Preventive Legal Care - Relatively Simple Things Make Large Differences in Legal Costs

A commentary by Dallas Attorney Mark Nacol

During the last 37 years of general practice in a number of civil areas, I have had the opportunity to observe repetitive mistakes and decisions made by clients in regard to whether or not preventive legal care is cost-worthy.

Most prudent people do not think twice about having their teeth cleaned, becoming vaccinated for the flu or other childhood illnesses, going to their doctor if they are dizzy, having speech problems or other symptoms of stroke diagnosed or changing the oil in their automobile.

The average person clearly acknowledges the flu shot is definitely preferable to two weeks in bed. Basic dental hygiene trumps a root canal every time. A blood thinner medication is far preferable to paralysis or brain damage, and early detection of cancer or other invasive diseases, may significantly improve prognosis for recovery.

On the other hand, when it comes to the ordinary individual’s legal needs, I have noted throughout the years and continue to note a juvenile and somewhat cavalier attitude. The result is denial and refusal to consider relatively small fees required to bring preventive legal care into play.

Depending on the size and nature of a man, woman or a couple’s estate, probate planning in the form of wills, durable powers of attorney, medical directives, medical authorizations, medical powers of attorney, testamentary and/or intervivos (living) trusts can avoid future attorney’s fees from 50 to 100 times the amount required for preventive care. Probate and/or litigation without a will in a large estate, disability, dementia, Alzheimer disease or other medical issues requiring guardianship and/or extraordinary legal procedures vastly exceed the basic costs of preventive care. The cost of fixing the legal problem after the event is extraordinary versus the simple matter of preventive legal care in the first place. Fees ranging from $500 to $5,000, depending on the complexity of the estate or matter, at first blush might appear large but may frequently be increased by 2 to 3 zeros in complicated, complex litigation that can last for years.

Marital prenuptial agreements are emotionally delicate, but may be a useful and significant tool to provide creditor protection throughout a marriage and reduce the cost of dissolving a marriage, an unfortunate circumstance, by thousands and thousands of dollars.

A properly prepared and executed contract for the purchase and sale of land or for the purchase and sale of a business when accomplished before the transaction is essential in fixing the rights of the parties, establishing enforceability of their promises and the cost necessary to force compliance with those promises. Time after time, I find a client who comes into my office and looks at me with dog eyes and says, “Can you help me in this business transaction? I’ve already signed the contract.” My response, of course, is “Yes, it is my pleasure. But, it is going to be far more expensive now than if you had simply prophylactically entered into an enforceable agreement prior to the conduct you allege is fraudulent or the subject of a breach at this time.”

The examples above may be extended into almost every area of the law. Why in the world would anyone want to market an invention, a well known mark of their business or trade, a manuscript or other written document without first having protected those items through trademarks, patents, copyrights or, at the very least, non-disclosure agreements? A common complaint echoed throughout the years has been the significant cost of the judicial system and the financial burden of enforcing ones right in the courts of law of the state or federal government. With a bit of foresight and ingenuity and the help of an ethical, competent attorney, and the willingness to spend a smaller sum of money, many of the problems, disappointments and disenfranchisements with the judicial system may be bypassed altogether.

In closing, I am reminded of the classical advertisement by Mr. Goodwrench. “Pay me now or pay me later.” Preventative maintenance of the most important legal aspects of your life are as important as preventive maintenance of your car. Have you priced a new engine versus a can of oil lately?

Forming a Corporation in Texas

A corporation is a legal entity that is granted a charter recognizing it as a separate legal entity having its own privileges, and liabilities distinct from those of its shareholders. When it is formed it becomes a separate entity from the people who own the stock of the corporation. For this reason, a corporation’s actions are made by the corporation and not by an individual person. This legal distinction is what separates the liability of the Texas corporation from the individual and is a major consideration in deciding to form a corporation.

