas family court. Additionally, because of the example that we shared in the earlier section of today’s blog post hopefully, you can understand just how critical it is to make sure that your final decree of divorce is worded clearly and unambiguously. The result, if you don’t, is to prolong the case and put you in a position where you spend money that otherwise would not have to.

Military benefits are done through federal law and Texas law determines how property is divided in a divorce. Your attorney will need to be able to divide up those benefits correctly and understand how state and federal law treat these subjects. It is a bad situation to find yourself in when your final decree of divorce is not correct. This will cost you time, money, and stress that otherwise would not need to be spent. Hiring an experienced family law attorney with the Law Office of Bryan Fagan is a great way to help ensure that you do not find yourself in this position moving forward.

Our attorneys and staff have been fortunate enough to be able to represent members of our military and veterans alike in their divorce cases since our office was first opened. In addition, military spouses are among the most frequently seen clients of our office. Texas is home to many military members and veterans, and we are honored whenever we have the opportunity to work with military families to help you all accomplish your goals during a difficult time. Contact us today for a free-of-charge consultation with one of the experienced family law attorneys with the Law Office of Bryan Fagan.

Military retirement benefits

Military pensions can be subject to division in your divorce. If the pension was contributed to during your marriage, then those portions of the military benefits will be divisible in the divorce. Any portion that was contributed before the marriage will count as separate property and will not be divisible. The tricky part for you and your spouse will be to determine how much of the military retirement benefits are community property and then how to divide up that community property portion of your benefits.

At the time of your divorce, the military pension becomes frozen. Once you or your spouse file for divorce the pension’s value will be what it was on the date of filing. The reason why this law is in place is that it would be possible for a military spouse to take advantage of their spouse being promoted during the divorce and then be eligible to receive more money as a result of that promotion. Cost-of-living adjustments are typically allowed during a divorce, but the pension amount stays steady where it was at the beginning of the case.

The bottom line is while a military divorce will follow the same procedures and processes as a civilian divorce, there are specific areas where a military divorce can differ from a civilian divorce, as well. The length of your marriage, while you were serving in the military, will also make a difference when calculating benefits.

If you are married to a military member, then the length of your marriage will have a tremendous impact on your ability to receive benefits. Simply put, if you and your spouse have been married for less than 10 years then you should not expect to receive much of anything in the divorce as far as military benefits. As you are probably aware, Texas is a community property state which means that debts and property accumulated during the marriage will be subject to division in the divorce.

You and your spouse need to have been married for at least 10 years to become eligible for military retirement pay. In addition, the ten years of your marriage must have overlapped with 10 years of military service to qualify. This is different from a civilian divorce where a spouse would be eligible to receive a portion of their spouse’s retirement benefits upon divorce no matter the length of the marriage.

As soon as you and your spouse have been married for ten years you would become eligible to receive a portion of your spouse’s retirement pay. Here are a few benchmarks to keep in mind as far as retirement pay is concerned. At 15 years, you would be eligible to receive half of the retirement pay and one year of health insurance after the divorce comes to an end. Once you have been married for twenty years or longer you would be eligible for half of the retirement pay, health insurance, and other benefits available through the military. The health insurance would go away once you remarried, however.

The importance of hiring an experienced family law attorney in a military divorce

You need to include the specific language that the military requires to receive the correct amount of retirement benefits. Your final decree of divorce should include whatever language the military mandates be included in these orders. Failing to include this language in the order can ruin your chances of receiving the property that you worked so hard to obtain in your divorce. You should be accurate when listing how long you or your spouse served in the military and how long your marriage was.

The government will send the orders back to you if not completed correctly. Keep in mind that this will cost you time in that the attorney will have to go back and correct their work. On top of that, the extra time and effort that it takes to correct these mistakes will cost you time and money. This is adding insult to injury and makes it very difficult to be able to budget for a divorce or plan for your life after the divorce has come to an end. Able to say accurately this is when the divorce ended and here the financial consequences of the divorce are an important part of the case for peace of mind’s sake.

