THL NovDec_2013

Top Ten Perils for Probate Executors and Administrators What Happens After Death?

Protecting Immigrant Children from Deportation Estate Planning and Elder Law Issues after Windsor Rethinking Traditional Estate Planning: The New Portability Calculus

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THE HOUSTON

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Volume 51 – Number 3

November/December 2013

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contents Volume 51 Number 3

November/December 2013

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Top Ten Perils for Probate Executors and Administrators

16

FEATURES Ten Perils for Probate 10 Top Executors and Administrators

By Gus G. Tamborello

Happens After Death?

16 What

By Melissa J. Willms Immigrant Children 20 Protecting from Deportation: The Role of

Texas Probate Courts in Determining Special Immigration Juvenile Status

By John A. Nechman

24

30

Planning and Elder Law 24 Estate Issues after Windsor

By Jerry W. Simoneaux, Jr.

Traditional 30 Rethinking Estate Planning: The New Portability Calculus

The Houston Lawyer

By Jeff McClean and Robert Tartleton

The Houston Lawyer (ISSN 0439-660X, U.S.P.S 008-175) is published bimonTHLy by The Houston Bar Association, 1300 First City Tower, 1001 Fannin St., Houston, TX 77002-6715.

Periodical postage paid at Houston, Texas. Subscription rate: $12 for members. $25.00 non-members. POSTMASTER: Send address changes to: The Houston Lawyer, 1300 First City Tower, 1001 Fannin, Houston, TX 77002. Telephone: 713-759-1133. All editorial inquiries should be addressed to The Houston Lawyer at the above address. All advertising inquiries should be addressed to: Quantum/SUR, 12818 Willow Centre Dr., Ste. B, Houston, TX 77066, 281-955-2449 ext 16, www.thehoustonlawyer.com, e-mail: leo@quantumsur.com Views expressed in The Houston Lawyer are those of the authors and do not necessarily reflect the views of the editors or the Houston Bar Association. Publishing of an advertisement does not imply endorsement of any product or service offered. ŠThe Houston Bar Association, 2013. All rights reserved.

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contents Volume 51 Number 3

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36

departments Message 6 President’s Bragging Rights

By David A. Chaumette the Editor 8 From 50 Years of The Houston Lawyer

By Robert Painter Lawyers Who Made a Difference 34 Houston Roy Hofheinz

By The Hon. Mark Davidson Profile in Professionalism 36 ASarah Patel Pacheco

37

38

Crain, Caton & James, P.C.

SPOTLIGHT 37 COMMITTEE Task Force Provides Help

with Consumer Issues

By Jeffrey L. Oldham

Record 38 OffThetheHerbert Gee Gavel Dragons

Honor Late Judge

By The Hon. Josefina Rendón Trends 40 Legal Texas Supreme Court Finds Insurer

Liable for All Remediation Costs

By Suzanne Chauvin

The Texas Supreme Court Further Expands Appellate Review of New Trial Orders

By Polly Graham Reviews 42 Media The Lawyer’s Guide to

Social Networking

Reviewed by Al Harrison

Android Apps in One Hour for Lawyers

The Houston Lawyer

Cover: The Houston Lawyer Celebrates 50 Years – Harold Lloyd, center, was the publication’s second editor in chief, serving from 1964-1966. He holds the first issue of The Houston Lawyer, at right, published in November 1963. Showing issues from five decades are current editors Jill Yaziji, Legal Trends; Farrah Martinez, Media Reviews; Don Rogers, Articles; Angela Dixon, Off the Record; and Robert Painter, Editor in Chief. Committee Spotlight editor Julie Barry was unable to join the photo, but there in spirit.

Photo by Anthony Rathbun Photography.

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November/December 2013

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Reviewed by Suzanne Chauvin

44 Litigation MarketPlace

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president’s message

By David A. Chaumette Chaumette, PLLC

Bragging Rights

I

am writing this message in the afterglow of another successful Harvest Celebration. Once again, you the members of the Bar have stepped up and donated so that those less fortunate in Houston and the surrounding areas can receive the legal help they need. I want to thank you on their behalf.

While I am proud of the $619,500 we raised, it is but one component of the HBA’s effort in this area. You may not hear that much about this every day, so please let me brag for a moment. Allow me this because, in the end, I am bragging about you.

The Houston Lawyer

I’m proud of our impact. Last year, our members and staff donated over 18,000 hours to Houston Volunteer Lawyers, which translates to providing free legal advice to over 4,200 people and accepting nearly 1,300 cases for extended pro bono representation – a whopping 98 percent of the cases that HVL accepted with the hopes of placing. The matters you handled through Houston Volunteer Lawyers ranged from estate planning, guardianships and family law, to landlord/tenant, income tax, special education, and bankruptcy. The unifying theme of our representations is the impact that we have had on people’s lives. I must admit that over the years, I have had clients who didn’t always appreciate what I had done for them, but that has never been the case for any of my HVL clients.

There’s a lot of professional satisfaction for me in those representations because I know that I have made a difference in their lives.

I’m proud of our work with veterans. But really that is only the tip of the iceberg. An important component of our work has been with veterans. During my presidency, I have met with officials from the Veterans Administration about our work in this area. Universally, those officials praised our work and thanked us for helping those who have served. Every Friday, we staff a clinic at the DeBakey VA Medical Center where we see about 35 veterans each week. The lawyers who staff those clinics come from all sizes of firms and all practice areas, and I appreciate every minute they spend on this project.

Over the last few years, we have done more veterans work in conjunction with several other bar associations all across Texas.

From Waco to Galveston, the HBA has co-sponsored clinics in VFW halls and similar places, again meeting people where they live and helping those in need. Through these efforts, we have lev6

November/December 2013

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eraged our resources and engaged others in our mission. In an age when there are so many demands on our time, those partnerships and the related efficiencies are an integral part of our success (and our commitment to our members and our community).

I’m proud of our partners. The work with our veterans is not our only significant partnership. In November, we celebrated the first anniversary of our Medical/Legal partnership with Texas Children’s Hospital. Through this partnership, we keep a lawyer on site at the hospital to answer questions and provide limited legal advice to patients and their families. One year in, this program is already a resounding success. Our work there allows us to tap into our special skills as problem solvers to address issues that cause tremendous stress to families in a short period of time. In this way, we can help families keep their kids safe. I’m glad to say that I think this program will be around for a while, and that’s just one example. We also have significant partnerships with the Houston Area Women’s Center, the Food Bank, and many others.

I’m proud of our enthusiasm. As you may remember, one of our focuses this year at the HBA is on immigration education and the dissemination of information about individual’s rights in the immigration process. To that end, I have met with several different groups across Houston to discuss these issues. After one of those meetings, we mentioned an upcoming Neighborhood Centers’ immigration clinic in our weekly e-bulletins and, from that single mention, NCI reported that they had twice as many attorneys volunteer at that clinic. That one example illustrates the reach of the HBA and how our little steps can make a difference. My hope is that we continue that impact and continue to stoke the fire of our volunteerism.

In this holiday season, we have a lot to be thankful for. I hope that you share my pride in all of the great things we do in service to others. In the coming year, I ask that you take time to join us and increase your involvement in our programs, even if you can only spare a couple of hours. The HBA is built for you to maximize your impact on those in need, for those who need you most. Our website (www.hba.org) and the HVL website (www.makejustice happen.org) contain many opportunities and are worth your time.

Thank you for all that you do, and enjoy the season.

Defending Texans Since 1994 Former Assistant United States Attorney Former Assistant District Attorney Founding Member of the National College of DUI Defense of Counsel Williams Kherkher LLP Law Office of Ned Barnett

Gulf Freeway Office: 8441 Gulf Freeway, Suite 600 • Houston, Texas 77017

713-222-6767 • www.nedbarnettlaw.com Board Certified in Criminal Law by the Texas Board of Legal Specialization thehoustonlawyer.com

November/December 2013

7

from the editor

By Robert Painter Painter Law Firm PLLC

Associate Editors

Julie Barry Attorney at Law

Angela L. Dixon Attorney at Law

Farrah Martinez Harris County District Clerk’s Office

The Houston Lawyer

Don Rogers Harris County District Attorney’s Office

Jill Yaziji Yaziji Law Firm

8

50 Years of

The Houston Lawyer

“I

treasure the experience as a great part of starting my practice,” attorney Harold Lloyd told me, describing what it meant to him to be one of the founders of The Houston Lawyer, as a second-year attorney. He went on to become the second editor in chief, from 1964-1966, and is our earliest living editor.

This issue marks the 50th anniversary of the Houston Bar Association’s flagship publication. When I finished a very pleasant conversation with Mr. Lloyd, I was struck by how much things have changed in the past 50 years.

Every Friday back in 1963, court personnel orally called the civil docket in one of the large courtrooms.

Attorneys who had a case on the docket were there in person. The courtroom could get crowded. It did not take long to know all of the lawyers because you would see them frequently in court.

After docket call, many attorneys went to a nearby café and settled their cases, over butter-topped rolls, fresh out of the oven. At lunch and after work, lots of lawyers socialized in the Rice Hotel’s restaurant or bar.

Over the years the Houston bar has enjoyed a dramatic growth and, in many ways, has become less connected and personal.

But some things have not changed in the past 50 years. Service on a Houston Bar Association committee, like this magazine’s editorial board, is still a great way of enhancing one’s practice and having a taste of the bar’s collegiality that some think was only in a bygone era.

We salute Harold Lloyd and the other visionary bar leaders who did the heavy lifting to start this magazine, which has survived and thrived throughout all of these decades. A list of our former editors is included with this column.

In this edition of The Houston Lawyer, we focus on probate issues. Mark Twain famously said that, “The only two certainties in life are death and taxes.” Probate is an area of the law that will impact each of us personally, as well as our clients. Jerry W. Simoneaux,

November/December 2013

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Jr.’s article addresses estate law issues after the Windsor decision. Jeff McClean and Robert Tartleton tackle new portability issues in estate planning. Gus Tamborello shared the top 10 perils for probate executors and administrators. And John Nechman’s article discusses the role of Texas courts in protecting immigrant children from deportation.

EDITORS OF THE HOUSTON LAWYER

1963-1964 * Quinnan H. Hodges 1964-1965 Harold Lloyd 1965-1966 Harold Lloyd/Joseph Jaworski 1966-1967 * George L. Robertson / *Melvin W. Parse, Jr. 1967-1968 * Melvin W. Parse, Jr. 1968-1974 * John Teed 1974-1975 Jim M. Perdue 1975-1978 * Ralph S. Carrigan 1978-1980 The Hon. Mary Bacon 1980-1981 Otway B. Denny, Jr. 1981-1982 Dan S. Boyd 1982-1983 Chris C. Pappas/John B. Lay 1983-1984 John B. Lay 1984-1985 Chris C. Pappas 1985-1986 Hartley H. Hampton 1986-1987 The Hon. Sim Lake 1987-1988 W. Scott Carpenter 1988-1990 Joel M. Androphy 1990-1991 Lynne Liberato 1991-1992 Warren W. Harris 1992-1993 Patrick L. Hughes 1993-1994 Steven I. Soffer 1994-1995 Amy Karff Halevy 1995-1996 Elizabeth Black Berry 1996-1997 Susan S. Septimus 1997-1998 David J. Levy 1998-1999 Todd J. Zucker 1999-2000 Ruth B. Downes 2000-2001 Tim T. McInturf 2001-2002 Lionel M. Schooler 2002-2003 Ruth E. Piller 2003-2004 Ryan J. Maierson 2004-2005 Patrice Pujol 2005-2006 Brad A. Allen 2006-2007 Michelle Hoogendam-Cash 2007-2008 David V. Wilson II 2008-2009 * Fred A. Simpson 2009-2010 Ann D. Zeigler 2010-2011 John S. Gray 2011-2012 Tamara Stiner Toomer 2012-2013 Keri D. Brown *Deceased 2013-2014 Robert W. Painter

BOARD OF DIRECTORS President

Secretary

David A. Chaumette

Neil D. Kelly

President-Elect

Treasurer

M. Carter Crow

Laura Gibson

First Vice President

Past President

Todd M. Frankfort

Brent Benoit

Second Vice President

Benny Agosto, Jr.

DIRECTORS (2012-2014)

Alistair B. Dawson Brent C. Perry

Warren W. Harris John Spiller

Hon. David O. Fraga Bill Kroger

DIRECTORS (2013-2015) Jennifer A. Hasley Daniella D. Landers

editorial staff Editor in Chief

Robert Painter Associate Editors

Julie Barry Farrah Martinez Jill Yaziji

Angela Dixon Don Rogers Editorial Board

Keri Brown Stacey Burke Suzanne Chauvin Alan Curry Britt Davis Eric Davis Jonathan C.C. Day Todd Dupont Sammy Ford Kelly Fritsch Jason Goff Polly Graham John Gray Amy Hargis Al Harrison Preston Hutson Tammy Manning Chance McMillan Judy Ney Anjali Nigam Angie Olalde Jeff Oldham Taunya Painter Bridget Purdie Aaron Reimer Hon. Josefina Rendon Timothy Riley James Stafford Hon. Jeff Work

Managing Editor

Tara Shockley

HBA office staff Membership and Technology Services Director

Executive Director

Kay Sim

Administrative/ Financial Assistant

Ron Riojas

Ashley G. Steininger Project Coordinators

Membership Assistant

Ariana Ochoa

Rocio Rubio Bonnie Simmons

Continuing Legal EducationAssistant

Receptionist/ Resource Secretary

Director of Education

Lucia Valdez

Lucy Fisher Cain

Communications Director

Communications/ Web Designer

Tara Shockley

Amelia Burt

Brooke Benefield

Advertising sales Design & production QUANTUM/SUR

12818 Willow Centre, Ste. B, Houston, TX 77066 281.955.2449 • www.quantumsur.com Publisher

Leonel E. Mejía Production Manager

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Mary Chavoustie

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November/December 2013

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By Gus G. Tamborello

Top Ten Perils for Probate Executors and Administrators

A

n executor or administrator of an estate assumes all duties of a fiduciary as a matter of law.1 An independent executor has the same responsibilities and duties as does an administrator acting under the direction of the probate court.2 The fiduciary duties of a personal representative of an estate are the same as the fiduciary duties of a trustee.3 A fiduciary has a duty to protect the beneficiaries’ interests by dealing in good faith and with integrity.4 Therefore, a representative must be aware of the many pitfalls associated with serving in that capacity.

