The Traub Law Office NewsWire

An Overview of the Telemarketing Sales Rule

Wed, 15 Dec 2004 00:00:00 GMT

The Telemarketing and Consumer Fraud and Abuse Prevention Act (the Act) became Federal law in 1994. It is intended to combat telemarketing fraud by giving law enforcement agencies new tools for fighting fraud; give consumers added privacy protections and defenses against unscrupulous telemarketers; and to provide guidance to consumers in distinguishing fraudulent from legitimate telemarketing.

In 1995, the Federal Trade Commission (FTC) adopted the Telemarketing Sales Rule (TSR) in accordance with the Act. In 2003 the TSR was amended to reflect the provisions of the National Do Not Call Registry and regulate access to this list. In addition, the amended TSR reflects provisions of the USA PATRIOT Act regarding charitable contributions.

Entities That Must Comply with the TSR

The amended TSR regulates "telemarketing," which is defined as "a plan, program or campaign to induce the purchase of goods or services, or charitable contributions, involving more than one interstate telephone call." Portions of the TSR may also apply to persons or companies that provide "substantial assistance" to the sellers and telemarketers.

Exemptions from the Amended TSR

The following entities are not subject to the FTC's jurisdiction, and are not covered by the TSR:

Banks, federal credit unions, and federal savings and loans.
Common carriers, e.g., long-distance telephone companies and airlines, when they are engaging in common carrier activities.
Non-profit organizations.
Insurance companies regulated by state law.

Companies or individuals that contract with these exempt entities to provide telemarketing, however, must comply with the TSR. Types of calls that may be exempt from the amended TSR include:

Some calls made in response to a catalog, general media, or direct mail advertising.
900-number calls, which are on a "pay-per-call" basis.
Unsolicited calls to "telemarketers" from consumers.
Calls that are part of transactions involving a face-to-face sales presentation.
Calls relating to the sale of franchises or certain business opportunities.
Business-to-business calls not involving non-durable office or cleaning supplies.

Provisions of the Amended TSR

Key provisions and directives to telemarketers in the amended TSR include:

Required disclosure of "material information" that would affect and be necessary for an informed purchasing decision. Examples include: identity of the seller; that the purpose is to sell goods or services; the nature of the offered goods or services; in the case of a prize promotion, that no purchase is necessary to participate or win; cost and quantity of goods; and material restrictions, limitations, or conditions on purchase.
Prohibition on any false or misleading statement to induce a consumer to pay for goods or services, including misrepresentations about "material information."
Setting payment restrictions for the sale of certain goods and services and a prohibition on unauthorized billing.
A prohibition on specific "abusive" practices, such as: repeated or continuous calls to annoy, abuse, or harass; the use of intimidation, threats, harassment, and profane language; calls after a consumer requests no more calls or is on the National Do Not Call registry; calls to a residence before 8:00 a.m. or after 9:00 p.m.; and payment restrictions for the sale of some goods and services. Also, under the amended TSR, telemarketers must transmit their phone numbers for purposes of "caller I.D." and, when made available by the telemarketer's telephone company, provide their name.
A requirement that certain business records be kept by telemarketers for at least two years, for example: advertising and promotional materials; information about prize recipients; sales records; employee records; and verifiable authorizations for "demand drafts" (allowing payment directly from a consumer's bank account).

Enforcement of the Rule

The FTC, state attorney generals (or similarly authorized state officials), and private persons may each bring civil actions in federal district courts to enforce the TSR. Private persons may only bring such an action, however, if they have suffered $50,000 or more in actual damages. Written notice of suits by private citizens and/or states must be given to the FTC immediately upon filing the action.

Violators of the amended TSR are subject to civil penalties of up to $11,000 per violation. In addition, violators may be subject to nationwide injunctions prohibiting certain conduct and possible redress to consumers.

Employment Agreements and the Federal Arbitration Act

Wed, 15 Dec 2004 00:00:00 GMT

First enacted in 1925, the Federal Arbitration Act (FAA) was created as an alternative to the high costs and delays of litigation. Up until that time, states were permitted to require disputants to litigate despite the existence of a signed agreement to arbitrate. The introduction of the FAA, however, preempted such laws and implemented a policy that encouraged arbitration.

Scope of Application in Agreements "Involving Commerce"

The FAA is comprised of three chapters. Chapter 1 addresses the enforceability of agreements and jurisdictional matters while Chapters 2 and 3, both enacted years after chapter one, contain provisions addressing international arbitration. Chapter 1 indicates that its text specifically applies to "written [provisions] in any maritime transaction or a contract evidencing a transaction involving commerce..." However, the interpretation and application of "involving commerce" within the FAA's context has been litigated repeatedly.