No matter how long you and your spouse were married, if he or she won’t be retiring for another twenty years then you will have to wait a while to get the money promised to you in the divorce. Your spouse may become the person who must pay you the retirement pay when it does come time for those payments to be made. This sounds ok at the time of your divorce but can become cumbersome ultimately for a person in your shoes given that you have no idea what will become of your spouse after the divorce.

If your ex-spouse does not pay you the correct amount of money at retirement you will need to keep tabs on him or her and then file an enforcement lawsuit against him or her. Time is a factor that stands to harm almost every divorce at this stage. Instead of dividing up military retirement pay, why not divide up other property instead? This method can help you to get a case immediately rather than having to wait decades.

You can ask for more equity in the home, a greater amount of child support or spousal maintenance, or anything in between. There are many ways to prepare for a divorce when it comes to community property division. You should begin by going through all of your assets and debts and develop a plan on how to divide them in your divorce. You are only limited by your circumstances and creativity in this regard. Otherwise, having an experienced family law attorney can help you to problem solve and think outside the box when it comes to the division of marital property.

Questions about the material contained in today’s blog post? Contact the Law Office of Bryan Fagan

If you have any questions about the material contained in today’s blog post, please do not hesitate to contact the Law Office of Bryan Fagan. Our licensed family law attorneys offer free-of-charge consultations six days a week in person, over the phone, and via video. These consultations are a great way for you to learn more about the world of Texas family law as well as about your family’s circumstances that may be impacted by the filing of a divorce or child custody case.

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We are Forever Grateful and Moving On…

We are Forever Grateful and Moving On…

I received a text today from a lawyer I coached,. He asked how I was doing. It is a very long story, and in journalism there is a rule that I suggested for blogging: “Don’t bury the lead.” So I won’t.

I had surgery in February to remove cancer from my neck. After surgery I had chemo and radiation with all the expected side effects. By July I thought I was recovering. But, I had pain in the other side of my neck with it shooting down my right arm. I had surgery in Cabo and almost died from pneumonia afterwards. As a result we sold our home in Cabo and we are building a home in Fort Worth.

Here are the details of my story.

Many people I know have been through far greater challenges than me, and haven’t shared their stories. In that way I feel selfish sharing mine. I believe I share not to help lawyers I coached and lawyers who read my blog over 15 years. Instead, at this point I feel like I share my 2022 for those lawyers to help me by understanding my angst and just by saying hello. (I no longer use my business email as I have retired.)

After radiation and chemo I had more side effects than anticipated. I recovered from those, was cancer free, and moved to our new home at Diamanté Cabo San Lucas. In July I had severe pain in my neck. Nancy took me to a Cabo hospital where I was given pain medicine such that Nancy was afraid to put me on an airplane to return to Texas. She rightly thought I would create a ruckus and we would be on the no fly list for the rest of our lives.

A Cabo surgeon removed and replaced three discs. Before the surgery, I wrote a text that I don’t remember writing. I asked in the text why I was spending a second night in the hospital.

After surgery I got bacterial pneumonia and almost died. I was on a ventilator for five days. My first memory was our daughter Jill holding my hand. I spent 18 days on my back in the hospital, eating baby food and having more medicine and shots than I can ever remember. I lost 40 pounds. I was an extremely unpleasant patient. I cussed and made an American gesture at the doctor. I was delirious and had the most crazy thoughts you could ever imagine. I don’t even want to share them, so please just think of the worst thoughts possible. None of my thoughts were favorable towards anyone working at the hospital.

I didn’t realize what it was like for our daughter Jill,  who had come from Arlington, and especially Nancy. She had spent the entire 2022 caring for me, driving me to doctors, helping me get up in the middle of the night, and worrying about whether I would survive.

I was brought home in Cabo in an ambulance and brought in our casita in a wheel chair. I fell trying to lie down. I spent the following weeks trying to walk, reading many inspiring notes Jill had written to share her love, and sorting through what was real during my hospital visit and what was not. It was a mental struggle. Not wanting the trauma or cost of another health incident in Cabo, we sold our Casita in one day and we will be back in Arlington, Texas November 30.