1. Failing to prepare or file an inventory and list of claims A representative must prepare and file an inventory and list of claims within 90 days after the representative qualifies, unless the time period is extended by the court.5 If there are no unpaid debts, except for secured debts, taxes and administration expenses, at the time the inventory is due, a representative may file an affidavit in lieu of the inventory but must nonetheless provide a complete inventory to the beneficiaries.6 The inventory must list all of the property that has come to the representative’s “knowledge or possession,” and shall include all real property in the State of Texas and all personal property of the estate wherever situated.7 The list of claims must include a list of all claims due and owing to, not by, the estate.8 The inventory must be verified by the personal representative as a true and complete statement of the property and claims of the estate that have come to his or her knowledge.9 One purpose of an inventory is to provide notice to beneficiaries and creditors of the estate of what the representative claims to be the estate assets and claims.

A holder of a secured claim may want to know if there are sufficient liquid assets to pay his claim so that he will know whether to elect to have his claim treated

as a matured secured claim or as preferred debt and lien.10 Likewise, a holder of an unsecured claim may want to know if the estate has sufficient assets with which to pay his claim in light of the fact that his claim is the last in priority to be paid.11 The beneficiaries want to know what assets the executor claims are in the estate.

A representative who fails to file an inventory may be removed.12 In 2013, the Texas Legislature added a provision taking effect on January 1, 2014, which will also allow the court to fine the representative up to $1,000 for failure to timely file the inventory or an affidavit in lieu of it.13 2. Failing to prepare or file a correct inventory or properly value estate assets In addition to listing assets and claims belonging to the estate, the inventory must include an appraisement of the fair market value of each asset or claim as of the date of death of the decedent, and state whether the property was the separate or community property of the decedent.14 The court may appoint appraisers to assist the representative with the determination of fair market value.15 Any interested person may attack the inventory by showing that property contained in it does not belong to the estate, or that property belonging to the estate has not been included in it.16 Any interested person may also challenge the inventory if it is believed to be unjust or erroneous.17 A representative should carefully examine the decedent’s papers and records to determine the nature and extent of the assets, and, if necessary, obtain an appraiser to assess the fair market value of the property. An appraisal is especially prudent if it appears the estate is going to be a taxable estate that must file an estate tax return. Valuation is also important because assets receive a change in tax basis upon death.18 A common point of contention is the representative’s characterization of property as separate or community, particularly when the decedent has a surviving spouse and children from a prior marriage. The executor spouse may charac-

terize an asset as community property when the children believe it was their parent’s separate property. Likewise, the executor child may characterize an asset as separate property when the spouse believes it is community property.19 If there is a challenge to the inventory on the basis of such a characterization, and if it is not cost-prohibitive, the representative may have to employ a forensic accountant to trace the origin of the property.

3. Prematurely distributing estate assets Many beneficiaries mistakenly believe they are immediately entitled to their share of the estate upon the decedent’s death. Although title “vests” in the beneficiaries or heirs upon the decedent’s death, inheritance is subject to the estate’s administration.20 The representative has the right and duty to take possession of the estate’s assets before they are distributed to the heirs,21 and must address the decedent’s debts and claims before making any distribution of the assets. Often, the heirs will converge upon the decedent’s house shortly after the decedent’s death and begin “dividing” the decedent’s property, but the representative should avoid the temptation to appease the beneficiaries and keep possession of the property until the overall condition of the estate is better understood.

The representative must move cautiously before distributing the property. If there is a will, one or more of the beneficiaries may file a contest contending the will is invalid, and may offer for probate a previous will that leaves the property in a different manner than the “last” will. If the decedent dies without a will, the heirship proceeding may not be straightforward, and could present issues concerning common-law spouses and persons claiming to be a child of the decedent. The representative should keep in mind that a beneficiary cannot compel a distribution of estate assets until two years from the date the representative was appointed.22 4. Mishandling the decedent’s debts Most people die with some debt. There

may be both secured creditors, such as mortgage companies, and unsecured creditors, such as credit card companies.

A representative is required to give certain notices to creditors. Within one month of being appointed, a representative must publish in a newspaper a general notice to creditors.23 Within two months after appointment, the representative must send actual notice to any secured creditor by certified mail.24 If the representative fails to give the required notices, the representative and the surety on the representative’s bond shall be liable for any damage for failure to give the required notice, unless it appears that the individual otherwise had notice.25 Many representatives believe that all debts must be paid, and some begin paying the decedent’s bills right away. This is usually a bad decision because Texas law also allows for “permissive notice” to unsecured creditors.26 The representative may send unsecured creditors a notice by certified mail notifying them that they must present their claims in a certain manner before the 121st day after the date of the receipt of the notice, and their failure to do so will result in their claims being barred, even when the general statute of limitations would not bar them.27 The permissive notice process is a powerful tool for avoiding payment of some unsecured claims that is often overlooked by representatives. Keep in mind that the representative owes a fiduciary duty to the beneficiaries of the estate,28 and holds the property in trust for the benefit of the title holders, rather than the creditors.29 5. Failing to acknowledge the rights of the surviving spouse or dependent children The most common conflict in estates is between the decedent’s surviving spouse and the decedent’s children from a prior marriage. Often, those children will attempt to force the decedent’s surviving spouse out of their parent’s house. Nevertheless, the decedent’s surviving spouse and minor children have a homestead right in the house regardless of the char-

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acterization of the property,30 and the representative is required to set apart the homestead for the surviving spouse’s benefit.31 Furthermore, the homestead passes free of claims against the decedent’s estate, except as provided by statute.32 If the decedent died without a will and the homestead was the decedent’s separate property, the surviving spouse is entitled to a life estate in one-third of the property.33 Therefore, although the children of the decedent may own the underlying interest in the property, their interest is subject to the surviving spouse’s life estate.

Although similar to a homestead right, the life estate is a separate legal interest that has a monetary value based upon the value of the property and the life expectancy of the surviving spouse.

6. Failing to give beneficiaries proper notice and failing to keep them informed No later than the 60th day after the date of an order admitting a will to probate, the representative shall give notice to each beneficiary by certified mail that the will was probated and provide a copy of the will or a summary of the gifts to the beneficiary.34 Failure to provide the notice can subject the representative to removal.35 Further, the fiduciary duties owed to the beneficiaries include disclosure of all material facts known to the representative that might affect the beneficiaries’ rights.36 This fiduciary relationship requires the representative to disclose fully and fairly to the beneficiaries matters pertinent to the estate.37 If challenged, the representative has the ultimate burden of showing that he or she acted fairly and informed the beneficiaries of all material facts.38 After 15 months have passed from the issuance of letters, the beneficiaries may make a demand for a formal accounting by the independent executor.39 If demand is made, the independent executor must provide a signed and sworn written statement of account within 60 days or his or her compliance can be compelled by the court.40 Moreover, failure to file a required accounting may be a ground for removal.41 A dependent administrator is 12

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required to file annual accountings and a final accounting without demand by the beneficiaries.42 7. Failing to collect or protect estate property The representative shall take care of estate property just as a prudent person would treat his or her own property.43 The representative must maintain any real property in good repair, unless directed not to do so by court order.44 The representative shall take possession of the personal property and records of the estate.45 The executor should sell any property that is liable to perish, waste or deteriorate in value, or that will be a disadvantage to the estate if kept.46 A representative must be diligent in collecting all claims and debts due the estate, and recovering property belonging to the estate, provided that there is a reasonable prospect of collecting such claims or of recovering such property.47 If a representative willfully neglects to use such diligence, the representative and the surety on the bond may be liable for the value of the property that has been lost by the representative’s neglect.48 A representative may be removed if proven to have been guilty of gross misconduct or mismanagement in the performance of his or her duties.49 A representative may also be subject to a suit for breach of fiduciary duty.

8. Commingling estate funds with personal funds A representative is prohibited from commingling estate funds with any personal funds or any other non-estate assets.50 Although an estate in Texas is not a legal entity, it is considered to be a separate taxpayer by the Internal Revenue Service (IRS). Therefore, the representative should obtain a tax identification number (Form SS-4) for the estate. The representative must then place the funds in an estate bank account. If the executor was a joint account holder with the decedent prior to the decedent’s death, the proceeds of the account belong to the estate unless

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the account was set up as joint with right of survivorship or payable on death.51 Therefore, the joint account holder/executor should close the decedent’s account and transfer it to an account under the estate’s tax identification number.

A representative can be removed for misapplying estate property.52 A representative may also be subject to a suit for breach of fiduciary duty for commingling funds.

9. Failing to pay taxes or file tax returns The representative must file a final income tax return (Form 1040) on behalf of the decedent for the year of death and any returns not filed for preceding years.53 Furthermore, because an estate is a separate taxable entity, the representative must file an estate income tax return (Form 1041) if the income exceeds $600.54 Any accounting of a dependent administrator must contain verification that tax returns due during the accounting period have been filed and that all taxes due and owing have been paid.55 If the decedent’s gross estate (which includes probate and non-probate assets) exceeds the amount of the applicable exclusion amount on the date of the decedent’s death, the representative must file an estate tax return (Form 706) within nine months after that date, unless the time period is extended.56 A willful failure to file the estate tax return or to pay the tax constitutes a misdemeanor and subjects the representative to a fine.57 Further, the IRS will impose a penalty for failure to timely file the return or pay the tax.58 A claim of the United States Government must be paid before the decedent’s other debts are paid.59 A personal representative who does not give priority to the claims of the United States can be held personally liable.60 10. Receiving compensation when none is allowed or receiving too much Most wills have a provision addressing executor compensation. The executor is bound by the compensation provision in the will.61 If there is no will, or if the will

does not address compensation, the representative’s compensation is governed by statute.62 The statute provides the representative shall be entitled to receive a commission of five per cent cash received and five per cent on sums paid out in cash on a finding that the representative has taken care of and managed the estate in compliance with the Texas Probate Code.63 The court may modify the compensation amount if the statutory formula results in an amount which is “unreasonably low.”64 The court may deny a representative’s commission if the representative has not taken care of the property prudently or has been removed.65 Conclusion There is an aphorism which states, “no good deed goes unpunished.” The job of a personal representative is fraught with many potential hazards. Therefore, the representative should take his or her job seriously and make every effort to fulfill his or her duties and treat the estate with utmost care.

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Gus G. Tamborello specializes in probate law and is a frequent author and speaker on subjects relating to estates, trusts, and guardianships. He also serves as a mediator in probate cases and has taught as an adjunct professor at the University of Houston Law Center.

Endnotes

1. Punts v. Wilson, 137 S.W.3d 889, 892 (Tex. App.— Texarkana 2004, no pet.).

2. Walling v. Hubbard, 389 S.W.2d 581, 590 (Tex. Civ. App.—Houston 1965, writ dism’d w.o.j.).

3. In re Roy, 249 S.W.3d 592, 596 (Tex. App.—Waco 2008, pet. denied) (citing Humane Society, Etc. v. Austin Nat’l Bank, 531 S.W.2d 574, 577 (Tex. 1975)).

4. Id. 5. TEX. PROB. CODE ANN. § 250(a) (West 2013) [TEX. ESTATES CODE § 309.051(a)].

6. TEX. PROB. CODE ANN. § 250(c) (West 2013) [TEX. ESTATES CODE § 309.056(b)].

7. TEX. PROB. CODE ANN. § 250(a) (West 2013) [TEX. ESTATES CODE § 309.051(a)].

8. TEX. PROB. CODE ANN. § 251 (West 2013) [TEX. ESTATES CODE § 309.052].

9. TEX. PROB. CODE ANN. § 252 (West 2013) [TEX. ESTATES CODE § 309.053].

10. TEX. PROB. CODE ANN. § 146(b) (West 2013) [TEX. ESTATES CODE § 403.052]; TEX. PROB. CODE ANN. § 306(a) (West 2013) [TEX. ESTATES CODE § 355.151(a)].

11. TEX. PROB. CODE ANN. § 322 (West 2013) [TEX. ESTATES CODE § 355.102] (unsecured claims are Class 8 claims).

12. TEX. PROB. CODE ANN. § 149C(a)(1) (West 2013)

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[TEX. ESTATES CODE § 404.0035].

13. TEX. ESTATES CODE § 309.057.

14. TEX. PROB. CODE ANN. § 250(b) (West 2013) [TEX. ESTATES CODE § 309.051(a)(2), (b)].

15. TEX. PROB. CODE ANN. § 250(a) (West 2013) [TEX. ESTATES CODE § 309.051(b)(2)].

16. Moore v. Wooten, 280 S.W. 742, 746 (Tex. Comm’n App. 1926); TEX. PROB. CODE ANN. §257 (West 2013) [TEX. ESTATES CODE § 309.102].

17. TEX. PROB. CODE ANN. § 258 (West 2013) [Tex. Estates Code § 309.103].

18. 26 U.S.C. § 1014.

19. Property possessed by either spouse on dissolution of the marriage is presumed to be community property.

TEX. FAM. CODE ANN. § 3.003(a) (West 2013). The presumption can be overcome only by clear and convincing evidence. TEX. FAM. CODE ANN. § 3.003(b) (West 2013).

20. TEX. PROB. CODE ANN. § 37 (West 2013) [TEX. ESTATES CODE §§ 101.001-101.003].

21. TEX. PROB. CODE ANN. § 232 (West 2013) [TEX. ESTATES CODE § 351.102 (the representative shall immediately take possession of the estate property)].

22. TEX. PROB. CODE ANN. § 149B (West 2013) [TEX. ESTATES CODE § 405.001].

23. TEX. PROB. CODE ANN. § 294(a) (West 2013) [TEX. ESTATES CODE § 308.051]; TEX. PROB. CODE ANN. § 146(a)(1) (West 2013) [TEX. ESTATES CODE § 403.051(a)(1)].

24. TEX. PROB. CODE ANN. § 295(a) (West 2013) [TEX. ESTATES CODE § 308.053]; TEX. PROB. CODE ANN. § 146(a)(1) (West 2013) [TEX. ESTATES CODE § 403.051(a)(1)].

25. TEX. PROB. CODE ANN. § 297 (West 2013) [TEX. ESTATES CODE § 308.056].

26. TEX. PROB. CODE ANN. § 294(d) (West 2013) [TEX. ESTATES CODE § 308.054(b)(1)]; TEX. PROB. CODE ANN. §146(a)(2) (West 2013) [TEX. ESTATES CODE § 403.051(a)(2)].