During the 90's, the Supreme Court handed down numerous opinions addressing this issue. One of the common threads of many of these decisions was the premise that Congress intended "involving commerce" "to signal the broadest permissible exercise of Congress' Commerce Clause power." More recently, in Citizens Bank v. Alafabco (2003), the Court provided guidance regarding the application of "involving commerce" to commercial loan transactions.

Application of "Involving Commerce" to Commercial Loans

Citizens Bank involved a strained relationship between an Alabama construction company, Alafabco and a lender, Citizens Bank. Beginning in 1986, Citizens Bank periodically supplied Alafabco the necessary capital to fund construction projects. However, in 1998, the relationship suffered when Citizens Bank allegedly encouraged Alafabco to bid on a large construction project but then refused to provide the necessary capital in support of the bid. Consequently, Alafabco suffered significant financial difficulties and entered into two debt restructuring agreements with Citizens Bank. Both agreements included a provision requiring the parties to submit disputes to arbitration.

Several months following the signing of the debt restructuring agreements, Alafabco filed suit alleging, among numerous causes of action, that Citizens Bank had negligently caused Alafabco to incur "massive debt." In response to Alafabco's lawsuit, Citizens Bank successfully moved to compel arbitration. However, on appeal to the Alabama Supreme Court, the court reversed and found that there "was an insufficient nexus with interstate commerce to establish FAA coverage of the parties' dispute." In arriving at its conclusion, the Court noted there was no showing that "any portion of the restructured debt was actually attributable to interstate transactions." Further, there was no showing that the "funds comprising that debt originated out-of-state" or that "the restructured debt was inseparable from any out-of-state projects."

U.S. Supreme Court Decision

On appeal, the U.S. Supreme Court reversed and held that the commercial loan transactions at issue involve commerce since the transactions were related to numerous inter-state commerce actions. Facts considered by the Court included the following:

The loans that were renegotiated were for Alafabco's continued business throughout the southeastern United States. The loans given to Alafabco "had been used in part to finance large construction projects in North Carolina, Tennessee, and Alabama."
Alafabco secured its restructured debt with all of its business assets. This included goods which were comprised of "out-of-state parts and raw materials." The Court reasoned that if "the Commerce Clause gives Congress the power to regulate local business establishments purchasing substantial quantities of goods that have moved in interstate commerce...it necessarily reaches substantial commercial loan transactions secured by such goods."
Commercial lending has a broad and significant impact on the national economy and is subject to the regulation of the Commerce Clause.

Thus, according to the Court, such transactions were sufficiently related to interstate commerce to come within the purview of the Constitution's commerce clause.

Vehicle Accidents and Corporate Liability

Wed, 22 Dec 2004 10:44:19 GMT

Is a corporation protected from liability when someone attempts to hold it liable for damages resulting from a vehicle accident caused by a corporate employee? Can a corporation be held liable?

Circumstances Vary
A corporation may be liable for the negligent acts of its employees under certain circumstances. For example, the employee must be acting within the scope of employment, such as delivering goods on behalf of the corporation.

However, if the employee was driving the company vehicle home from a bar after work and was involved in a collision, the corporation may not be liable (especially if the employee was not permitted to drive the company vehicle after work hours).

Insolvent Corporations
Let's say you are injured in an employee-caused accident and the corporation is insolvent with no assets or insurance. Can you seek compensation from the corporation's shareholders? Usually not.

However, liability may be imposed upon the shareholders if you can prove that the corporation is merely a shell. In this instance, shareholders usually use the corporation's assets for personal reasons, or the corporation has inadequate capital.

Get the Facts
When you are involved in a traffic collision, it is important to find out if the other driver is working at the time of the accident, and whether the vehicle is employer-owned.

If the employer is a corporation, the corporation may be liable for your injuries if the employee was acting within the scope of employment when the accident occurred.

Workers Compensation Insurance Carrier Selection

Wed, 22 Dec 2004 12:24:05 GMT

When deciding which insurance carrier is right for your business and its Workers Compensation coverage, keep in mind that there is no federal requirement for the amount of workers compensation insurance an employer must carry. Instead, each state mandates the amount, and therefore, the marketplace for Workers Compensation insurance varies from state to state.

State Agencies
In some states, such as Ohio, North Dakota, Washington, West Virginia, and Wyoming, employers are required to purchase coverage through a state agency. These states provide only Workers Compensation coverage - they do not provide employer liability coverage, which the employer must purchase separately through a commercial insurance carrier.

Commercial Carriers
In other states, commercial insurance carriers compete for business in the Workers Compensation sector. Major insurance carriers in this competitive market include Liberty Mutual, CNA, Fireman's Fund, The Hartford, and Travelers.

State Pools
State Workers Compensation insurance pools are available to those employers who are generally considered a high risk by commercial insurance carriers, either due to a high percentage of claims or a poor safety record. Premiums are generally higher than commercial carriers due to the higher degree of risk of a claim.