Anyone can form a corporation in Texas. A corporation can form another corporation. Once the corporation is formed, the entity formed is responsible for all actions done in the corporate name. The new entity is required to file state and federal taxes and acquire any licenses to do business in the name of the corporation. The corporation can purchase insurance, own real estate and cars and other assets or personal property as if were a natural person. It is responsible for actions both good and bad done in its name. If a corporation fails, shareholders normally only stand to lose their investment, and employees will lose their jobs, but neither will be further liable for debts that remain owing to the corporation’s creditors.

Corporations can exercise human rights against real individuals and the state, and they may be responsible for human rights violations. There are five core characteristics of a business corporation:

•Legal personality
•Limited liability
•Transferable shares
•Centralized management under a board structure
•Shared ownership by contributors of capital

Generally, the corporation files articles of incorporation with the government, laying out the general nature of the corporation, the amount of stock it is authorized to issue, and the names and addresses of directors. Once the articles are approved, the corporation’s directors meet to create bylaws that govern the internal functions of the corporation, such as meeting the procedures and officer positions.

•Some of the advantages of a corporation are as follows:

•Shareholders have limited liability for the corporation’s debts or judgments against the corporation.

•Generally, shareholders can only be held accountable for their investment in stock of the company.

•A Texas corporation may deduct the cost of benefits it provides to officers and employees.

•A corporation pays 15% federal income tax on taxable income up to $50,000; 25% tax on income from $50,001 - $75,000; 34% tax on income from $57,001 - $100,000; 39% tax on income from $100,001 - $335,000; and 34$ tax on income over $335,001

There are some disadvantages to a corporation. The process of incorporating a business in Texas may require more time and money than other forms of organizations and the corporation may be monitored by federal, state and some local agencies and as a result require have more paperwork to properly comply with regulations. Incorporating may also result in higher overall taxes in some circumstances.

If you are in the Dallas, Fort Worth area and need help with forming a Texas coporation, contact The Nacol Law Firm, P.C.

Debt Recovery Concerns

Awarding credit is a fundamental facet of American finance and worldwide business. It helps nascent companies get off the ground by providing vital capital, which in turn allows the economy to grow and business opportunities to be created. There is, however, another side to credit funding. The very nature of an individual or a company creating debt to obtain needed capital creates short and long term problems. While companies hope that their business plan is solid and promising enough to achieve cash flow and growth while allowing for repayment of their debts, the fact is that sometimes credit-driven investments do not create projected returns, making for a potentially unpleasant situation for borrowers and lenders alike. When debtors fail to repay debt as promised, more often than not the creditor will have multiple remedies under state and federal law.

During a prolonged economic recession such as the one we are now experiencing, there is a noted increase in both the frequency and promptness of debt collection. As lending companies are themselves not immune to the current recession, timely recovery of past due sums is becoming an increasingly critical consideration. Following a default, lenders should pursue reimbursement within whatever timeframe is appropriate under then relevant circumstances. Regardless of whether or not your decision comes at an inconvenient time for the indebted party, the fact remains that a lender has rights that permit prompt recovery to effectively carry out their business.

In order to properly ensure that delinquent sums due are eventually received, two useful allies are reputable debt collectors/debt collection agencies and attorneys with experience in credit/debt resolution, bankruptcy, or related areas. The two will often work in collaboration, as legal enforcement may be necessary to bring about prompt settlement. It is recommended that the debt collector you retain be local to the area where your debtor is located, as often times localized nuances of business procedures, federal, state, and city statutes, etc. can limit the effectiveness of collectors based elsewhere who are likely to be less familiar with these statutory obligations. Your attorney should be licensed in the state of the debtor.

Significantly, one must address missed payments promptly, and give careful consideration to elevating your collection efforts by turning to legal and financial professionals. Many of the rules and laws at work in the field of credit lending are highly complex, greatly increasing the possibility of errors without third party assistance. Following default, the longer you wait to take action, the more complicated the collection process can become while lowering the prognosis for successful recovery. While not all delinquent payments are the result of intentional nonpayment, the majority of them are, calling for prompt action to avoid “stale claims.” Generally, if you feel as though legal action is the next necessary step, this is very likely the case.