27. TEX. PROB. CODE ANN. § 146(b-4) (West 2013) [TEX. ESTATES CODE §§ 403.051, 403.056].

28. Mohseni v. Hartman, 363 S.W.3d 652, 657 (Tex. App.— Houston [1st Dist.] 2011, no pet.).

29. Id. at 658.

30. TEX. PROB. CODE ANN. § 271 (West 2013) [TEX. ESTATES CODE § 353.051].

31. TEX. PROB. CODE ANN. § 272 (West 2013) [TEX. ESTATES CODE § 353.052].

32. TEX. PROB. CODE ANN. § 270 (West 2013) [TEX. ESTATES CODE § 102.004].

33. TEX. PROB. CODE ANN. §38(b) (West 2013) [TEX. ESTATES CODE § 201.002].

34. TEX. PROB. CODE ANN. §128A (West 2013) [TEX. ESTATES CODE §§ 301.001-308.004].

35. TEX. PROB. CODE ANN. §149C(a)(4) (West 2013) [TEX. ESTATES CODE § 404.0035]; TEX. PROB. CODE ANN. §222(b)(7) (West 2013) [TEX. ESTATES CODE § 361.052].

36. Montgomery v. Kennedy, 669 S.W.2d 309, 313 (Tex. 1984).

37. In re Roy, 249 S.W.3d 592, 597 (Tex. App.—Waco, 2008, pet. denied).

38. See Lesikar v. Rappeport, 33 S.W.3d 282, 298 (Tex. App.—Texarkana 2000, no pet.).

39. TEX. PROB. CODE ANN. § 149A (West 2013) [TEX. ESTATES CODE § 404.001].

40. Id. 41. TEX. PROB. CODE ANN. § 149C(a)(3) (West 2013) [TEX. ESTATES CODE § 404.0035(b)].

42. TEX. PROB. CODE ANN. § 399 (West 2013) [TEX. ESTATES CODE §§ 359.001-359.005]; TEX. PROB. CODE ANN. § 405 (West 2013) [TEX. ESTATES CODE §§ 362.003-362.004].

43. TEX. PROB. CODE ANN. §230 (West 2013) [TEX. ESTATES CODE § 351.101].

44. Id.

45. TEX. PROB. CODE ANN. § 232 (West 2013) [TEX. ESTATES CODE § 351.102].

46. TEX. PROB. CODE ANN. § 333(a) (West 2013) [TEX. ESTATES CODE § 356.051].

47. TEX. PROB. CODE ANN. § 233(a) (West 2013) [TEX. ESTATES CODE § 351.151].

48. Id. 49. TEX. PROB. CODE ANN. § 222(b)(4) (West 2013) [TEX. ESTATES CODE § 361.052(4)]; TEX. PROB. CODE ANN. §149C(a)(5) (West 2013) [TEX. ESTATES CODE § 404.0035(b)(3)].

50. See Punts, 137 S.W.3d at 892.

51. TEX. PROB. CODE ANN. § 438B(c) (West 2013) [TEX. ESTATES CODE § 113.1541].

52. TEX. PROB. CODE ANN. § 222(b)(1) (West 2013) [TEX. ESTATES CODE § 361.052(1)]; TEX. PROB. CODE ANN. §149C(a)(2) (West 2013) [TEX. ESTATES CODE § 404.001(2)].

53. I.R.C. § 6012(b)(1).

54. I.R.C. § 6012(a).

55. TEX. PROB. CODE ANN. § 399 (West 2013) [TEX. ESTATES CODE §§ 359.001-359.005]; TEX. PROB. CODE ANN. § 405 (West 2013) [TEX. ESTATES CODE §§ 362.003-362.004].

56. I.R.C. § 6018(a)(1), (a)(2), & (b).

57. I.R.C. § 7203.

58. I.R.C. § 6651(a)(1).

59. I.R.C. § 3713(a).

60. I.R.C. § 3713(b).

61. Stanley v. Henderson, 139 Tex. 160, 164, 162 S.W.2d 95, 97 (Tex. Comm’n App. 1942); Allen v. Berrey, 645 S.W.2d 550, 553 (Tex. App.—San Antonio 1982, writ ref’d n.r.e.).

62. TEX. PROB. CODE ANN.. § 241 (West 2013) [TEX. ESTATES CODE §§ 352.002-352.004].

63. Id. 64. Id. 65. Id.

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By Melissa J. Willms

What Happens After Death?

A

will or revocable trust may dictate what will happen with a client’s assets at death, but Texas law provides various other ways that estate planners can help clients prepare for death.

DOCUMENTS ANCILLARY TO THE WILL The Texas Advance Directives Act includes the ability to prepare a Directive to Physicians (or “living will”), a Medical Power of Attorney, and an Out-of-Hospital Do Not Resuscitate order (“OOH

DNR”).1 The Medical Power of Attorney is the only one of the three that must be in writing.2 However, if a Directive to Physicians is in writing, it must be in the form established by the Texas Department of State Health Services.3 In addition, whether written or oral, an OOH DNR must be made in the presence of the client’s attending physician.4 BODY AND ORGAN DONATION In addition to planning for the disposition of their assets, clients can also plan for the disposition of their bodies. For example, a client may want to donate his or her body or parts of it. Chapter 691 of the Texas Health & Safety Code deals with wholebody donations. Body donations under Chapter 691 and the member organizations that may receive a body are overseen by the Anatomical Board of the State of Texas. Donations are used to “further medical science,” and each member organization, which includes medical schools, has a Willed Body Program, information for which is provided on each organization’s website.5 Although a donation must be in writing, no magic words are needed; however, the donee must be an adult and of sound mind when making the gift.6 Not every body is accepted by an organization, and, if a body is accepted, there is no time limit on the use of the body by the organization. A good example of the type of organization that tends to keep a body forever is a body farm. If a body goes to a body farm, the skeleton is typically kept for potential study. Each organization has criteria for donation, and may choose not to accept a body if it has been autopsied or embalmed, if organs were donated or for other reasons. Therefore, family or other loved ones should have a contingency plan in place for disposition of the body. If the body is accepted, it is immediately taken to the organization.

Although the family may want to have a memorial service, they should keep in mind that the body will not be available for a funeral. It is possible that a program may already have too many bodies, or “surplus.” In that case, the Anatomical

Board may redistribute those bodies to other programs, including those that are not member organizations or are out of state.7 Clients wishing to avoid this possibility need to be specific in the donation document as to any limitations.

In contrast, Chapter 692A of the Texas Health & Safety Code, or the Revised Uniform Anatomical Gift Act, encompasses both donations of parts of a body and the entire body, and donations are more purpose-driven than anything else. Purposes for donations under the Act are for transplantation, therapy, research, and/ or education.8 Organizations that may receive a donation include eye and tissue banks, organ procurement organizations, the Anatomical Board and others.9 There are several ways to make a gift under the Act, such as through the statewide registry at DonateLifeTexas.org or by having a symbol placed on your driver’s license. Donations under the Act are often thought of as organ donations, but clients should be aware that they can donate the entire body pursuant to the Act. If this is the desire, make sure and do so through the statewide registry or a Willed Body Program. Again, if the client has a specific intent regarding the donation, the donation document should be specific. A donation may indicate a specific donee or have only a limited purpose; however, if only a general purpose for the gift is indicated, the statute provides that the gift will be used only for transplantation and research purposes.10 CONTROLLING DISPOSITION OF REMAINS Clients may have specific desires as to what happens to their body from the standpoint of burial or cremation, the type of funeral, etc. Texas gives a client the right to say what he wants done with his body or to appoint someone who has the right to decide. An appointment is done through an Appointment of Agent to Control Disposition of Remains in a manner provided by Section 711.002 of the Texas Health & Safety Code, or instructions can be given in a Will, a funeral contract or otherwise.

If no instructions are given, certain persons are given the right to control disposition of the decedent’s body, and, if willing to do so, are obligated to inter the remains and are liable for the associated costs.11 The hierarchy is as follows: (1) anyone appointed in writing by the decedent, (2) the decedent’s surviving spouse, (3) any one of the decedent’s surviving adult children, (4) either surviving parent, (5) any one surviving adult sibling, or (6) certain defined kin who would inherit from the decedent.12 The right to control the disposition does not last forever. As of September 2011, if a person listed in the hierarchy fails to make arrangements for the disposition by the earlier of six days after being notified of the death or 10 days after the date of death, his or her right of disposition terminates.13 Note that the statute does not state that the person’s obligation for the costs terminates. If no one in the hierarchy exists, the responsibility depends on whether an inquest is held, but generally the responsibility goes to the county.14 Death can be emotional in its own right.

For clients who have specific wishes for the disposition of their remains, who are single, who have no children or who are not close to persons in the statutory hierarchy and who have someone in their life that they want to take care of these matters for them (such as a domestic partner or longtime companion), it is important to consider appointing an agent with the right to dispose of the remains and giving specific instructions to the agent. If someone has not made prior funeral arrangements, an appointment of agent or other written instructions can also be important when dealing with a funeral home. When more than one person has the equal right to dispose of the body, but not all of them join in the decision, the funeral home may require a court order showing who has the authority, which can delay a funeral or other service and cause unnecessary costs.15 STEPS AFTER DEATH When someone dies at home and is not

under a physician’s care, what do you do?

Local procedures may vary slightly as to what happens next, but the universal answer is to dial 911. Make sure and give the dispatcher specific information so that emergency professionals will know what to expect. The dispatcher will also determine whether an ambulance or law enforcement is needed. In some counties, fire department personnel may be dispatched as well. What about the situation where someone has not been heard from, access to the house is not possible, but death may have occurred? In that case, law enforcement is dispatched since they have the authority to make a forced entry.

The next important item when emergency personnel arrive is whether CPR or other life-saving measures should begin. In reality, unless the condition of the body clearly establishes that death has occurred, if family or other loved ones request lifesaving measures be taken, emergency personnel are going to do so. Regardless, family or other loved ones should be aware if a Directive to Physician or OOH DNR exists, and should know where such documents are located.

When someone dies, death must be pronounced, time of death established and cause and manner of death determined. Each of these items is necessary for a death certificate. If someone was under the care of a physician for a condition and the condition causes the person’s death, the physician can make the determination.16 Therefore, having the attending physician’s information available is important to potentially expedite removal of the body. If there is no attending physician, then depending on the county, once death has occurred, either a justice of the peace (“JP”) or a medical examiner (“ME”)17 is called to make the determination of death.18 Smaller counties tend to have one or more justices of the peace. If there is more than one JP, each has his or her own precinct within the county for which the JP is responsible for 24 hours a day, seven days a week.19 A more populated county’s commissioners court may establish a medical examiner’s office to

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November/December 2013

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take over the responsibility of determining cause and manner of death from the JP.20 Several counties may also come together under one ME’s office.

If the cause and manner of death is not apparent, the JP or ME will conduct an inquest. An inquest is a formal or informal investigation into the cause of death and whether the death occurred because of an unlawful act.21 An inquest is always required in certain cases, including unnatural death, suicide or death in a hospital when the person has been admitted for fewer than 24 hours.22 In other words, the general rule is that if there is no evidence as to why someone died or no medical history that shows cause of death, an in-

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quest will be held.

During an inquest, the investigator is given complete access to the scene; will speak with emergency personnel, law enforcement, and others; and do whatever is needed to determine whether an autopsy is needed. If an autopsy is needed, a funeral home in a JP county or a body car in an ME county will transport the body to the autopsy facility.23 An autopsy may be ordered for various reasons, the broadest being to determine cause and manner of death.24 An autopsy may be limited or full, although some facilities will only perform full autopsies. In addition, certain persons in priority, including a decedent’s spouse, guardian or executor, may request that an autopsy be performed.25 Practically speaking, and although frustrating for some, autopsy reports are often not finalized for months.

Although different parties are responsible for determining the various pieces of a death certificate, the person in charge of removal or interment of the body is responsible for filing the death certificate.26 In most cases, the funeral director coordinates the various parties to electronically file the needed information with the state registrar.27 Once the death certificate is filed, any “properly qualified applicant” may obtain a copy from the state registrar.28

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In Texas, if death is not registered within one year, a procedure must be sought through the probate court in the county where the death occurred in order to have a death certificate issued.29 What if death occurs in Texas but burial is to take place in another state or foreign country, or if death occurs in a foreign country and burial is to take place in Texas? The Centers for Disease Control maintains a list of agencies to contact in each state for a death certificate.30 If the body is to be transported to a foreign country, an apostille, an internationally recognized form of authentication, may also have to be obtained to certify the authenticity of the death certificate. In Texas, the apostille is obtained through the Secretary of State’s office. In addition, in order to transport a body by common carrier in Texas, a report of death must be filed and a burialtransport permit must be obtained from either the state registrar or the local registrar where the death certificate is filed in Texas, or if the body is in another state, from the appropriate authority in that state.31 In the United States, bodies are considered cargo for transportation purposes, and specific rules must be followed regarding the type of container that may be used for transport. If death occurs in a foreign country, contact the United States consular office in that country, which has information on the laws of that country regarding what can and will happen next.

The consular office will also assist with obtaining a foreign death certificate, and provide other assistance as needed to dispose of the remains, transport them to the United States, and/or safeguard assets.

FINAL RESTING PLACE In Texas, not only does each person have the right to determine how to dispose of his body (with certain limits), each person has the right to have his remains left undisturbed. Although no one has a property right in relation to remains, if someone has a grave, niche, or the like, the right of sepulture gives him the exclusive right to have his remains interred there and that plot is his separate prop-

erty.32 For any plot in which the decedent is not interred, the surviving spouse has a vested right of interment, although it appears the plot owner may specifically dispose of the plot to someone else in his Will or in writing with the cemetery, subject to the spouse’s vested right.33 The surviving spouse may waive the right, but for a conveyance of the plot to occur, the spouse must consent.34 The statute also provides other inheritance rights in addition to those of the spouse.

Cemeteries and crematories are for human bodies, which means that pets cannot be buried or cremated with you.35 Many laws regulate cemeteries, and, because space for the living is at a premium, family cemeteries are more difficult to establish. Once a cemetery is a cemetery, it stays so unless all of the bodies are removed.

A body can be taken to a crematory and be held there, but cremation may not occur earlier than 48 hours after death without a waiver.36 Cremations are relatively private, and only certain people are allowed to be present.37 Once cremation takes place, no special permit is needed to transport the cremains, and disposal can take place just about anywhere.38

2. TEX. HEALTH & SAFETY CODE ANN. § 166.154.

3. TEX. HEALTH & SAFETY CODE ANN. § 166.083.

4. TEX. HEALTH & SAFETY CODE ANN. §§ 166.082, 166.084.

5. TEX. HEALTH & SAFETY CODE ANN. § 691.033.

6. TEX. HEALTH & SAFETY CODE ANN. § 691.028.

7. TEX. HEALTH & SAFETY CODE ANN. §§ 691.028, 691.030.

8. TEX. HEALTH & SAFETY CODE ANN. § 692A.002.

9. Id. 10. TEX. HEALTH & SAFETY CODE ANN. §§ 692A.011(g),(h).

11. TEX. HEALTH & SAFETY CODE ANN. § 711.002(a) & (a-1). Although liable for the costs, reimbursement could be sought from the decedent’s estate.