 

Throughout my life, I have been inspired by words. This is especially the case when times have been tough for me, like they have been this year. When I was down I needed to hear someone essentially tell me to get up and work harder to get better. At 75, I was challenged.

Graduation speeches are purposely designed to inspire the graduates to go out and change the world. One graduation speech that inspired me was Steve Jobs graduation speech at Stanford in 2005. I have likely included the YouTube video of it in a past blog post and if you haven’t watched it, I encourage you to do so. If you don’t have time, this Forbes article gives you the highlights.

There is a second graduation speech I strongly recommend you watch. It is Admiral McRaven at a University of Texas graduation. He was the Chancellor of University of Texas before stepping down because of health issues. Read about him here. But, please take time to watch and listen to what he told graduating students. I like this YouTube version of it.

These two gentlemen inspire me to make myself better each and every day. I am walking sometimes as much as a mile. I still struggle because the surgery to replace my discs paralyzed my vocal cord on the right side, meaning it never touches the left vocal cord, meaning my voice is a mess, I sometimes can’t swallow. my mouth is dry, and I get out of breath easily. This article describes my situation. Down the road they can do something to help my situation.

Like I said we are here at Diamante until the end of November. I am able to play golf from the most forward tees. In many ways we are sad to be leaving our dream retirement home. It was wonderful for the few months we were here, but, more important than our beautiful home, we will always remember the people who work here.

There are too many incredibly nice people to name, and I would for sure miss one or more. Let me say the guys and gals who work at the front gate greet us by name and chat with us. The caddies, especially Javier who has worked with us for many years, make our golf experience unique and special. The gals who work at the comfort stations greet us and take care of us. The guys and gals who work at the Diamante restaurants take great care of us. The valets who park our car greet us, smile and take care of us. The incredible gals who work in the two pro shops have for twelve years helped us and our guests with tee times. The golf pros and assistant pros we have known over the years have embraced us, taught us, and worked us in on busy days. Each Diamante staff person we met over the twelve years called us by name and made us feel part of their family. They never expected anything back from us other than a smile of appreciation. Nancy and I will be forever grateful for their kindness.

So, we are setting out on a new adventure. We are building a home in Fort Worth. It is minutes from my many doctors, downtown Fort Worth  and The Retreat Golf Resort where we play golf. I keep saying to you that this is my last blog post, and maybe this time I may be telling the truth. I am at a point when I am not sure I have anything to say that will help you enjoy your career, but I will leave you with one thought from my experience.

I spent 74 years thinking I could conquer the world, thinking nothing could stop me. I fell along the way, I disappointed myself, but I always got up. This year 2022, I felt for the first time the world had conquered me. There has not been one normal day in 2022. I have not been in control. I have given it over to doctors, nurses and caregivers. I never once  from 1947 to 2021 thought I could get cancer. That is what happened to other people. Even after Nancy and I moved into our home in Cabo, I never one time thought I would have emergency surgery in Cabo and almost die. I share this with you simply to say the most unexpected things can happen and change your life forever.

I appreciate each and every one of you I have coached, taught or mentored and those of you who read my blog.

 

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2023 Estate and Gift Tax Update

Part 1 of a 3-part series

The IRS has announced 2023’s estate and gift tax numbers. To understand them in context, we must look at 1) the Basic Exclusion Amount, 2) the Unlimited Marital deduction, 3) how the IRS will handle taxes after 2026. These ideas are interrelated and may affect your planning options.

The Basic Exclusion Amount

The basic exclusion amount is increasing from $12.06 million in 2022 to $12.92 million in 2023, the largest adjustment the exclusion has ever received. People with a small estate, a million-dollar estate, or multi-million-dollar estate all benefit from the exclusion amount, so keep reading! The exclusion can be applied to offset tax on gifts you make during your lifetime, or on transfers you make at the time of death. When you make a gift larger than the annual exemption amount (in 2022 it is $16,000 and it will be $17,000 in 2023) the excess is subject to gift tax. To eliminate the gift tax, you can tell the IRS to apply the basic exclusion amount to the gift. Doing so consumes some of your basic exclusion amount leaving less available for use at the time of your death.