By Alexander Newgard, Administrative Clerk, The Nacol Law Firm PC

Women at Risk: The Hazards of a Bad Relationship

Abusive men, and women (physical or mental), are all about control and frequently evolve from abusive homes themselves. Police desire to help abused women, but often even after a complaint has been filed, women will not pursue the charges out of fear. Feeling helpless, they are often terrified, brain-washed and really believe that they have nowhere to go. It is not uncommon for an abuser to be very charismatic and after beating his victim return home the following day with flowers showing great affection to his victim. Unfortunately, the victim tends to believe the transparent words “I’ll never do it again!”

One of the most frustrating things for family and friends outside a battering relationship is trying to understand why the abused person doesn’t just leave. It is important to remember that extreme emotional abuse is always present in domestic violence situations. Violence takes place in many forms, is unpredictable and can happen all of the time or just once in a while. Violence is criminal including physical and sexual assault. It is paramount to remember that physical violence, even among family members, is wrong and against the law.

Some of the reasons partners stay in domestic violence situations are:

1. Economic dependence.
2. Fear of greater physical danger or danger for children.
3. Fear of being hunted down and suffering worse beatings.
4. Survival. Fear that the abuser will kill.
5. Fear of emotional damage to children.
6. Fear of losing custody of children.
7. Lack of alternative housing.
8. Lack of job skills.
9. Social isolation resulting in lack of support from family and friends.
10. Social isolation resulting in lack of information about her alternatives and support systems.
11. Lack of understanding from family and friends, police, ministers.
12. Negative response from community, police, courts, social workers.
13. Fear of involvement in the court process.
14. Fear of the unknown, chronic anxiety, and/or depression.
15. Acceptable violence. Living with constant abuse numbs the victim so that they are unable to recognize that they are involved in a set pattern.
16. Ties to the community. The children would have to leave their school, and family would have to leave friends and neighbors.
17. Ties to home and belongings.
18. Family pressure.
19. Denial.
20. Loyalty.
21. Love. Often an abuser is quite loveable and loyal when he is not being abusive.
22. Shame and humiliation. “I don’t want anyone else to know.”
23. Guilt. They believe the abuse is caused by some inadequacy of their own.
24. Demolished self-esteem.
25. Lack of emotional support.

The following is a bill of rights for women in abusive relationships:

1. I have the right to ask for what I want.
2. I have the right to say no to requests or demands I can’t meet.
3. I have the right to express all of my feelings, positive or negative.
4. I have the right to change my mind.
5. I have the right to make mistakes and not have to be perfect.
6. I have the right to follow my own values and standards.
7. I have the right to say no to anything when I feel I am not ready, it is unsafe or it violates my values.
8. I have the right to determine my own priorities.
9. I have the right not to be responsible for others’ behavior, actions, feelings or problems.
10. I have the right to expect honesty from others.
11. I have the right to be angry at someone I love.
12. I have the right to be uniquely myself.
13. I have the right to feel scared and say “I’m afraid.”
14. I have the right to say “I don’t know.”
15. I have the right not to give excuses or reasons for my behavior.
16. I have the right to make decisions based on my feelings.
17. I have the right to my own needs for personal space and time.
18. I have the right to be playful and frivolous.
19. I have the right to be healthier than those around me.
20. I have the right to make friends.
21. I have the right to change and grow.
22. I have the right to be treated with dignity and respect.
23. I have the right to be happy.

Anyone can be a victim of domestic violence. Although both men and women can be abused, most victims are women. Children in homes where there is domestic violence are more likely to be abused or neglected. Even if the children are not physically harmed, they are likely to have serious emotional and behavioral problems and scars.

Abusers try to control their victim’s lives. When abusers feel a loss of control – like when the abused person leaves them – the abuse may get worse. If you are in an abusive situation, take special precautions when you leave. Develop a safety plan.

