Boomer Prenups – Sign Now or Forever Hold Your Peace!

Baby Boomers are increasingly deciding to enter into prenuptial agreements prior to marriage to protect and manage their assets should they part ways through divorce.

What is a Prenuptial Agreement? It is a legal document that establishes in advance how property, assets acquired or received by gift during a marriage and family heirlooms passed from family members to one of the parties will be owned or divided in the event the couple should part ways.

Prenuptial Agreements have become very popular with Baby Boomers (born between 1946-1964) since they have on the average accumulated more money and assets and can afford to pay for adequate protection. Since 2006, 80% of Family Law Attorneys have seen a marked increase in couples who sign prenups, according to a survey sponsored by the Matrimonial Lawyers Group.

In the current financial crisis, with a 31% drop in home values and a 53% drop in stock portfolios, Boomers have been hit the hardest, which has accelerated the trend. Boomers have therefore become more cautious in holding on to their remaining current assets.  Boomers are also blending homes and corresponding obligations. Prenups are becoming the Estate Planning Tool of the future!

Given Boomer age ranges, they are more likely to have been married and divorced multiple times.  4 out of 10 Boomers have experienced a divorce and by their 50th birthday, 27% have moved on to a second or third marriage.

So When Should Boomer Couples Consider Having A Prenup?

1. When significant assets are involved such as a home & property, retirement funds, stocks and bonds, or liquid assets.
2. When there are children of a previous marriage. The children’s interest, past and future, need protection since most states by law give the surviving spouse up to half of the estate.
3. When one spouse owns all or part of a business.
4. When one spouse is much wealthier than the other spouse.
5. When one spouse is much older than the other spouse.
6. When one spouse is supporting the other while he or she attain an educational degree.
7. When there is an inheritance involved.

When both spouses feel that the possibility of a divorce and expenses related to it are a bad idea and wish for a premarital binding understanding, what should they do?

1. Hire a qualified lawyer to prepare a fair and binding agreement according to their wishes and needs.
2. Make full disclosure of all property, financial accounts, debts, and assets involved.
3. Comply with requisite state laws.

If one acknowledges that nearly half of all marriages end in divorce, a prenuptial agreement can avoid a number of unnecessary expenses, reduce attorney fees, and avoid state mandated arbitrary divisions.

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Foreclosures in Texas – Can I Save My Home?

Amidst the Government’s halt on foreclosures, Bank of America has stopped seizing foreclosed homes in all 50 states, but is continuing to sell homes that have already been foreclosed on and is still processing new foreclosures. 

Outside the major banks and even in states that do require a judge to look over the bank’s shoulder, foreclosures are going forward at a head-spinning pace.  The nation’s regrettable mortgage crisis continues.  One million residences have fallen into foreclosure since 2006 and an additional 5.9 million are expected over the next four years.  Lenders and investors will have to acknowledge huge losses and try to figure out how to keep borrowers making at least some monthly payments. 

However, when the housing disaster ends, the lenders’ contention that they have done as much as possible to limit foreclosures and follow appropriate laws in doing so is hollow at best.  The industry simply has not stepped up to address the volume of the problem.  And as the crisis moves forward, more people are falling through the cracks.

For lenders and loan servicers, civil lawsuits claiming deceptive sales practices or violations of consumer protection laws are becoming more prevalent as foreclosures grow in numbers.  The Mortgage Electronic Registration System, which was created to handle mortgage transfers between member banks, is facing its own legal problems.  A lawsuit filed on Sept. 28 in federal court on behalf of Kentucky homeowners claims that MERS was part of a conspiracy to create false promissory notes, affidavits, and mortgage assignments to be used in mortgage foreclosures.  Similar class action suits have been filed in Florida and New York. 

Title insurers will also be in court bringing and defending lawsuits.  The insurers will be going after banks or whoever has assured them there was a clear title.  The costs for title insurers to defend customers and reimburse for lost properties rose 14 percent, to $480.5 million in 2010’s first half. 

Persons buying homes in foreclosure are facing their own worries as paperwork errors raise question about the validity of the titles needed to prove ownership.  Defective documentation has created millions of blotched titles that will plague the nation for the next decade. 

Meanwhile, as public outrage continues to mount, many homeowners are reclaiming their homes through the Courts.

In general, Judges are unlikely to look favorably on a bank that claims paperwork flaws do not matter because the borrower was in default on the loan.  There must be some integrity in the foreclosure process and the conduct of lenders pursuing their right under loan documents.

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By All Means – Stop the Foreclosures (Part II)

Being forced to move from one’s home because one can no longer afford to make the payments is a problem devastating thousands of families throughout the United States in today’s tough economy.  Borrowers whose equity has evaporated in the struggling economy have little or no excess funds to use to save their homes.  Mortgagees have turned to the banks for assistance with home loan modifications and refinances as an alternative to the unavoidable humiliation and financial disaster resulting in a foreclosure, making it difficult – if not impossible – for them to maintain or acquire a new home mortgage for years after. 

How bad is it?  RealtyTrac, the online foreclosure listing service, reports that during the three summer months, the number of default notices, scheduled auctions of foreclosed homes and bank repossessions climbed to 930,437, up by nearly 4 percent from the previous quarter. During this period, one in every 139 houses in the United States received a foreclosure filing.  Foreclosures in the United States grew 21% in 2009.  At this time, there is no set number for 2010; however, one can bet it will be a daunting figure.