Historically, the basic exclusion amount started to increase during the GW Bush administration, was expanded under the Obama administration, and was again expanded under the Trump administration. The Trump expansion was, however, saddled with a built-in rollback set to hit in 2026. The rollback will cut the $12.92 exclusion back to about $6 million unless the law is changed before 2026. I say “about $6 million” because there is a set $5 million exclusion which is increased for inflation, so the adjusted exclusion should be about $6 million in 2026.

The Unlimited Marital Deduction

A married couple can pass an unlimited value between spouses without estate tax. It is important to understand that the Unlimited Marital deduction delays paying estate tax, it does not eliminate estate tax. Values you leave to your spouse are not taxed when you die, but they are included in your spouse’s estate and are taxed at the second death if the values exceed the basic exclusion amount.

Historically, this gave rise to a planning technique wherein the first to die would not leave all assets to the surviving spouse. This was done by creating a Bypass Trust in the Will of the first to die and leaving a value equal to the exclusion amount to that trust upon the first spouse’s death. The transfer to the trust was taxable, but the tax was zeroed by the decedent’s exclusion amount.

All value higher than the exclusion amount passed to the surviving spouse tax-free under the Unlimited Marital deduction. Then, when the second spouse eventually died the exclusion amount of the second spouse was also applied. Only the value in excess of both exclusion amounts was subject to estate tax. Both exclusions were thus used to eliminate estate tax. By contrast, if a Bypass Trust was not used then the exclusion amount of the first to die was wasted (because the value passed directly to the surviving spouse) so when the second spouse eventually died, only that second spouse’s exclusion amount was available to reduce the estate tax. Any taxable estate that used only the Unlimited Martial Deduction was wasting the first spouse’s exemption amount.

Portability Replaces Bypass Trusts

Since 2010, however, a Bypass Trust is not necessary to take advantage of both exclusion amounts. The law was changed to allow “portability” of the first exclusion. When one spouse dies, the survivor can ask the IRS to put that first exclusion on hold, then to apply both exclusions when the second spouse dies. Even without a trust, the only portion left taxable is any value that exceeds both exclusion amounts.

How has the value of your estate changed since 2010? When did you last update your legal estate planning documents? If your estate is no larger than about $6 million yet your Wills contain Bypass Trusts, then you should speak with your estate planning attorney about eliminating the burdens imposed by that now unnecessary and restrictive trust. Are you my estate planning client? Does your Will contain what we called a “federal credit trust” or a “shelter trust”? Make your appointment for a planning review asap because we can likely eliminate the burdens and costs of that restrictive trust, which was needed when the exclusion was smaller but is no longer needed now that the exclusion is larger. (Visit www.Premack.com and use the yellow button to book an appointment.)

Next Week: The 2026 Trump Rollback


Paul Premack is a Certified Elder Law Attorney for Wills and Trusts, Probate, and Elder Law issues. He is licensed to practice law in Texas and Washington. To contact us, click here.

Column published on November 14, 2022

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Student Loan Assistance in Texas: How Do I Know if PAYE Is the Right Option for Me?

Are you struggling to pay back your student loans? You’re not alone. Forty-eight million Americans have federal student loan debt totaling $1.6 trillion.

The good news is that student loan assistance options make paying back your loan more affordable. The PAYE repayment plan can drastically reduce monthly payments for eligible borrowers, and some participants can qualify for loan forgiveness after 20 years.

In this article, the second in our multi-part Student Loan Repayment blog series, debt resolution attorney and owner of Ciment Law Firm, PLLC, THE Debt Defenders, Daniel Ciment, explains how PAYE works. Call us at (833) 779-9993 to schedule a free consultation to explore your options and determine if PAYE is right for you.

What is PAYE?

Short for “pay as you earn,” PAYE is a student loan repayment plan designed to reduce the amount of your monthly payments. Instead of paying a fixed loan amount based on your loan principal and interest, PAYE limits your monthly payments to 10% of your discretionary income.