12. TEX. HEALTH & SAFETY CODE ANN. § 711.002(a).

13. TEX. HEALTH & SAFETY CODE ANN. § 711.002(a-1).

14. TEX. HEALTH & SAFETY CODE ANN. § 711.002(e).

15. The statute is clear that the right to dispose must be exercised by a specific date or the right is terminated; nonetheless, funeral homes seem to be wary. To obtain an order, Texas Health & Safety Code Section 711.002(k) provides that such an order is from a “court of competent jurisdiction.” Presumably, a probate court would only have such authority if a probate application had been filed prior to or in conjunction with an application regarding the disposition of the remains.

16. TEX. HEALTH & SAFETY CODE ANN. § 193.005(b).

17. Texas does not have coroners.

18. TEX. HEALTH & SAFETY CODE ANN. § 193.005(b).

19. In addition to determining cause and manner of death, JPs have jail magistrate, jury trial, traffic court, and other responsibilities. JPs are elected officials and are not required to have medical training whereas MEs must be physicians. Although some counties permit a JP to hire a death investigator to assist, in the typical county, the

JP must go to each scene in person. In contrast, an ME’s office typically has forensic investigators who go to the scene.

20. TEX. CODE CRIM. PROC. ANN. art. 49.04.

21. TEX. CODE CRIM. PROC. ANN. arts. 49.01(2), 49.25(8).

A formal inquest involves a hearing and is rare but provides leverage to force people to cooperate.

22. TEX. CODE CRIM. PROC. ANN. arts. 49.04, 49.25(6).

23. Ambulances cannot transport dead bodies to an autopsy facility.

24. TEX. CODE CRIM. PROC. ANN. arts. 49.10, 49.25(9); TEX. FAM. CODE ANN. §§ 264.514, 264.515.

25. TEX. CODE CRIM. PROC. ANN. art. 49.33.

26. TEX. HEALTH & SAFETY CODE ANN. § 193.002.

27. If someone has donated his or her body, the donee organization may serve as the funeral director.

28. The state registrar is the Unit Director of the Vital Statistics Unit of the Texas Department of State Health Services. In addition to a spouse, an applicant includes a child, parent, sibling and grandparent.

29. TEX. HEALTH & SAFETY CODE ANN. § 193.007.

30. The website is www.cdc.gov/nchs/w2w.com.

31. 25 TEX. ADMIN. CODE § 181.2; TEX. HEALTH & SAFETY CODE ANN. § 193.008.

32. TEX. HEALTH & SAFETY CODE ANN. § 711.039.

33. TEX. HEALTH & SAFETY CODE ANN. §§ 711.039(b),(e).

34. TEX. HEALTH & SAFETY CODE ANN. §§ 711.039(c),(f).

35. TEX. HEALTH & SAFETY CODE ANN. § 711.001.

36. TEX. HEALTH & SAFETY CODE ANN. §§ 716.0035, 716.004 37. TEX. HEALTH & SAFETY CODE ANN. §§ 716.151, 716.152(b).

38. TEX. HEALTH & SAFETY CODE ANN. §§ 716.301, 716.302(e), 716.304.

CONCLUSION Death is inevitable. Clients have many choices as to what happens not only with their assets, but also what happens to them personally. We can help ease some of the related stress and emotional aspects of death by knowing not just the laws regarding estate planning and probate, but also some of the practical issues related to death, and to be able to share that information with clients and their loved ones.

Melissa J. Willms is a partner in Davis & Willms, PLLC, a Houston law firm whose attorneys focus on estate planning, and estate and trust administration. She is board certified in Estate Planning and Probate Law and earned an LL.M. in Tax Law from the University of Houston Law Center..

Endnotes 1. TEX. HEALTH & SAFETY CODE ANN. Ch. 166.

a

No judge, no jury, no apel late court Y O U determine t he value of your case. thehoustonlawyer.com

November/December 2013

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By John A. Nechman

Protecting U Immigrant Children from Deportation: ndocumented, sometimes brutally abused children, many not even teenagers, are among the most vulnerable people in our society. They often undertake perilous journeys alone from their native countries, sometimes over thousands of miles and many international borders, to get to the United States, many times in search of parents who had left for the United States earlier. Other youth come to “El Norte� to escape unimaginable violence, civil war and street gangs, as well as persecution from their own governments. If they survive the journey (many do not) and somehow evade ever-more vigilant

The Role of Texas Probate Courts in Determining Special Immigration Juvenile Status

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November/December 2013

thehoustonlawyer.com

federal border patrols, they may become victims of human trafficking, the sex industry and other horrific forms of exploitation. Moreover, they live under daily threats of arrest, detention, and deportation while finding it impossible to obtain lawful employment or attend college.

To address these challenges, Congress created Special Immigrant Juvenile Status (SIJS), which allows eligible unaccompanied immigrant children to remain in a safe environment in this country and places them on a path to become legal permanent residents of the United States. You may be surprised

to learn of the important role that the Texas probate courts play in this process.

Special Immigrant Juvenile Status (SIJS) Most unaccompanied, undocumented immigrant children coming to this country have few options for legal relief to prevent deportation or detention. The number of juveniles that are detained and deported has increased dramatically over the past decade. SIJS is a form of relief that allows for an undocumented child under the jurisdiction of a state juvenile court, if found to be eligible for long-term foster care because of drug abuse, abandonment or neglect, to remain in the United States and eventually apply for adjustment of status to a Lawful Permanent Resident.

Before the Department of Homeland Security’s U.S. Citizenship Immigration Services (USCIS) can adjudicate an SIJS case, a state juvenile court has to find that the child has been abused, abandoned or neglected by a parent or both parents and that it is in the best interest of the child not to be returned to his or her country of citizenship.

Texas Probate Courts are Eligible to Make SIJS Custody Determinations Under the Code of Federal Regulations (CFR), a juvenile court is defined as “a court located in the United States having jurisdiction under state law to make judicial determinations about the custody and care of juveniles.” In Texas, the court may be a juvenile court, family court, county court at law, child welfare court (for juveniles in the custody of the Texas Department of Protective and Family Services and Child Protective Services) or probate court, particularly in guardianship proceedings for children who are non-detained and reunified with family members in the United States.

Problems The SIJS process is complex and far 22

November/December 2013

from problem-free. The most serious issues are that nearly all unaccompanied foreign children arrivees are unable to pay for or obtain competent legal representation and pro bono representation is very limited. Many attorneys with substantial family or probate law experience who would normally jump at the chance to represent pro bono children in need are overwhelmed at the thought of tackling the infamous complexities of immigration law, an integral part of the SIJS process. Furthermore, differing and perplexing standards exist as to how and when state courts can exercise jurisdiction. Some state judges who, despite having valid jurisdiction to make necessary custody determinations, are reluctant to do so, often because of unfamiliarity with immigration and SIJS law.

Family courts in Texas have jurisdiction over juveniles, and make custody determinations through the Suit Affecting Parent-Child Relationship (“SAPCR”) procedure. In typical family court cases, like custody suits and divorce proceedings, a guardian petitions on behalf of the minor child. This also occurs in probate court in guardianship proceedings where a non-detained undocumented child is being unified or reunified with U.S. family members who have standing to serve as guardians. The potential guardian must first meet a six-month minimum custody requirement to have standing to file the application for guardianship.

However, in cases involving unaccompanied alien minors where there is no guardian to file the petition, the child, on his or her own or through a representative, must file a self-petition in juvenile or family court. Many such petitions are denied because of procedural snafus, failure to comply with critical deadlines and legal confusion, often from judges unclear on SIJS law and their authority to consider selfpetitions filed by minors. Unaccompanied alien children unable to obtain a state court determination in their favor

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are barred from seeking relief from an immigration judge and thus find themselves facing deportation to countries from which they may have fled unspeakable horrors and where they often have no remaining family.

Conclusion Though challenging, Special Immigrant Juvenile Status cases allow Texas attorneys, including probate attorneys, the opportunity to impact and save lives of children with nowhere else to turn.

John A. Nechman is a partner in the Houston, Texas law office of Katine and Nechman L.L.P., where he focuses on immigration, criminal and international law. He is also is an adjunct professor at South Texas College of Law in Houston.

Endnotes 1. Wendy Young & Megan McKenna, Special Project: The Measure of a Society: The Treatment of Unaccompanied Refugee and Immigrant Children in the United States, 45 HARV. C.R.-C.L. L. REV. 247, 2010.

2. Immigrant and Nationality Act § 101(a)(27)(j), 8 U.S.C. § 1101(a)(27)(j), amended by William Wilberforce Trafficking Victims Protection Reauthorization Act of 2008, 8 U.S.C.A. § 1232 (2009).

3. An “unaccompanied alien child” is a child who: “(A) has no lawful immigration status in the United States; (B) has not attained 18 years of age; and (C) with respect to whom (i) there is no parent or legal guardian in the United States; or (ii) no parent or legal guardian in the United States is available to provide care and physical custody.” 6 U.S.C. § 279(g)(2).

4. The Code of Federal Regulations sets forth the standards for implementing the statute at 8 C.F.R. § 204.11.

5. 8 C.F.R. § 204.11 (2009).

6. Id. at § 204.11(a).

7. TEX. FAM. CODE ANN. § 101.032 (West 2008) (“Suit Affecting the Parent-Child Relationship: (a) “Suit affecting the parent-child relationship” means a suit filed as provided by this title in which the appointment of a managing conservator or a possessory conservator, access to or support of a child, or establishment or termination of the parent-child relationship is requested.”).

8. Id. 9. TEX. FAM. CODE ANN. § 102.003 (West 2008 & Supp. 2013) (“General Standing to File Suit: (a) An original suit may be filed at any time by:... (2) the child through a representative authorized by the court.”).

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11/14/13 November/December 20131:33 PM 23

Estate Planning and Elder Law Issues after Windsor

By Jerry W. Simoneaux, Jr.

T

he simple act of being married triggers 1,198 federal laws1 —rights and obligations that most of us take for granted such as taxation, Social Security, Medicare, military and veteran benefits, and employment benefits and protections, just to name a few. Estate planners and elder law attorneys are very adept in utilizing these laws to gain favorable tax advantages for their married clients and maximize benefits for senior married or widowed clients. However, none of these rights and obligations was available to same-sex couples, so planners had to treat same-sex committed couples as if they were strangers. The Supreme Court ruling in Windsor v. United States2 changed (almost) all of that.

But the change in federal recognition of same-sex marriage brings new challenges of which estate planning and elder law attorneys need to be aware.

Congress passed and President Clinton signed the Defense of Marriage Act3 (DOMA), in 1996, in the wake of a Hawaii Supreme Court decision declaring its state’s ban on same-sex marriage unconstitutional, stating colorfully that the ban “[ran] aground on the shoals” of the state’s constitutional equal protection clause.4 DOMA contains two distinct parts: first, it defines marriage for federal purposes as the union of one man and one woman;5 second, it allows states the option not to recognize samesex marriages from other states.6 Many states quickly followed with their own state law and constitutional versions of DOMA, which are sometimes called “mini-DOMA’s.”

In 1997, the Texas legislature amended the Family Code to prohibit the issuance of marriage licenses to persons of the same sex.7 In 2003, the legislature again changed the Family Code to prohibit recognition of same sex marriage or civil unions, stating that “a marriage between persons of the same sex or a civil union is

contrary to the public policy of this state and is void in this state.”8 Then, in 2005, voters amended the Texas Constitution’s Bill of Rights to define marriage as the union of one man and one woman, and prohibited the creation or recognition of “any legal status identical or similar to marriage.”9 Around the world and in other states, the reaction was different. Through legal challenges or by legislative action, the definition of marriage was expanded to include the union of persons of the same sex. Today, 16 countries, 13 states and the District of Columbia recognize same-sex marriage. Roughly 30 percent of Americans now live in a state where same-sex marriage is recognized. Nonetheless, states like Texas can still rely on the federal DOMA and its own miniDOMA to avoid recognition of those relationships at the state level.

Prior to Windsor, the federal government treated a lawfully married same-sex couple as unmarried for the purpose of federal taxation, Social Security, Veterans Administration benefits and myriad other federal benefits. If a same-sex married couple moved to Texas, the state additionally treated their marriage as non-existent for all state law purposes.

Therefore, estate planning and elder law attorneys were limited to the few tools that they could use for other non-married persons—until the Windsor decision.

Edith Windsor and Thea Spyer had been in a committed relationship for over 40 years by the time they were lawfully married in Ontario, Canada in 2007. Their home was in the State of New York. At the time of their marriage, New York recognized same-sex marriages from other states or countries, though it did not permit same-sex marriages to occur in the Empire State. Spyer died in 2009 leaving her entire estate to Windsor. Windsor paid $363,053 in estate taxes because she was not entitled to the federal estate tax marital exemption.

She sought a refund and challenged the constitutionality of DOMA’s provision

restricting recognition of marriage to opposite sex couples.

The Supreme Court found DOMA’s definition of marriage unconstitutional as a deprivation of equal rights protected by the Fifth Amendment to the U.S. Constitution. The issue of whether other states would have to recognize same-sex marriages from other jurisdictions was not before the Court and, thus, not decided. The result is that the federal government must recognize same-sex marriages for couples who live in states that permit them. Less clear is whether the federal government will recognize samesex marriages performed lawfully in one state when the couple move to or live in another that does not recognize their marriage.

Federal law recognizes the validity of a marriage based on the laws of either the jurisdiction where it took place (where celebrated), or where the couple lives (where domiciled). In immigration cases, for example, federal law looks to the place where the marriage was celebrated to determine its validity. For Social Security, a marriage is recognized based on where the couple lives. The issue that arose most often in Social Security cases was whether the state where the couple lived permitted informal or common law marriages. Before Windsor, the federal government did not recognize same-sex marriage at all, so the question of where celebrated or where domiciled was never an issue.

Almost immediately following the Windsor decision, government offices began reviewing the laws to determine how and whether to recognize same-sex marriages based on where the couple married or where they live. Currently, most federal government departments and agencies have adopted a “where celebrated” rule for determining whether a same-sex marriage is valid under federal law. Importantly for estate planning and elder law attorneys, the following have adopted the “where celebrated” rule: (1) Internal Revenue Service (income, estate, and gift tax);10 (2) Department of

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25

Labor (ERISA); (3) Department of Veteran Affairs;12 (4) Department of Defense (military benefits).13 The Social Security Administration has issued more complex rules.14 In brief, the SSA will extend benefits when the couple are lawfully married and the number holder (NH) is domiciled in a state that recognizes same-sex marriages at the time the application is filed or is being processed. For example, if the couple married and lived in a state that recognizes same-sex marriage, their application would be approved (presuming all other eligibility requirements are met).