Foreclosures involve documents that must be properly submitted before the actual foreclosure can proceed legally. Homeowners, lawyers and analysts have been citing problems with foreclosure documentation for the last few years, but it appears to have reached such intensity recently that banks are beginning to re-examine whether the foreclosure papers are being prepared properly and whether homeowners are receiving proper statutory notice prior to foreclosures.

Today it is not uncommon for the original note and deed of trust signed by the parties to be sold to a mortgage servicer who does not maintain the original signed documents on-site.  A deed of trust contains specific foreclosure language and procedures that must be followed in the event of a default.  The servicer therefore has no clue as to what notices may exist in the note and deed of trust.

One of the leading culprits of the foreclosure crisis is a lack of communication within the banks themselves.  While the loan modification department begins working with mortgagees to refinance and/or modify their existing loan, the delinquent loan is forwarded to the foreclosure department to initiate foreclosure proceedings.  In some cases the home mortgagees are told to stop making payments so their loan will become “toxic.”  They are led to believe that this will assist with the modification being pushed through.  Unfortunately, by the time these families find out that they do not qualify for the loan modification, the home is already set on the foreclosure block or sold without proper notice to the homeowner.

Lawyers are discovering documents signed by Lender employees who say they have not verified crucial information such as the amounts owed by homeowners. Other problems involve questionable legal notarization of documents, in which, for example, the notarizations predate the actual preparation of documents — suggesting that signatures were never actually reviewed by a notary.  Affidavits are placed on foreclosure documents that swear to the accuracy of the foreclosure proceeding even though the procedures stated have not been followed.  Frequently the “affiant” has no personal knowledge when the affidavits are signed.

Other problems occur when notarizations take place so far from where the documents were signed that it was highly unlikely that the notaries witnessed the signings, as the law requires.

On still other important documents, a single official’s name is signed in such radically different ways that some appear to be forgeries. Additional problems have emerged when multiple banks have all argued that they have the right to foreclose on the same property, a result of a murky trail of documentation and ownership.

The sad shame of it all is that the industry that helped create the home mortgage crisis, is now feeding the crisis through bad business practices.  Many believe the foreclosure crisis is having a ripple effect, a drop in city revenues, a spike in crime, more homeless and vacant properties.  Cities are cutting revenues.

If you have received notice of foreclosure or you believe that your home has been improperly foreclosed on, contact counsel immediately.  It is far easier, more effective and less costly to stop a foreclosure from taking place before the fact than it is to reverse a foreclosure after the fact.

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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?

Supervised Visitation in Texas – Part 1

Former spouses often use informal visitation arrangements as an opportunity to assault, harass, stalk, and emotional abuse their children and former partners. In addition, some parents will use their children as a means to hurt the other parent by denying access to the child(ren) even though such access has been ordered by the court, i.e. failing to be at home during scheduled visitation periods, failing to bring the child(ren) to a scheduled location for the other parent to exercise their court ordered visitation, faking illness, etc.

Supervised visitation takes place between the non-custodial parent and his or her child(ren) in the presence of a third party who observes the visit to ensure the child’s physical and emotional safety. Though sometimes reasonably and successfully ordered, visits voluntarily supervised by friends and family in their homes can be fraught with danger for the child and parent, as well as the monitor, especially in cases of domestic violence. Family members may trust the parent whose visits are being supervised and therefore may not take proper or sufficient measures to assure the child(ren) are watched or monitored at all times during the visit.

Consequently, when supervision is indicated, possession / visitation supervised by a neutral third party with the capacity to enforce effective safety measures is normally ordered and enforced by the courts. The expenses of such supervision are often excessive and may in themselves create a detriment to possession by a parent. Such agencies may also provide reports and recommendations to the court based on the success or failure of the supervised visits. Such recommendations assist the courts in making informed decisions regarding supervision and whether continued supervision in the best interest of the child(ren).

If supervised visitation is requested, some type of compelling reason and evidence, based on the circumstances surrounding the child(ren) must normally be established. Such evidence may include denial of access, drug addiction, mental or physical abuse, neglect, or severe mental illness of a parent. The following is a potential list of acts and/or circumstances that may be considered contrary to a child’s best interest.

• Violence or physical endangerment – A noncustodial parent may be denied visitation rights if the parent has abused the child or threatened physical violence.
• Emotional harm – Where sufficient proof is offered of potential emotional harm or that standard visitation has detrimentally affected a child’s welfare, supervised visitation may be ordered.
• Child’s wishes – A court may consider the child’s wishes as to visitation. The weight given to a child’s preference is dependent on the child’s age, emotional stability, maturity and motives.
• Abduction – There must be a showing that there is a strong imminent probability of abduction to limit visitation on this basis.
• Substance abuse – A parent who abuses drugs or alcohol may be ordered to supervised visitation restrictions if the conduct endangers the child or if the parent uses abusive language and/or mistreats the child.
• Mental illness –Mental incapacity may be a reason for supervised visitation only if it is determined by the court that there is a reasonable potential for harm to the child due to such mental illness.
• Sexual behavior – Courts rarely deny visitation solely on the basis of a non-marital heterosexual relationship. Courts will, however, cancel overnight visitation by a child with a parent because of the parent’s cohabitation on a showing of an adverse and material negative impact on the child.
• Incarceration – Visitations due to incarceration may be suspended only on a showing that such visits are detrimental to the child.

To have more of your questions answered on supervised visitation in Texas, or for answers to any other Texas child custody concerns you may have, call Dallas Divorce attorney Mark Nacol of the Nacol Law Firm P.C.