Self-Insurance
Forty-seven states allow businesses of a sufficient size to be self-insured, meaning that they may forego paying an insurance company and assume the risk for paying claims out-of-pocket.

Beneficiary Designations: the Hidden Trap

Wed, 22 Dec 2004 00:00:00 GMT

Beneficiary Designations: the Hidden Trap

More and more of us recognize the need for careful, methodical estate planning. We prepare our wills and trusts. We labor over who should be guardians for our children and who should be trustees and executors. We decide how and when our children or other loved ones should get what we leave behind. However, all too often people who thought they had it all planned fall into a hidden trap: improper beneficiary designations.

Beneficiary designations govern many of our most valuable assets, including life insurance, retirement plans, bank accounts, mutual funds, brokerage accounts, and sometimes even automobiles. Retirement assets alone account for $10.9 trillion, according to statistics from the Investment Company Institute and the Federal Reserve Board. Beneficiary designations direct those assets notwithstanding contrary provisions in a will or trust.

Old Designation
Often we fill out beneficiary designations when we are not thinking about our overall estate plan. A great example is the beneficiary designation for our retirement plan assets. We start a new job and the human resources department gives us a stack of papers to read and another one to sign. We sign that we received the policy manual. We sign what our tax withholdings should be. We sign forms for health, life, dental, and disability insurance. We sign a form directing what should be withheld for retirement and how it should be invested. Finally, we sign a form that indicates to whom retirement plan assets should go upon our death. By this time, we are exhausted from filling out forms and we may not give this as much thought as necessary. This designation stays in effect until completion of a new form.

Beneficiary designations usually are not affected by a change in life circumstances. If you started your job right after college and named your college boyfriend or girlfriend, he or she remains your beneficiary even if you are now married and have children. This might be fine if you married the boyfriend or girlfriend. However, if you ended that relationship and married someone else, your spouse could be in for a rude awakening at your death when your old flame gets all your assets.

No Designation
If you never got around to filling out the appropriate forms, or if the person you designated, like a parent, died before you and there were no backup or contingent beneficiaries designated, the assets would go to your estate. This would bring the assets back under the control of your will. However, this creates two additional problems. First, the assets would be subject to a probate proceeding. This is a public proceeding that can be time consuming and expensive. Second, this causes an acceleration of the income taxation of retirement plan assets and does not allow the surviving spouse to do a "rollover" of the assets.

Comprehensive Estate Plan
Analysis of beneficiary designations is an important part of a comprehensive estate plan. Careful coordination of beneficiary designations with a revocable trust can ensure that your assets go to whom you intend. Further, such coordination allows for the deferral of income taxation until long after your death. A qualified estate planning attorney can help you prepare a comprehensive estate plan.

Association Liability

Fri, 31 Dec 2004 00:00:00 GMT

Criminal Acts in Common Areas: Liability of the Association

By collecting fees from individual condominium owners, a condominium association typically agrees to maintain the common areas of the complex. However, the association may also be required to take reasonable precautions to prevent criminal acts by third parties in the common areas. Third parties are people who do not own a condominium within the complex or are not the invited guests of current condo owners.

Association's Liability
When a person is injured by the criminal act of a third party, the condominium association may be liable under a negligence cause of action for failing to take reasonable precautions to prevent such acts. To bring action, the injured person must establish that the association had a reasonable duty to protect the person from a third party's criminal act.

Foreseeable Dangers
If the injured person is a resident or a guest, the association may have a duty to protect against foreseeable dangers. The duty stems from circumstances that indicate criminal activity is present. Such circumstances include past criminal activity, notification of recent criminal activity, or steps the association has taken against criminal activity. Under these circumstances, the association has actual knowledge of the crimes, or should have known of crime. Some examples are high crime rates, strangers on the property, dim lighting, and a lack of security devices such as gates, cameras, or locks.

Duty Assumed Voluntarily
The condominium association may also voluntarily assume the duty in a number of ways:

An oral commitment to the injured person
Precautions already taken to improve security
Written items in the association's bylaws about certain security requirements
Special Relationships
Under certain circumstances, the court may view the relationship of the injured person and association as similar to a landlord and tenant. In such cases, there is a special relationship, and a duty to protect against criminal acts is "owed." Not all courts follow this view, and some hold that landlords generally do not have a duty to protect tenants from criminal acts

Security Regulations Statutes
Finally, there may be certain statutes that require minimum security standards. Examples are city ordinances requiring dead bolts on exterior doors, or requiring that vacant structures be locked up. Violations of these statutes or ordinances by a condominium association are strong indicators of liability, but the injured person must prove that those violations directly contributed to the criminal activity.