If the couple married in a state that recognizes same-sex marriage, but lived in another state that does not recognize it at the time they file their claim or the claim is pending, the claim would be put on hold. However, if the person on whose Social Security number the spouse was making a claim lived in a state that recognized their marriage, even if the claimant lived in a non-recognition state, then the claim would be approved.15

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November/December 2013

Estate planning and elder law attorneys can now take advantage of many taxation and entitlement programs to assist their same-sex married clients that were not previously available. Practitioners in states that recognize same-sex marriage are able to treat their clients like any other married couple for all purposes, both state and federal. However, attorneys in non-recognition states must employ extra due diligence in order to determine whether their clients are eligible for the same treatment as other married couples.

Same-sex couples who were lawfully married elsewhere, but live in non-recognition states, such as Texas, are not eligible for treatment as married couples under state laws that otherwise apply to married couples. Whether they will be recognized as married for federal purposes requires further investigation by the attorney. First, the practitioner should confirm whether the couple was married in a state or country that recognizes same-sex marriage. At this point,

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it is important to make a distinction between being married and being in a civil union or domestic partnership. The Windsor ruling and its effect on DOMA apply only to lawful marriages, not to civil unions or partnerships. Some states, such as New Jersey, Illinois, Colorado, Nevada and Oregon recognize same-sex relationships, but do not call them marriages; therefore, Windsor does not apply.

If the couple has a lawful marriage, then the practitioner must review federal law and regulations, which change daily, to determine whether recognition of the marriage is based on the place where the marriage was celebrated or where the couple is domiciled (or where one of them is domiciled, as in the case of the Social Security Administration). If federal treatment turns on domiciliary, the practitioner should verify where each person resides.

Once the practitioner determines that the couple is eligible for treatment as married under the federal law, he or she must still contend with the mix of

federal recognition but lack of state recognition. Because property rights are determined at the state level, a samesex marriage cannot create community property.16 The question of whether the State has jurisdiction to hear a divorce suit between same-sex married couples is currently before the Texas Supreme Court with oral arguments set for November 5, 2013.17 State law also controls inheritance and the rights of surviving spouses. In Texas, a same-sex surviving spouse will not inherit from the deceased spouse who died without a will,18 be able to claim homestead rights in the real property of the deceased spouse19 or be entitled to a family allowance.20 Conversely, samesex married couples in Texas can take advantage of the unlimited marital deduction in estate planning, claim spousal and death benefits through the Veterans Administration, Department of Defense, Medicare and, in some instances, Social Security. Same-sex married couples in Texas may also receive other federal pro-

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tections through laws such as the Family Medical Leave Act and ERISA. In striking down the federal definition of marriage in DOMA, the Windsor decision is a major sea change for same-sex couples whose lawful marriages are now recognized by the federal government.

For estate planning and elder law attorneys, the partial demise of DOMA opens up many more options for their clients in same-sex marriages. However, there is still a lack of parity between samesex and opposite-sex marriages. Because Windsor did not challenge the second prong of DOMA, which permits states to choose not to recognize same-sex marriages from other jurisdictions, samesex married couples in non-recognition states will have no access to any of the benefits and protections that state laws offer to heterosexual married couples.

Further, attorneys in those states will have to be aware of which federal laws apply, and which may not, based on where the couple married and where

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November/December 2013

they live. Those laws are in flux, so attorneys should check often and with each new set of clients.

Jerry W. Simoneaux is an associate with Galligan & Manning, where his practice focuses on guardianship, probate, and trust litigation. He is a former staff attorney for Harris County Probate Court No. 1 and a former adjunct law professor at South Texas College of Law. Endnotes 1. Government Accounting Office Report GAO04-353R “Defense of Marriage Act–Update to Prior Report” (Jan. 24, 2004, available at http://www.gao.gov/new.items/d04353r.pdf, last visited September 21, 2013.

2. Windsor v. United States, 570 U.S. ___, 133 S.Ct. 2884 (2013).

3. Pub. L. No. 104-199 (Sept. 21, 1996).

4. Baehr v. Lewin, 882 P.2d 44 (Haw. 1993). In 1998, Hawaii passed a constitutional amendment granting the legislature the power to define marriage. The legislature chose to restrict marriage to a union of one man and one woman.

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5. 1 U.S.C. § 7.

6. 28 U.S.C. § 1738C. 7. TEX. FAM. CODE ANN. § 2.001.

8. TEX. FAM. CODE ANN. § 6.204.

9. TEX. CONST. art. 1 § 32.

10. Rev. Rule 2013-17 (IR 2013-72, Aug. 29, 2013).

11. Tech. Rel. No. 2013-04, Sept. 18, 2013.

12. Department of Justice Press Release, Sept.

4, 2013, available at http://www.justice.gov/ opa/pr/2013/September/13-ag-991.html, last viewed September 22, 2013.

13. Department of Defense Press Release, Aug. 13, 2013, available at http://www.defense.gov/ home/features/2013/docs/Extending-Benefits-to-Same-Sex-Spouses-of-Military-Members.pdf, last visited Sept. 22, 2013.

14. SSA-POMS: GN 00210.100, Sept. 17, 2013, and SSA-POMS: GN 00210.005, Aug. 17, 2013.

15. Id. 16. See generally TEX. FAM. CODE ANN. §§ 3.002, 3.003.

17. State of Texas v. Angelique S. Naylor and Sabina Daly, 2013 Tex. LEXIS 607 (Tex. Aug. 23, 2013).

18. See generally TEX. PROB. CODE ANN. §§ 37, 45.

19. TEX. PROB. CODE ANN. §§ 271, 282; TEX. CONST. art. 16 & 51.

20. TEX. PROB. CODE ANN. § 286-293.

Join the Houston Bar Association’s 100 Club The Houston Bar Association 100 Club is a special category of membership that indicates a commitment to the advancement of the legal profession and the betterment of the community. The following law firms, corporate legal departments, law schools and government agencies with five or more attorneys have become members of the 100 Club by enrolling 100 percent of their attorneys as members of the HBA. Firms of 5-24 Attorneys Abraham, Watkins, Nichols, Sorrels, Agosto & Friend Adair & Myers PLLC Ajamie LLP Andrews Myers, P.C. Bair Hilty, P.C. Baker Williams Matthiesen LLP The Bale Law Firm, PLLC Barrett Daffin Frappier Turner & Engel, LLP Bateman | Pugh | Chambers, PLLC Bell, Ryniker & Letourneau, P.C. Berg & Androphy Bingham, Mann & House Blank Rome LLP Brewer & Pritchard PC Buck Keenan LLP Burck, Lapidus, Jackson & Chase, P.C. Bush & Ramirez, P.L.L.C. Caddell & Chapman Cage Hill & Niehaus, L.L.P. Campbell Harrison & Dagley LLP Campbell & Riggs, P.C. Chernosky Smith Ressling & Smith PLLC Christian Smith & Jewell, L.L.P. Connelly • Baker • Wotring LLP Cozen O’Connor Crady, Jewett & McCulley, LLP David Black & Associates De Lange Hudspeth McConnell & Tibbets LLP Devlin Naylor & Turbyfill PLLC Dinkins Kelly Lenox Lamb & Walker, L.L.P. Dobrowski, Larkin & Johnson LLP Dow Golub Remels & Beverly, LLP Doyle Restrepo Harvin & Robbins, L.L.P. Ebanks Horne Rota Moos LLP Edison, McDowell & Hetherington LLP Ellis, Carstarphen, Dougherty & Griggs P.C. Ewing & Jones, PLLC Faubus Keller LLP Fernelius Alvarez PLLC Fibich Hampton Leebron Briggs Josephson, LLP Fisher, Boyd, Brown & Huguenard, LLP Fisher & Phillips LLP Fizer Beck Webster Bentley & Scroggins, P.C. Fleming, Nolen & Jez, L.L.P. Frank, Elmore, Lievens, Chesney & Turet, L.L.P. Fullenweider Wilhite PC Funderburk Funderburk Courtois, LLP Galloway Johnson Tompkins Burr & Smith Germer PLLC Givens & Johnston PLLC Godwin Lewis, P.C. Goldstein Law PLLC Gordon & Rees LLP Greer, Herz & Adams, L.L.P. Hagans Burdine Montgomery & Rustay, P.C. Harberg Huvard Jacobs Wadler LLP Harris, Hilburn & Sherer Harrison, Bettis, Staff, McFarland & Weems, L.L.P. Hartline Dacus Barger Dreyer LLP

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By Jeff McClean and Robert Tartleton

Rethinking Traditional Estate Planning:

The New Portability Calculus T

he introduction of “portability” by the Tax Relief, Unemployment Insurance Reauthorization, and Jobs Creation Act of 20101 (the “2010 Act”) has caused estate planning attorneys in Texas and throughout the country to rethink the traditional estate planning advice that they have been providing for decades. Portability allows the unused portion of a deceased spouse’s estate tax exclusion amount (defined by the Internal Revenue Code § 2010(c)(4) as the “deceased spousal unused exclusion amount” or the “DSUE” amount, for short) to be preserved for use by the surviving spouse.

In addition to introducing portabil-

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November/December 2013

Year of Death

Applicable Exclusion Amount

Top Marginal Rate

1983

$275,000

60%

1984

$325,000

55%

1985

$400,000

55%

1986

$500,000

55%

1987-97

$600,000

55%

1998

$625,000

55%

1999

$650,000

55%

2000-01

$675,000

55%

2002-03

$1,000,000

50%/49%

2004-05

$1,500,000

48%/47%

2006-08

$2,000,000

46%/45%/45%

2009

$3,500,000

45%

2010

N/A or $5,000,000

N/A or 35%

2011

$5,000,000

35%

2012

$5,120,000

35%

2013+

$5,250,000, indexed for inflation

40%

4

ity, the 2010 Act: (1) re-unified the estate, gift and generation-skipping transfer (“GST”) tax exclusions and rates for the first time since 2001; and (2) increased the estate, gift and GST tax exclusions to $5 million, adjusted annually for inflation after 2011. The American Taxpayer Relief Act of 20122 made these monumental changes permanent.3 The introduction of portability and the increase in exclusion amounts constitute the most significant revisions to the estate and gift tax laws in the last 30 years.

The following chart outlines the dramatic rise of the “estate tax exclusion amount,” or the amount an in-

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dividual can transfer estate tax-free to any other individual, over the last 30 years: Traditional Bypass Trust Planning Before the introduction of portability, traditional estate planning for a married couple with potentially taxable estates almost uniformly included the incorporation of a testamentary bypass or credit-shelter trust to capture the estate tax exclusion amount of the first spouse to die. Although the unlimited marital deduction prevented taxation at the first death to the extent that assets were left to the surviving spouse, the unused estate tax exclusion amount of the deceased spouse was lost if not used (“use it or lose it”), and the combined estates of a married couple could then only rely on the survivor’s estate tax exclusion amount. With the introduction of portability, however, the use it or lose it constraint no longer exists.

Notwithstanding the introduction of portability, bypass trust planning for a married couple with a potentially taxable estate continues to have several advantages. Notably, all future appreciation in the bypass trust can pass to children estate tax free, and, with additional planning,

to grandchildren (and even more distant generations) estate tax and GST tax free.

The trust assets are also protected from divorce and creditors of the surviving spouse.

Moreover, a bypass trust enables the deceased spouse to control the ultimate disposition of the trust assets after death.

Such control can be incredibly important in blended family situations where each spouse wants his or her surviving spouse to benefit from the assets during the surviving spouse’s lifetime, but also desires that his or her descendants (and not the surviving spouse’s descendants or new spouse) receive the assets upon the surviving spouse’s death.

Finally, bypass trust planning avoids the additional costs of filing of an estate tax return (which filing is required to claim portability), and does not rely on the executor to make the necessary portability election. Portability also remains available for any estate tax exclusion amount of the deceased spouse that goes unused.

The disadvantages to bypass trust planning remain similar to the times prior to portability (filing income tax returns, general trust administration and conflicts between beneficiaries and trustees). The lack of a step-up in income tax basis for the bypass trust assets at the second death has, however, become more significant, especially with the increase in capital gain and income tax rates. Trusts are subject to a compressed income tax bracket and pay the highest income tax rate when there is over $11,950 of undistributed income (in 2013).5 Also, beginning in 2013, the Health Care and Education Reconciliation Act of 2010 applies a 3.8 percent Medicare tax on the lesser of a trust’s undistributed net investment income or its excess of adjusted gross income above $11,950 (in 2013).6 In comparison, a single person is subject to the 3.8 percent Medicare tax on the lesser of net investment income or the excess of adjusted gross income above $200,000 (in 2013).7 To illustrate traditional bypass trust planning, presume a married couple (H

and W) with an $8 million community estate. Rather than give all of his assets to W outright, H gives his $4 million portion of the community estate to a bypass trust for the primary benefit of W. The gift to the bypass trust utilizes H’s estate tax exclusion amount so the assets are not taxed at H’s death. Moreover, W retains the option to elect portability to capture H’s remaining $1.25 million estate tax exclusion amount (in 2013).

Upon W’s death, the bypass trust assets, including any appreciation thereon, pass estate tax free to the children of H and W (or to other named beneficiaries) in separate lifetime trusts. The bypass trust assets do not receive a step-up in income tax basis. W’s estate also passes to the children of H and W in separate lifetime trusts.

The gift of W’s $4 million estate utilizes W’s estate tax exclusion amount and passes estate tax free. All of the trusts created for the children of H and W are entirely exempt from the GST tax. Accordingly, upon a child’s death, the trust assets may pass free of estate tax and GST tax to the child’s descendants.

Planning with Portability As described above, portability allows the unused portion of a deceased spouse’s exclusion amount to be preserved for use by the surviving spouse. But portability is not automatic. The executor must timely file an estate tax return for the deceased spouse’s estate to elect portability.8 Conflict can arise between the person who has the power to make the portability election, the executor and the primary person who stands to benefit, the surviving spouse. In blended families where one or both of the spouses has children from a prior marriage, this conflict can create major tension. For example, disagreements may arise between a child from a first marriage who is serving as executor and the surviving spouse over who should pay the cost of preparing the estate tax return if it is being filed solely to elect portability. The cost of preparing the estate tax return could come from the surviving spouse’s share or from the share for

the children of the first marriage.