Referred to as income-driven repayment (IDR), PAYE keeps loan payments affordable, allowing borrowers to climb out from crippling student loan debt.

What You Need to Know about PAYE

Because there are several different programs available offering assistance for educational loans, the options for student loan borrowers can get overwhelming.

To avoid some of the confusion from similar programs, here’s what you need to know about PAYE:

  1. PAYE can make student loan payments more affordable. Your loan payments are capped at 10% of your discretionary income, so you don’t have to decide between eating dinner or paying your student loan.
  1. PAYE is a long-term plan. While other income-driven repayment plans provide temporary relief, such as deference or a pause on payments (referred to as forbearance), PAYE offers long-term assistance for as long as you are eligible for the program.

Further, because PAYE carries a 20-year term, you will accrue more interest than a standard plan, which has a ten to twelve-year term. As a result, your total amount paid over the life of the loan could be higher.

  1. PAYE is not a loan rehabilitation program. If you’ve defaulted on your loan and are trying to get it back on track, there are other options besides PAYE.
  2. You have to reapply each year. Because eligibility is based on your income, you must reapply each year to confirm that you are still qualified. As your income goes up or down, your payment will also be adjusted.
  3. Your spouse’s income may be included in your income calculation. If you are married and file taxes jointly, your spouse’s income could affect the amount of your discretionary income, which could spike your payment obligation.

PAYE Loan Forgiveness

Many borrowers turn to PAYE to reduce their monthly student loan payments, but another benefit can be even more compelling.

If you have made continuous payments and kept your loan in good standing, you can have any remaining balance erased at the end of 20 years. The federal government forgives the loan, and you are free from making future payments.

The debt is gone for good, whether you have remaining loan balances totaling $10k or $100k.

There is one caveat to loan forgiveness to keep in mind: the amount of the loan that’s forgiven gets added to your taxable income, so you could end up with a tax bill from Uncle Sam to offset the windfall.

For example, if the amount of student loan forgiven is $10,000 and you pay 18% in taxes, you would have to pay $1,800 back to the government when you file your taxes. Still, that’s better than being on the hook for the entire $10,000 balance!

How Discretionary Income is Calculated

Borrowers under the PAYE program can reduce their monthly payments to a mere 10% of their discretionary income, but how is “discretionary income” calculated?

Discretionary income is based on your adjusted gross income, which is essentially your taxable income after adjusting for 401k contributions, pre-tax healthcare costs, and other pre-tax expenses.

From there, you will subtract 150% of the federal poverty line for Texas from your adjusted gross income. This number changes yearly and is also based on the size of your household.

PAYE Eligibility Requirements

To be eligible for PAYE, you must meet the following requirements:

  1. Your loan must be federally backed (private loans are not eligible)
  2. You cannot be in default on your loan
  3. You have to demonstrate financial hardship (your payments exceed 10% of your discretionary income)
  4. Your loan must have been taken out after October 1, 2007
  5. You must have received a loan disbursement after October 1, 2011

The Bottom Line

If your income is limited and you’re struggling to meet your payment obligations, having your loan recalculated based on your income could give you some financial breathing room.

For further information about PAYE and other programs in Texas, contact a student loan assistance lawyer at Ciment Law Firm, PLLC, THE Debt Defenders, at (833) 779-9993 today or fill out our online form.

Copyright © 2022. Ciment Law Firm PLLC, THE Debt Defenders. All rights reserved.

The information in this blog post (“post”) is provided for general informational purposes only and may not reflect the current law in your jurisdiction. No information in this post should be construed as legal advice from the individual author or the law firm, nor is it intended to be a substitute for legal counsel on any subject matter. No reader of this post should act or refrain from acting based on any information included in or accessible through this post without seeking the appropriate legal or other professional advice on the particular facts and circumstances at issue from a lawyer licensed in the recipient’s state, country, or other appropriate licensing jurisdiction.

Ciment Law Firm, PLLC, THE Debt Defenders
221 Bella Katy Dr
Katy, TX 77494
(833) 779-9993
www.cimentlawfirm.com/

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