The Uniform Interstate Family Support Act

If a child and one of the child’s parents live in Texas, a child support order or paternity determination may be established without the assistance of another state. If the parents have already had sufficient contact with Texas, the Attorney General of Texas may be able to enter an order even if the parents do not currently reside here. If another state’s assistance is needed the Uniform Interstate Family Support Act enables Texas and other states to cooperate to establish a child support order.

The Uniform Interstate Family Support Act permits only one active support order for a case at a time. This cuts down on delays and confusion. If several orders exist, the Uniform Interstate Family Support Act has rules to determine which order should be followed (the “Controlling Order”).

Orders may be registered in different states for enforcement and modification purposes. Orders registered from another state are enforced as an order issued by the responding state.

States now have more power to collect payments from child support obligors who live in other states. The Uniform Interstate Family Support Act allows states to enforce their orders without the assistance of the state where the obligor lives. In many cases, a withholding order can be sent directly to an out-of-state non-custodial parent’s employer, requiring that child support be deducted from the parent’s wages.

The order can be registered by the other (responding) state for enforcement, but it cannot be changed by that state. The responding state has the authority to pursue collection using enforcement hearings, license suspension and incarceration of the delinquent non-custodial parent if necessary.

Changes in circumstances, such as job promotions, prolonged unemployment or disability, may affect the noncustodial parent’s payment status in the years following the establishment of the support order. Such changes may justify a modification in the support order.

The Uniform Interstate Family Support Act sets the ground rules for modification based on the state issuing the order, the states of residence of the parents and children, and the controlling order. If either of the parents or the child still lives in the state that issued the controlling order, any change in the support amount must occur in that state.

If all parties involved have left the state that issued the controlling order, that state may not be able to change the support amount. To change support, the order must be registered for modification in the state of residence of the parent who is not seeking the modification. If more than one state has issued an order, and none of the parties lives in those states, none of the orders is controlling.

All of the orders should be registered in the state that has jurisdiction over both parties. That state will calculate the amount of support to be paid and will issue a new controlling order.

The Uniform Interstate Family Support Act also allows both parents to agree in writing that a state where one parent resides may modify the order and take control of the case.

Once a state properly modifies another state’s order, the new amount of support is the amount to be collected by all states.

BEWARE: Social Networking Sites and the Law

Social networking sites originated in the mid-1990’s, but only recently began to expand across the web. Two of the largest social networking sites are MySpace (with over 118 million members) and Facebook (with over 120 million members).

The concept of social networking is easy enough. You begin by filling out a profile, then you look for people you know. When you find someone, you click to add him or her as a friend. Once this is done, you can see who your friends know, who your friends’ friends know, and so on. Social networking is a wonderful avenue for connecting with persons across the globe, but must be done with caution. Keep in mind, pictures, comments, and other information placed on your site may be accessed in any number of ways and may upon proper predicate be used against you in litigation.

Family law practitioners can uncover a wealth of information using social networking sites. Many firms are now making it routine to perform MySpace, Facebook and Match.com searches to see if they can obtain useful information on the opposing party, witnesses, or experts. Such diligence has paid off in some cases. In one case in particular, pictures were discovered of a wife’s sexually explicit boasts on her boyfriend’s MySpace page. The evidence obtained assisted lawyers in securing child custody for the husband. In another case, an attorney was able to undermine an opposing spouse’s credibility when she confronted him with his MySpace page describing him as “single and looking.” While yet another case was won because a husband presented himself as “divorced” and gave a long description of the type of woman he wanted to meet. Information obtained from these sites can be very useful when counsel is trying to provide proof of a spouse’s infidelity. Therefore, is important to carefully and periodically monitor what you place on your social networking site.

Social network evidence may in most cases also be used in child custody cases. Pictures of a parent in various compromising situations while a child or children are in the parent’s custody can present a major problem in a custody lawsuit. Partying, drinking, and negative statements about children used on social networking sites can be offered as evidence in Court. Parents should use caution when placing pictures and other information on their social networking site.