When dealing with a blended family, an attorney should consider including a provision in the Wills directing the executor to file an estate tax return for portability purposes if the surviving spouse requests it in writing, and another provision specifically addressing who should pay for the additional cost. If an executor decides not to elect portability, it would also be wise for the attorney who represents the executor to have written correspondence in the file to show that the executor was advised of the option to elect portability and chose not to make the election.

Once portability is properly elected, the surviving spouse may then use the DSUE amount for lifetime gifts or for reducing estate tax liability upon death. Portability can be advantageous because it avoids the necessity of creating a bypass trust solely to capture the estate tax exclusion amount upon the first death. Importantly, all of the assets receive a second step-up in income tax basis at the second death (conversely, if the assets had decreased in value between the first and second death, the assets then receive a step-down in income tax basis). As mentioned above, the increase in capital gain and income tax rates and the compressed income tax brackets for trusts have made trusts less appealing. For a married couple with a combined estate value less than the estate tax exclusion amount, portability planning may provide the best solution. This can be particularly true in situations in which the largest asset in the estate is an IRA or other qualified plan asset that does not fit well within a trust.

Serious disadvantages to portability exist. Although the estate tax exclusion amount can be carried over to the surviving spouse if portability is elected, portability does not allow the GST exclusion to be transferred to the surviving spouse. If portability is relied upon at the first death, the GST exclusion of the deceased spouse is lost and the surviving spouse will be limited to only one GST exclusion to use for the community estate. Another disadvantage to portability is that the DSUE

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November/December 2013

31

W) with an $8 million community estate.

At H’s death, H gives his $4 million portion of the community estate to W outright. Although an estate tax return is not required for H’s estate, the executor of H’s estate timely files an estate tax return electing portability. As a result, W receives H’s entire DSUE amount ($5.25 million in 2013) because H’s $4 million estate passing outright to W qualifies for the unlimited marital deduction, and, thus, H uses none of his exclusion.

Upon W’s death, W’s $8 million estate passes estate tax free to the children of H and W (or to other named beneficiaries) in separate lifetime trusts. All of the estate’s assets receive a step-up in income tax basis. The gift of W’s $8 million estate utilizes W’s estate tax exclusion amount and the DSUE amount from H’s estate to pass estate tax free. However, only $5.25 million of the $8 million estate will pass to trusts for the children of H and W that are exempt from the GST tax. The remaining $2.75 million of the $8 million estate passes to separate lifetime trusts for the children that are not for these career-building mediation and arbitration courses from the A.A. White Dispute Resolution Center at the exempt from GST University of Houston Law Center. tax. Upon a child’s death, the trusts 40-HOUR BASIC MEDIATION TRAINING exempt from the 41.75 hours of CLE credit, includes 4.5 hours of ethics.

All materials meals, and parking included. Total cost: $1,185.

GST tax will pass free of estate and JANUARY 6-10, 2014 (five days total) GST tax to the Monday - Friday 8:30 a.m. - 6:00 p.m. child’s descenJUNE 6-8 & JUNE 13-15, 2014 (six days total) dants; however, Fridays 1:00 p.m. - 6:00 p.m. the non-exempt Saturdays 8:30 a.m. - 6:00 p.m. trust for each Sundays 11:00 a.m. - 5:30 p.m. child will either SEPT. 12-14 & SEPT. 19-21 13-15, 2014 (six days total) be included in the Fridays 1:00 p.m. - 6:00 p.m. child’s estate for Saturdays 8:30 a.m. - 6:00 p.m.

Sundays 11:00 a.m. - 5:30 p.m. estate tax purposes or will be subSPECIALIZED COURSE IN COMMERCIAL ARBITRATION ject to the 40 per28 hours of CLE credit, includes 4.75 hours of ethics.

All materials meals, and parking included. Total cost: $1,925. cent GST tax rate (in 2013), both of JANUARY 8-11, 2014 (four days total) which could have Wednesday - Friday 8:30 a.m. - 5:30 p.m.

8:30 a.m. - 2:30 p.m.

Saturdays been avoided with traditional bypass trust planning.

UH is an EEO/AA institution.

amount will be fixed as of the first death, while the bypass trust approach protects future appreciation from estate and GST tax. Moreover, when portability is elected on a timely filed estate tax return, the three-year statute of limitations for the IRS to examine the return is tolled until the second death and the IRS may then adjust the DSUE amount reported on the previous return.9 Another important limitation regarding the DSUE amount is that of the “last deceased spouse.” When a surviving spouse is preceded in death by more than one spouse, the surviving spouse will not be entitled to any DSUE amount from an earlier spouse–only the most recent spouse’s unused exclusion will be available for portability purposes.10 This can be a tremendous detriment when a subsequent spouse has a smaller DSUE amount in comparison to an earlier spouse for whom portability was elected.

To illustrate planning with portability, presume again a married couple (H and

MARK YOUR CALENDARS

32

November/December 2013

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Disclaimer Planning A hybrid approach that is commonly referred to as “disclaimer planning” is available as an alternative to traditional bypass trust and portability planning. A disclaimer plan allows the surviving spouse a “second look” at the death of the first spouse by deferring the decision to use a bypass trust or to rely on portability. This deferral is accomplished by the deceased spouse’s Will generally leaving the estate outright to the surviving spouse, with the surviving spouse given the option to “disclaim” or refuse to accept the assets. Any disclaimed assets would then pass to a bypass trust for the benefit of the surviving spouse. Although disclaimer planning has always been available, the introduction of portability has made disclaimer planning a more enticing option.

To make a qualified disclaimer, the surviving spouse must do so within nine months of the date of the deceased spouse’s death by a written memorandum of disclaimer.11 The memorandum of disclaimer must be received by the executor and be filed with the probate court in which the deceased spouse’s Will has been probated.12 Because of recent changes in Texas law, the memorandum of disclaimer should also include a statement that the surviving spouse is not a child support obligor.13 The disclaimed property must pass without any direction by the surviving spouse, and the surviving spouse must not have accepted ownership of the property or any of its benefits prior to disclaiming.14 When a person makes a qualified disclaimer of an interest in property, the interest is treated for transfer tax purposes as if it had never been transferred to the disclaimant.15 The bypass trust that receives the assets after the surviving spouse disclaims can be similar to a traditional bypass trust, except that the surviving spouse cannot have a power of appointment with respect to the trust assets.16 Distributions may still be made to the surviving spouse and to other family members, but distributions must be limited to an “ascertainable standard” (such as a traditional health,

education, maintenance, and support standard). If the surviving spouse elects to receive all of the assets outright instead of disclaiming, the executor of the deceased spouse’s estate could then elect portability as discussed above.

In a blended family, disclaimer planning may not be the best approach. Because the surviving spouse has the option to forego the use of a bypass trust by not disclaiming any of the assets at the first death, the deceased spouse cannot ensure that his or her assets will eventually pass to his or her descendants after the death of the surviving spouse.

To illustrate disclaimer planning, presume again a married couple (H and W) with an $8 million community estate. At H’s death, H gives his $4 million portion of the community estate to W outright, but W has the option to disclaim the assets. If W elects to make a qualified disclaimer as described above, H’s $4 million portion of the community estate will pass to a bypass trust for the primary benefit of W. W will not have a power of appointment over the assets in the bypass trust so at W’s death, the assets will pass as provided in H’s Will.

The bypass trust will then continue as described in the example above for traditional bypass trust planning.

However, if W does not elect to make a qualified disclaimer at H’s death, W will receive H’s $4 million portion of the community estate outright. The executor of H’s estate may then timely file an estate tax return to elect portability. W would then receive H’s entire DSUE amount and her estate would follow the example described above for planning with portability.

Summary Although there has never been a one-sizefits-all plan for a client’s estate planning needs, the introduction of portability has required estate planning attorneys to reevaluate the advice they provide clients and created additional complexity.

Jeff McClean and Robert Tartleton practice estate planning and probate law with the firm of Fizer, Beck, Webster, Bentley & Scroggins.

Endnotes 1. TEX. Tax Relief, Unemployment Insurance Reauthorization, and Jobs Creation Act of 2010, P.L. 111–312.

2. American Taxpayer Relief Act of 2012, P.L. 112–240.

3. Of course, tax laws are never permanent. However, it has been 12 years since we had estate, gift and GST tax laws that did not have a sunset date.

4. Estates for persons dying in 2010 could opt out of the estate tax (in exchange for losing the advantage of a full step-up in income tax basis).

5. Rev. Proc. 2013-15, 2013-5 I.R.B. 2 (dated January 28, 2013).

6. Health Care and Education Reconciliation Act of 2010, P.L. 111-152.

7. Id. 8. Temp. Treas. Reg. § 20.2010-2T(a).

9. See I.R.C. § 2010(c)(5)(B).

10. Temp. Treas. Reg. § 20.2010-3T(a)(3).

11. See I.R.C. § 2518 and TEX. PROB. CODE § 37A. 12. Id. 13. See TEX. ESTATES CODE § 122.107 (effective January 1, 2014).

14. See I.R.C. § 2518 and TEX. PROB. CODE § 37A. 15. Id. 16. A power of appointment allows the surviving spouse to designate in his or her Will who will ultimately receive the trust assets.

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33

Houston Lawyers Who Made a Difference

R

R oy Hof heinz

By The Hon. Mark Davidson

oy Hofheinz was a man in a hurry. He passed the bar exam at 19, was elected to be a State Representative at 21 and was elected Harris County Judge at 23. He was the leader of County Government during World War II, and was in charge of local civil defense efforts and numerous war bond drives.

“The Judge” (a title he answered to for the rest of his life) was elected Mayor of the City of Houston at age 40. As mayor, he desegregated city facilities (such as li-

braries and swimming pools) and restructured Houston’s municipal government to its current structure.

And these were not the most famous of his accomplishments.

In 1956, he decided it would be a great thing to bring major league baseball to Houston. The fact that, at the time, there was no team west or south

“We have a global understanding of law, business, and culture” “We are fully conversant with current U.S.- international bilateral treaties and conventions” www.marshalltaheri.com info@marshalltaheri.com

RADE

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Houston 713.871.0000 Dallas 214.871.0000 Los Angeles 310.557.0000 New York 212.247.0000 Washington, DC 202.333.0000 Consultation by appointment only.

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November/December 2013

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of St. Louis, Missouri did not slow him down, nor did the fact that Houston’s intemperate summer weather might not bring out many fans. Along with R.E. “Bob” Smith, he founded the Houston Sports Association with the express purpose of bringing a team to Houston. They succeeded. While the team played its first two seasons in a Spartan, mosquito-infested field called Colt Stadium, Hofheinz and Smith twice brought bond issues to be voted on by Harris County voters, the goal being to build the thenunthinkable – an indoor baseball stadium. The result was the “Eighth Wonder of the World” – the Astrodome. From its electrical scoreboard, to its “Sky Boxes” (Hofheinz’s way of selling the worst seats in the house for high prices), to the padded seats and the artificial grass field, it revolutionized sports venues.

To everyone who loved watching National League Baseball in Houston in air conditioned comfort, Hofheinz is owed a debt of gratitude. To all Houstonians who love living in a major league city, he made a difference.

The Hon. Mark Davidson is an MDL judge and judge (retired) of the 11th District Court.

His column for The Houston Lawyer focuses on Houston attorneys who have had significant impact on the law, the legal profession and those served by the law.

Pro Bono in Houston...

Rebuilds Families…Helps Veterans . . .Provides Peace of Mind for Seniors

Equal Access Champions

The firms and corporations listed below have agreed to assume a leadership role in providing equal access to justice for all Harris County citizens. Each has signed a five-year commitment to provide representation in a certain number of cases through the Houston Volunteer Lawyers. For more information contact Kay Sim at (713) 759-1133.

Large Firm Champions Andrews Kurth LLP Baker Botts L.L.P. Bracewell & Giuliani LLP Fulbright & Jaworski LLP Locke Lord LLP Vinson & Elkins LLP

Corporate Champions

Baker Hughes Incorporated BP America Inc. CenterPoint Energy, Inc. ConocoPhillips Exxon Mobil Corporation Halliburton LyondellBasell Marathon Oil Company Shell Oil Company

Intermediate Firm Champions Gardere Wynne Sewell LLP Haynes and Boone, L.L.P. King & Spalding LLP

Mid-Size Firm Champions

Adams & Reese LLP Akin Gump Strauss Hauer & Feld LLP Baker Hostetler LLP Beirne, Maynard & Parsons, L.L.P. Chamberlain, Hrdlicka, White, Williams & Aughtry Greenberg Traurig, LLP Jackson Walker L.L.P. Jones Day Looper Reed & McGraw, P.C. Morgan, Lewis & Bockius LLP Porter Hedges LLP

Strasburger & Price, L.L.P. Susman Godfrey LLP Weil, Gotshal & Manges LLP Winstead PC

Small Firm Champions

Abraham, Watkins, Nichols, Sorrels, Agosto & Friend Beck | Redden LLP Gibbs & Bruns LLP Hays, McConn, Rice & Pickering, P.C. Hughes Watters Askanase LLP Johnson DeLuca Kurisky & Gould, P.C. Kroger | Burrus McGuireWoods LLP Schwartz, Junell, Greenberg & Oathout, L.L.P Sidley Austin LLP Sutherland Asbill & Brennan LLP Weycer, Kaplan, Pulaski & Zuber, P.C. Yetter Coleman LLP

Boutique Firm Champions

Blank Rome LLP Coane & Associates Connelly • Baker • Wotring LLP Edison, McDowell & Hetherington LLP Fullenweider Wilhite PC Funderburk Funderburk & Courtois, LLP Hicks Thomas LLP Hogan Lovells US LLP Jenkins & Kamin, L.L.P. Ogden, Gibson, Broocks, Longoria & Hall, L.L.P. Sutton McAughan Deaver LLP Strong Pipkin Bissell & Ledyard, L.L.P. Wilson, Cribbs & Goren, P.C.

Solo Champions

Brian Albrecht Law Office of Peter J. Bennett Law Office of J. Thomas Black, P.C. Law Office of Robbie Gail Charette Chaumette, PLLC Damani Law Firm Helene Dang Law Office of Papa M. Dieye The Ericksen Law Firm Flowers & Frankfort Frye, Steidley, Oaks & Benavidez, PLLC Fuqua & Associates, P.C. Hunton & Williams LLP Law Office of James and Stagg, PLLC Katine & Nechman L.L.P. Kim Ly Law Firm PLLC Gregory S. Lindley Law Office of Maria S. Lowry Alejandro Macias Martin R.G. Marasigan Law Offices Danielle H. Maya The Law Office of Evangeline Mitchell, PLLC Bertrand C. Moser Patel Ervin PLLC Law Office of Brent C. Perry, P.C. Pilgrim Law Office Robert E. Price Cindi L. Robison Scardino & Fazel Shortt & Nguyen, P.C. Jeff Skarda Tindall & England, P.C. Travis Torrence Diane C. Treich Norma Levine Trusch Clinton Yu

A Profile

in pro f e s s io n a l i s m

P

Sarah Patel Pacheco Crain, Caton & James, P.C.

rofessionalism: “the skill, good judgment, and polite behavior that is expected from a person who is trained to do a job well.”

Merriam-Webster

The Houston Lawyer

Twenty years ago, I graduated SMU Law School and accepted a position in Houston. I still recall being repeatedly asked why I decided to begin my legal career in Houston. At the time, I am not sure I had a clear answer. I only knew that I wanted to practice in the trust and estates area. And, Houston, at the time, appeared to provide me the best opportunity to do so. After all, then, like now, Houston was home to many nationally recognized experts – from estate planners to fiduciary litigators.

Twenty years later, I now look back with confi-

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thehoustonlawyer.com

dence that I made the right decision. While my legal education may have given me the tools to become a lawyer, the members of the Houston legal community and, specifically, the many trust and estate attorneys, have taught me about professionalism.

These attorneys and judges continue to practice with extraordinary intellect, zeal, compassion and pragmatism, while at the same time devoting countless hours to sharing their expertise, volunteering their time and creating opportunities for other lawyers to become involved in local and state organizations.

The professionalism of these attorneys and judges has shaped my career. They have set the bar high and I strive every day to live up to their example of “the skill, good judgment, and polite behavior that is expected from a person who is trained to do a job well.”

COMMITTEE SPOTLIGHT

Task Force Provides Help with

Consumer Issues

By Jeffrey L. Oldham

I

n 2009, at a time when the economy was reeling from the recession and home foreclosures were at a peak, the Houston Bar Association’s Consumer Law Task Force was established by then-HBA President Barrett Reasoner.

The Task Force was charged with exploring and developing ways in which the HBA could help families that were facing difficult consumer issues in challenging economic times.

To fulfill its mission, the Task Force recruited members from a cross-section of practice areas and with expertise in consumer law. The members put together relevant resources for attorneys to use, presented seminars to educate attorneys on handling consumer issues, and recruited volunteers to work at consumer-focused clinics through the HBA’s Houston Volunteer Lawyers (HVL). Task Force members also participated as panelists in town hall meetings and other media events designed to provide families with resources to address their problems, particularly in the areas of bankruptcy and foreclosure. Task Force members also researched programs that addressed foreclosures in other cities, as potential models for Houston.

While the economy has improved markedly since 2009, there is still a great need by Houston families for help on consumer issues. The Consumer Law Task Force has continued its important

The Consumer Law Handbooks have been translated into other languages with the help of the Mexican-American Bar Association and the Chinese legal community.

work, including partnering with entities like the Houston Association of Consumer Bankruptcy Attorneys and the Bankruptcy Courts to present seminars that educate attorneys on representing clients with consumer issues.

The Task Force is currently chaired

by Mark E. Steiner, who is the Godwin Lewis PC Research Professor and Professor of Law at South Texas College of Law. The Committee is working on three main projects during this bar year. First, the Task Force is updating and completing a comprehensive Consumer Resource Guide for attorneys that can be used at all legal advice clinics sponsored by the HVL. Second, it is updating the HBA’s Consumer Law Handbook, one of a series of three free legal handbooks for the public that address legal issues in an easily understood, question-and-answer format. Third, Task Force volunteers are staffing three Saturday legal-advice clinics, sponsored by the HVL, to provide advice on consumer law and other legal issues.

To learn more about the Consumer Law Task Force and to access its Consumer Law Handbook, visit www. hba.org.

Jeffrey L. Oldham is an appellate partner at Bracewell & Giuliani LLP and a member of The Houston Lawyer editorial board.

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37

OFF THE RECORD

The Herbert Gee Gavel Dragons Honor Late Judge

By Hon. Josefina Rendón

The Houston Lawyer

I

front drums to the pacers’ counts and the steersperson’s calls (e.g. n 2011, in a public ceremony, Mayor Annise Parker and Prechange of pace, speed, etc.). siding Judge Barbara Hartle renamed the Houston Municipal Eight Houston municipal judges have been Gavel Dragons: Courts Building after Associate Presiding Municipal Judge Judges Barbara Hartle, Berta Mejia, Larry Rousseau, Meg Oswald, Herbert Gee. “Over the years, he mentored many lawyers, Margaret Muñoz-Harkins, Andy Lewis, judges, and court staff, always providMimi Berkowitz and Esmeralda Garcia. ing encouragement, patience and a wealth Assistant City attorney Elizabeth Preciado of legal knowledge. Renaming the building and numerous Municipal Court staff and in his honor is a fitting tribute to this great family have also participated together with public servant, and will serve as a lasting Judge Gee’s wife, Cynthia, and son, Jeff. legacy for all those who enter it,” stated The Texas Dragon Boat Association Judge Hartle. started the sport in the Greater Houston Judge Gee served as Municipal Judge for area in 2000. There are different divisions over two decades and his passing in 2011 of teams: corporate, community, competileft a void at the Municipal Courts DeMuch to their surprise, the Gavel Dragons won tive, etc. In 2007, Jeff Gee was paddling with partment (MCD). Many at the MCD famthe Houston Heat Boat Club team at a race ily wanted to honor him. Accordingly, his their first race. at Allen’s Landing. Judge Gee was working successor in Court 11, Judge Meg Oswald, that Saturday morning but decided to watch kept and displayed his memorabilia in the the races for a while. He enjoyed it so much courtroom. Additionally, she and others dethat he stayed longer than planned. He soon cided to participate in an endeavor that had started participating and constantly talked recently become his passion: Dragon Boat about dragon boating to co-workers who all Racing. soon shared his love for the sport.

Dragon Boating is a centuries-old Asian The HG Gavel Dragons were created in sport. Though competitive and athletic, it is 2012 to enter the Dragon Boat May Festinot physical prowess that determines who wins but teamwork and strategy. The boats Over 30 Houston Municipal Court employees par- val. Jeff and Cynthia Gee invited courthouse are decorated with Chinese dragon heads ticipate in the Gavel Dragons team. members to become a team. “The response and tails. They are 40 feet long, 4 feet wide was incredible,” says Cynthia. A longtime and carry a drummer in front, a steerperson friend donated the shirts and a large banner in back and 20 paddlers. Dragon boats are with a logo designed by Cynthia, a paddle evenly balanced by weight and skill to make with a gavel on top. steering safer. The boat is divided into three On event day, 30 municipal court members, sections. In front, “pacers” set the pace of many of whom had skipped practices, apthe boat as they follow a coach’s instrucpeared. Since only 20 paddlers were needed, tions. In the middle is the “engine room” Jeff Gee rotated them. He also gave them a where the team’s “muscle and power” is crash-course in paddling. concentrated. In back, the “rockets” carry Judge Mimi Berkowitz vividly rememThe Gavel Dragons honor the memory of the late the load and keep the boat from “drop- Judge Herbert Gee. His wife, Cynthia, designed the bers that first day when the Gavel Dragons ping” and slowing down. The drummer in team logo that incorporates a gavel and a paddle.

Continued on page 45 38

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LEGAL TRENDS

Texas Supreme Court Finds Insurer Liable for All Remediation Costs

By Suzanne Chauvin

The Houston Lawyer

I

n Lennar Corp., et. al v. Markel American Insurance Co., --- S.W. ----, 2013 WL 4492800 (Tex.), the Texas Supreme Court relied not only on the language of the insurance contracts at issue, but also looked to precedent, the homebuilder’s responsible actions to repair and prevent further damage, and policy considerations to hold that the insurer was liable for all costs to evaluate and repair damage resulting from construction defects. The case involved a homebuilder’s claim for damage related to an exterior insulation and finish system (EIFS) that was the subject of an exposé on the NBC television show Dateline in 1999. Lennar built about 800 homes using EIFS, but stopped using the system in 1998 when it became apparent that the system was defective. When installed on wood-frame walls, EIFS trapped water inside, causing rot and structural dam-

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age, mildew and mold, and termite infestations.

When Lennar learned of the problems, it contacted homeowners and offered to remove the product from all the homes it had built, and to replace it with conventional stucco. Lennar began its remediation program in 1999 and finished in 2003. Lennar’s insurers refused to cooperate with the remediation program, and the resulting litigation between Lennar and its insurers lasted over twelve years.

All of the insurers except Markel eventually settled, and Lennar won a jury verdict after an eight-day trial. At trial, Lennar offered evidence that the extent of water damage to a home could not be determined without removing all the EIFS. After the product was removed, some homes turned out to have only limited damage, and some had none at all. The jury found that Lennar’s defective use of EIFS in home construction “created an imminent threat to the health or safety of the inhabitants of the homes,” and that Lennar took “reasonable steps to cure the construction defect as soon as practicable and within a reasonable time.” Lennar argued that these findings established its legal liability to the homeowners, and thus, its remediation efforts were not voluntary, which would have precluded coverage under the insurance contract with Markel.

The court of appeals disagreed, and said that Lennar did not establish its legal liability to the homeowners to trigger Markel’s coverage. The Texas Supreme Court was presented with two issues: First, not having consented to the remediation program, was the insurer nevertheless responsible for the costs if it suffered no prejudice as a re-

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sult? Second, was the insurer responsible for (i) costs incurred to determine property damage as well as to repair it, and (ii) costs to remediate damage that began before and continued after the policy period? The Court held for the homebuilder on each issue.

The Court relied on Hernandez v. Gulf Group Lloyds to reject Markel’s argument that it had been prejudiced

by Lennar’s settlements with homeowners. In an interesting and candid discussion, the Court said, “Markel’s argument boils down to this—had Lennar stonewalled the homeowners, fewer repairs would have been made.” The Court then found that the policy language, which covered losses “because of” property damage, included all remediation costs, including the costs to determine the amount of damage, as well as actual repair costs. In holding that the policy covered losses that occurred outside the policy period, the Court noted that the policy expressly included “damage from a continuous exposure to the same harmful conditions.”

Thus, the Court held, coverage included the total amount of loss, not just the loss incurred during the policy period which, in any event, would have been difficult or impossible to segregate.

The decision was unanimous, with only one concurrence by Justice Boyd.

Justice Boyd conceded that precedent required the court to hold as it did.

However, Justice Boyd believed that the requirement of prejudice was imposed by the Court on policy grounds, rather than on pure contract construction, and asserted that a requirement of prejudice should be left to the legislature to determine.

No matter what the outcome in this

LEGAL TRENDS

case, Lennar is likely to spur insurers or homebuilders, or both, to further action. It will be interesting to see whether the extensive interests on both sides approach the legislature for further clarification of insurers’ responsibilities in construction defect claims.

Suzanne Chauvin is a Senior Assistant City Attorney in the Labor, Employment, and Civil Rights section of the Houston City Attorney’s Office and a member of The Houston Lawyer editorial board.

The Texas Supreme Court Further Expands Appellate Review of New Trial Orders

By Polly Graham

I

n In re Toyota Motor Sales, U.S.A, Inc., 407 S.W.3d 746, the Texas Supreme Court held that an appellate court may conduct merits-based review on mandamus of an order

granting a new trial.1 This is the third opinion in a line of recent cases slowly expanding the scope of appellate review in this area.

A sea change began in 2009 when the Texas Supreme Court put an end to the former practice of allowing trial courts nearly unfettered discretion in grant-

ing new trials, and held instead that an order granting a new trial must be supported by “an understandable, reasonably specific explanation.” 2 Just last year, the Court clarified that the trial court’s explanation must consist of a “legally appropriate” reason for granting a new trial that “is specific enough to indicate that the trial court did not simply parrot a pro forma template, but rather derived the articulated reasons from the particular facts and circumstances of the case at hand.”3 In re Toyota Motor Sales reflects the next logical step in the trend. In this case, the trial court’s order provided a facially valid and specific explanation for granting a new trial, stating that the defendant’s counsel “brazenly and

intentionally violated” one of the trial court’s limine orders. The defendant, however, immediately sought mandamus relief, arguing that there was no evidence of any such violation. The El Paso court of appeals denied relief, concluding that there was “no question that the trial court specified the reasons for its decision” and reasoning that it could not further review the underlying merits of the trial court’s order.

The Texas Supreme Court disagreed, stating that: “[t]o deny merits-based review would mean that a trial court could set aside a verdict for reasons that are unsupported by the law or the evidence, as long as those reasons are facially valid... Transparency without accountability is meaningless.” 4 Thus, after undertaking what it described as a “cumbersome review of the multivolume trial record,” the Court held that there was no evidence that the defendant had violated the trial court’s limine ruling and ordered the trial court to withdraw its order and render judgment on the verdict.5 The Court’s decision brings Texas law in line with federal law, which “has long engaged in merits-based review of new trial orders.” 6 Polly Graham is an associate in the appellate section at Haynes and Boone, LLP and a member of The Houston Lawyer editorial board.

Endnotes 1. Haygood v. De Escabedo, 3In re Toyota Motor Sales, U.S.A, Inc., 407 S.W.3d 746 (Tex. Aug. 30, 2013).

2. In re Columbia Med. Ctr., 290 S.W.3d 204, 213 (Tex. 2009).

3. In re United Scaffolding, Inc., 377 S.W.3d 685, 688-89 (Tex. 2012).

4. In re Toyota Motor Sales, 407 S.W.3d at 758.

5. Id. at 760.

6. Id. at 759.

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41

Media Reviews

The Lawyer’s Guide to Social Networking Authored by John G. Browning Published by Aspatore Publishing, Thomson Reuters Reviewed by Al Harrison

The Houston Lawyer

I

n Lawyer’s Guide to Social Networking, John G. Browning presents a comprehensive and insightful explanation of social networking from the vantage point of a Texas attorney. While addressing the profound benefits and nuances of the fluid social networking landscape, Browning emphasizes why attorneys must be mindful of the concomitant susceptibility to drifting afoul of the Texas Rules of Disciplinary Procedure. The author subdivides the book into a logical sequence of 21 chapters. Unfortunately, there is no index available for quick reference.

The reader is introduced to the nature of social networking in Chapter 2 entitled Social Media 101. Browning covers a broad spectrum of interests encompassing representative social networking websites typified by photo-sharing via Flickr, videos via YouTube, real-time activities via Twitter, and business and professional issues via LinkedIn. As succinctly stated by the author “[i]f ‘Facebook Nation’ were indeed its own country, it would be the third most populous on Earth.”