Keep in mind that your employer can access your social networking site. In one case, a partner in one of Dallas’s larger law firms used MySpace and Facebook to uncover details of a client’s former employee and her plans to circumvent a non-compete agreement.

Social networking has also been used in sexual harassment cases. In Houston, Texas, a plaintiff was portrayed as a modest, innocent “wannabe nun.” The opposing counsel found a MySpace page that painted a very different picture of a plaintiff, with numerous photos of her in scanty or provocative attire and engaged in suggestive horseplay at bars and with friends.

Evidence obtained from social networking sites has been used in personal injury and in criminal cases. Attorneys are running cyber checks on jury pools. Many firms are running cyber searches on new clients, witnesses, opposing parties and experts.

In the ever growing and expanding world of cyberspace, it is becoming increasingly important that you inform your counsel of any and all internet usage, sites and blogs which you have joined or participated in so that they may represent you and be properly prepared.

Litigation in Texas

The first step to begin a lawsuit in Texas is to finding a lawyer who is knowledgeable and experienced in the area of your legal concern.

In Texas, the filing of an original petition or a complaint officially starts a lawsuit. The complaint will state the facts of the case, spell out the legal issues as they relate to the facts and request the Court grant relief. The complaint is then filed with the court and served on the Defendant who will have a set period of time to respond.

After the complaint has been filed and the Defendant has entered his answer, the discovery phase of the lawsuit begins. During the discovery process, the counsel for each side will gather as much evidence as is reasonable to present their case to the judge or jury. Such discovery includes but is not limited to depositions (sworn testimony taken out of court); disclosure of witnesses, experts and other necessary information; interrogatories (written questions); requests for production of documents; requests for admissions; requests for business records, and electronically stored information (ESI), etc. Discovery may last from a few months to a year, and in some cases several years. Discovery rules can be very liberal, allowing a great deal of evidence to be revealed.

In Texas most courts require the parties to mediate a case before allowing it to go to trial. Mediation can be a useful process as it allows both sides to state their case to a neutral party who has experience in the issues being mediated and who will attempt to assist in the resolution of the case before the parties are forced to incur the expense of a trial. In many cases, the mediation process is a good gauge for a possible trial outcome. At a minimum, it allows each side to measure the strengths and weaknesses of the case.

The pre-trial conference takes place approximately one week prior to the case going to trial and presents yet another opportunity for counsel to settle the case or review the issues. During the pre-trial conference the counsel speak informally with the judge and agree to the undisputed issues. They share the evidence they intend to present during trial and the witnesses they plan to call to testify. The parties, along with the judge, are then able to plan the course of the trial.

After completion of the discovery, mediation and the pre-trial conference, should the parties be unable to settle the case, it will then be placed on the Court’s trial docket and proceeds to trial.

The trial most commonly proceeds in the following manner: Plaintiff’s attorney makes an opening statement detailing the facts of the case followed by the Defendant’s attorney detailing the defenses; Plaintiff’s witnesses and evidence are introduced, examined and cross-examined; Defendant’s witnesses and evidence are introduced, examined and cross-examined; Plaintiff and Defendant are allowed to introduce rebuttal evidence; and, finally, Plaintiff presents their closing argument, followed by the Defendant’s closing argument.

When a jury is hearing the case, a judge will instruct the jury as to the law that is to be applied to the issues. The jury will then retire to the jury room until a verdict is reached. Should the jury end in a deadlock, the judge will normally send the jury back to deliberate until a verdict is reached. If a verdict cannot be reached, the judge must declare a mistrial. If a verdict is returned, the judge will generally enter a judgment on the verdict.

The Nacol Law Firm P.C.
Law office of attorney Mark Nacol
Serving the Dallas / Fort Worth Metroplex for over 30 years
Tel: 972-690-3333