Since Facebook dominates the online experience of the public at-large, and commonly affords an evidentiary treasure trove of contemporary activities, beliefs and conduct pertaining to potential clients, opposing parties and witnesses, the author dedicates no less than eight chapters either wholly or in significant part to Facebook. Those chapters include such titles as: “Served through Facebook”; “The Facebook Divorce”; “Foiled by Facebook”; “Who Are You Going to Believe, Me or My Facebook Page?”; “Social Networking and Personal Injury Cases”; “Social Media and Employment Law”; “Facebook, Eh? Social Networking and Canadian Law”; “Why

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November/December 2013

Can’t We Be Friends?”; “Judges and Social Networking”; and “Social Networking and Jury Selection.”

Browning wisely advises readers about the urgency of properly establishing a Facebook account and user accounts for other social networking websites by judiciously controlling the content and extent of access to the so-called user profiles. A user profile is a collection of personal information including email address, first and last name, password, gender, date of birth, country of residence, and postal code.

Also, the author warns attorneys to routinely and diligently control the nature and scope of information stored and shared via social networking websites.

For instance, he notes that to properly define and control the extent of information stored in Facebook’s database, the user is compelled to entertain more than 40 data points. These data points imply personal information including employment history, online and offline contacts, political and religious attitudes, sexual preference, cultural tastes and proclivities, and related photos. Accordingly, Browning admonishes the reader that to completely opt out of Facebook’s full disclosure, users must invoke and click-through each of about 170 options that, incredibly, implicate about 50 privacy-related buttons or icons.

Browning also admonishes attorneys to allocate sufficient time to rigorously select all user profile settings that safeguard personal and client-related information, to the extent that such vulnerable information is even disclosed to Facebook or other social media, by limiting access by others: (1) to personally identifiable information; (2) to shared information (default is universal access, i.e., access to “everyone”; and (3) by search engines such as Google, Yahoo, Bing, and Dogpile. As a sobering note to readers in Chapter 10, the author marvels at how social media typically delivers a mother lode of telltale information about the parties that might not otherwise be available to the opposing side.

In my opinion, the Lawyer’s Guide to Social Networking should be required read-

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ing for lawyers who strive to practice law at least in part on the electronic landscape and those that will inevitably engage in social networking, to avoid crossing the ethics line delineated by the Texas Rules of Disciplinary Procedure.

Al Harrison is a licensed patent attorney with an intellectual property law practice with Harrison Law Office, P.C. and a longtime member of The Houston Lawyer editorial board.

Android Apps in One Hour for Lawyers Authored by Daniel L. Siegel Published by American Bar Association Reviewed by Suzanne Chauvin

A

ndroid lovers have a new weapon in the battle to unseat iPhone as the coolest technology around. I know what you’re thinking. “Cool” is not a word we usually associate with lawyers.

But Android Apps in One Hour for Lawyers

by Daniel L. Siegel will make even the most stubborn technology skeptic ready to embrace new tools making technology available to lawyers practicing on the road, in the courtroom and on the run.

This book is an easy read and fun to explore. The language is simple, concise and very descriptive. For the technologically challenged, the book includes some very basic information, including how to buy and install applications, what the cloud is and how it works with your mobile device, and how to manage and manipulate applications. The book includes icons and colorful screen shots to walk you through installation and demonstrate how some of the applications work.

Siegal reviews several applications that meet the unique needs of lawyers. The book discusses apps for time and billing, Continued on page 45

2013 Harvest Party Underwriters The Houston Bar Association and the Houston Bar Foundation would like to thank all those who underwrote the 63rd Harvest Party. The generosity of our underwriters directly improves the lives of people in our community who could not otherwise afford or obtain access to justice. $25,000 Andrews Kurth LLP Baker Botts L.L.P. Bracewell & Giuliani LLP Fulbright & Jaworski LLP Locke Lord LLP Marathon Oil Company Vinson & Elkins LLP Williams Kherkher Hart Boundas, LLP

$3,000 Benny & Nikki Agosto HBA Oil, Gas & Mineral Law Section

$5,000 Amegy Bank BP America Inc. Beirne, Maynard & Parsons, LLP Chamberlain Hrdlicka White Williams & Aughtry ConocoPhillips Craig and Penny Glidden DLA Piper Gardere Wynne Sewell LLP Gibbs & Bruns LLP Greenberg Traurig LLP Haynes and Boone, L.L.P. HBA Family Law Section Jones Day Melanie Gray & Mark Wawro Schirrmeister Diaz-Arrastia Brem LLP Shell Oil Company Susman Godfrey L.L.P. Sutton McAughan Deaver PLLC Thompson & Knight LLP Weil, Gotshal & Manges LLP Winstead PC

$2,500 Abraham Watkins Nichols Sorrels Agosto & Friend Ahmad, Zavitsanos, Anaipakos, Alavi & Mensing P.C. Anadarko Petroleum Corporation Arnold Knobloch & Saunders, L.L.P. Baker & McKenzie LLP Blank Rome LLP Cadwalader, Wickersham & Taft LLP CenterPoint Energy, Inc. Christian, Smith & Jewell LLP Cokinos, Bosien & Young, P.C. Connelly•Baker•Wotring LLP Energy Transfer Partners L.P. EOG Resources, Inc. Fisher, Boyd, Johnson, Huguenard, L.L.P. FTI Consulting Hagans Burdine Montgomery Rustay, P.C. HBA Labor & Employment Section Hewlett-Packard Co. Hogan Lovells US LLP Hunton & Williams LLP Jackson Walker L.L.P. Legge Farrow Kimmitt McGrath & Brown, LLP Martin, Disiere, Jefferson & Wisdom, L.L.P. McDermott Will & Emery McGuire Woods LLP McKool Smith, PC Noble Energy, Inc. Pam and John Strasburger Pillsbury Winthrop Shaw Pittman LLP Plains All American Pipeline, L.P. ReedSmith LLP Rusty Hardin & Associates, P.C. Schwartz Junell Greenberg & Oathout, L.L.P. Shannon, Martin, Finkelstein & Alvarado, P.C. Skadden, Arps, Slate, Meagher & Flom LLP Strasburger & Price, LLP The Lanier Law Firm

$4,000 HBA Mergers & Acquisitions Section

$2,000 Coats Rose

$10,000 Akin Gump Strauss Hauer & Feld LLP Chevron Exxon Mobil Corporation HBA Juvenile Law Section HBA Litigation Section King & Spalding LLP KoonsFuller, P.C. LyondellBasell Industries Morgan, Lewis & Bockius LLP Sidley Austin LLP Sutherland Asbill & Brennan LLP $7,500 Baker Hostetler LLP Beck Redden LLP Winston & Strawn LLP

David Brinley HBA Federal Practice Section Kay Sim Siegmyer, Oshman & Bissinger, LLP $1,500 Brent and Christy Benoit Munsch Hardt Kopf & Harr, P.C. Neil Kelly and Dana Levy Kelly $1,000 Ajamie LLP Berg & Androphy Cadence Bank Campbell Harrison & Dagley L.L.P. David Chaumette De Leon Law Firm Dobrowski Larkin & Johnson L.L.P. Ebanks Horne Rota Moos LLP Foster Quan LLP Frank, Elmore, Lievens, Chesney & Turet, L.L.P. Frost Bank Germer Gertz, L.L.P. Godwin Lewis PC Hall, Maines & Lugrin, P.C. Hasley Scarano, L.L.P. HBA Alternative Dispute Resolution Section HBA Appellate Section HBA Collaborative Law Section HBA Construction Law Section HBA Corporate Counsel Section HBA International Law Section HBA Real Estate Section Hirsch & Westheimer, P.C. Jane and Doug Bland Jenkins & Kamin, L.L.P. Jim S. Adler & Associates, P.C. John & Denise Scofield Johnson, Trent, West & Taylor, L.L.P. Kelly, Durham & Pittard, LLP Law Office of Brent C. Perry Lighthouse Legal Copy Liskow & Lewis, A PLC Looper Reed & McGraw, P.C. MacIntyre McCulloch Stanfield & Young LLP Mark Elias MehaffyWeber, P.C. Nathan Sommers Jacobs, PC Ogden, Gibson, Broocks, Longoria & Hall, LLP

Olson & Olson LLP Phelps Dunbar LLP Porter Hedges LLP Prosperity Bank Providus Reynolds, Frizzell, Black, Doyle, Allen & Oldham LLP Roach & Newton, LLP Royston, Rayzor, Vickery & Williams, L.L.P. Schiffer Odom Hicks & Johnson PLLC Segment Wealth Management Giving Fund, LLC Shepherd, Scott, Clawater & Houston, L.L.P. Smyser Kaplan & Veselka, L.L.P. South Texas College of Law Sprott, Rigby, Newsom, Robbins, Lunceford & Bell, P.C. Strong Pipkin Bissell & Ledyard LLP Sud Law PC Tekell, Book, Allen & Morris, L.L.P. Todd Frankfort Ware, Jackson, Lee & Chambers, L.L.P. Westlake Chemical Corporation Wright & Close, L.L.P. Yetter Coleman LLP $500 Alistair Dawson Bill Kroger HBA Securities, Litigation & Arbitration Section Hon. David Fraga Houston Bar Association Auxiliary Charitable Fund, Inc. $250 Daniella Landers HBA Health Law Section Hon. Frank Rynd Jackson Lewis Kreindler & Associates $200 Laura Gibson and Bill Ogden $100 HBA Animal Law Section

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LITIGATION MARKETPLACE

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Mid-size firm in Uptown/Galleria GALLERIA AREA ST. JAMES PLACE near Post Oak. Seven offices and Attorney-size office with secretarial four Secretarial / Paralegal stawork station for sublease – AV rated tions available. Amenities include firm, Class A build out. Possibility filing space, fax, copier, kitchen, for referrals. Please send inquiries to conference rooms, internet, rehoustongallerialawfirm@gmail.com ceptionist, and covered parking. For more information, call RIVER OAKS TOWER Kirby & Nikki Peoples at 713-752-8318, Richmond 5 - Family Law Attorneys npeoples@haysmcconn.com. sharing offices has 1 office space 10’ X 11’ available for sublease. Ameni- Partner/window office with spaties include conference room, local cious, furnished secretarial station. and long distance telephone, pri- First class, professional environvate voicemail, high speed internet ment, including Internet, shredder, T2 Speed, printer, copier, fax, Lexis copier, file storage, fax, kitchen and Nexis, ProDoc, filing and pick up for conference rooms. Call Pam: Court documents, and full kitchen.

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The Houston Lawyer

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November/December 2013

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HOUSTON-GREENWAY PLAZA Class-A space available for sublease, seeking solo practitioner ESTATE PLANNING ATTORNEY. Beautifully appointed building, view of downtown, exercise gym in building, garage parking, 24 hr security guards, conference rooms, kitchenette, building access 24/7. 281-451-0298.

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OFF THE RECORD From page 38

competed. She was certain that “everyone looking at the shape and sizes of us felt we were no competition.” The Gavel Dragons ranged widely in “shape and sizes” but also in age, 17 to 72. Even team members had no expectations. They participated for the fun and to remember a late friend who had loved dragon boating. However, they were pleasantly surprised.

The Gavel Dragons won their first race!

“This Team so far has won the Gulf Coast International Municipal Award in May 2012, October 2012 and again in May 2013. They’ve also won the Houston Dragon Boat Festival Division C in May 2012,” proudly stated Judge Meg Oswald. “Not only was it a great workout, but it was fun to have that camaraderie among us.”

“I never dreamed one event would have such effect on the Courts,” said Cynthia. “Our HG Gavel Dragons are one big happy family. The creation of the HG Gavel Dragons has brought court members together as close friends outside of their work.”

In a May 2013 email to Municipal Court employees, Presiding Judge Hartle wrote: “Dear MCD Family: If you see one of the Gavel Dragon Team members, give them a gentle pat on the back ...and tell them ‘Paddles Up!” We urge our readers to do the same.

Hon. Josefina Rendón is a 1976 UH Law Center graduate. A former District Judge, she has been a Municipal Judge and MCD Family member for 26 of the last 30 years. “Too lazy to paddle with the HG Gavel Dragons,” she did the next best thing, write about them.

The author wishes to thank Judge Bob Rosenberg for sharing his photos of the Gavel Dragons.

Media Reviews From page 42

legal research and medical-related sources. The legal research apps are particularly impressive. For instance, Fastcase contains a database of federal cases and statutes; Push Legal Complete is a mobile law library with databases of rules and statutes for a number of states, including Texas; and Pocket Justice contains over six hundred U.S. Supreme Court constitutional decisions with audio from some oral arguments. The book also reviews such legal applications as DroidLaw, Law Dictionary, American Arbitration Association, and ABA Journal Mobile, providing insight on each application’s strengths and weaknesses.

In addition to applications of special interest to lawyers, the book reviews apps that are useful to anyone in the business world. For example, PrinterShare lets you print directly from your mobile device. ASTRO File Manager lets you view data stored both on the cloud and on your office network. Speech to Text and Dragon Go! are dictation software apps useful in any business environment and Siegal compares the strengths and weaknesses of each app.

Finally, the book is practical. Siegel is an attorney and consultant, who practices appellate law and consults with law firms on improving operations. For attorneys whose brains are numb after a day of reading case law and briefs, this book is a very quick read that helps you get up and running quickly and efficiently. The book provides practical tips on using mobile apps in the courtroom, which apps complement each other, apps that are good for travelers, and which apps are available at little or no cost. It also tells you how to interface between your office and your remote apps, and gives basic tips on saving battery life. Whether you are an Android user yet or not, Android Apps in One Hour for Lawyers provides ideas for making your law practice more efficient and mobile friendly.

Suzanne Chauvin is is a Senior Assistant City Attorney in the Labor, Employment, and Civil Rights section of the Houston City Attorney’s Office and serves on The Houston Lawyer editorial board. thehoustonlawyer.com

November/December 2013

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Attorney-Mediator & Arbitrator Mediated and arbitrated OVER $93 Billion in disputes since 1990.

Board Certified Civil Trial Law. AAA National Large Complex Case Panelist.

College of Commercial Arbitrators, Fellow.

Former Adjunct Professor at Pepperdine & South Texas College of Law. Martindale-Hubbell AV Rated.

Trey Bergman

Voted #1 Best Individual Mediator/Arbitrator in Houston.

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9 Greenway Plaza, Suite 3130, Houston, TX 77046 Telephone 713.977.1717 | Fax 713.977.4889 Trey@BergmanADRgroup.com | BergmanADRgroup.com