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Eminent Domain

Fri, 31 Dec 2004 00:00:00 GMT

What is Eminent Domain?

If you own a piece of land but do not want to sell it to the city, state or other government body, did you know that they can acquire the property anyway?

This is called eminent domain, or condemnation, which is the supreme power of the government to take private land for public use. However, the government must pay the owner the property's fair market value prior to taking possession, as guaranteed by the Fifth Amendment of the U.S. Constitution.

Land is usually acquired this way. However, government may use eminent domain to take other types of property such as office buildings or housing developments. They must show how acquiring the property will benefit the public good.

Generally, state statutes guide how eminent domain power is implemented. In some states, government may not start eminent domain proceedings until all efforts have been exhausted to negotiate with the property owner. In other states, the owner does not even need to be notified before proceedings begin.

It is not unusual for property owners to fight against the government's actions, mainly in regard to the property's worth. Real estate appraisers and other expert witnesses usually are asked to testify in court to help settle the case.

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Home Equity Conversion Mortgage - HECM

Fri, 31 Dec 2004 10:24:34 GMT

HECM - Home Equity Conversion Mortgage

A reverse mortgage is an arrangement under which a homeowner may get a loan representing a percentage of home equity. The homeowner will not be required to make payments or repay the loan so long as she continues to reside in her home and keeps taxes and insurance current. Reverse mortgages are more popular than conventional home loans among the retired as there are no income requirements for qualification.

The lender will recover the principal amount of the loan, plus interest, when the home is sold or when the homeowner (and spouse, if any) no longer resides in the home. In addition, the homeowner or her heirs will recover the remaining value of the home, if any, at this time.

The Home Equity Conversion Mortgage
The only federally-insured reverse mortgage is the Home Equity Conversion Mortgage (HECM). The Federal Housing Administration (FHA), a part of the U.S. Department of Housing and Urban Development (HUD), guarantees HECM loans. HECM loans are available in all 50 states, the District of Columbia, and Puerto Rico.

Advantages of an HECM Loan

No income or credit requirements
If proceeds from the sale of the home are insufficient to cover the amount owed, HUD will pay the difference
The credit line increases over time; i.e., the amount of available cash increases until all of it has been withdrawn
Generally provides the largest loan advances of any reverse mortgage
Offers the most options regarding the structure of loan payments – the borrower has five alternative ways to receive HECM loan payments
The only reverse mortgages that cost less than HECM loans are generally those offered by state or local governments

Requirements of the Borrower
To qualify for an HECM loan, the borrower must be:

62 years of age or older
A homeowner (either owning the home outright, or maintaining a low mortgage balance that can be paid off at closing with the proceeds from the loan)
The primary resident of the property
A participant in a free consumer information session given by an independent HUD-approved counseling agency

Determination of the Mortgage Amount
The following factors influence the mortgage amount:

The age of the youngest borrower
The current interest rate
The appraised value of the home or FHA's mortgage limits for the area, whichever is less
Other loan fees

Other Requirements
The property must meet the U.S. Department of Housing and Urban Development (HUD) minimum property standards and be at least one year old.

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The Homestead Exemption

Fri, 31 Dec 2004 12:56:34 GMT

The Homestead Exemption and Shielding a Personal Residence from Creditors

Upon filing for bankruptcy under either Chapter 7 or Chapter 13, a debtor can face the risk of losing some or all of his personal and real property assets to satisfy the claims of unsecured creditors. However, many states provide what is known as "the homestead exemption," which can shield a debtor's personal residence from being repossessed and/or sold for the benefit of creditors.

The Unlimited Homestead Exemption
A few states offer an unlimited homestead exemption, or an exemption with no dollar cap. This means that unsecured creditors in states that provide an unlimited homestead exemption cannot seek payment from a debtor's personal residence at all, no matter what the value of the property is.

Texas provides an unlimited dollar value homestead exemption. However, the exemption is limited based on the acreage of the land in question. In Texas, unsecured creditors cannot seek payment from a debtor's personal residence if the homestead is not more than one acre in a city or 200 acres elsewhere.

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ILSDA protects individuals from land sale scams

Fri, 31 Dec 2004 12:59:03 GMT

ILSFDA Protects Individuals from Land Sale Scams

Prompted by an increase in land sale scams in the 1960's, Congress passed the Interstate Land Sales Full Disclosure Act (ILSFDA) in 1968. Administered by the Federal Department of Housing and Urban Development (HUD), the ILSFDA regulates transactions involving the sale or lease of undeveloped land through the U.S. Mail system or through any advertisements in interstate commerce. Some states have adopted measures similar to ILSFDA and/or impose additional, state-specific requirements regarding land sale contracts.

ILSFDA Applicability and Requirements
Developers and promoters that advertise over 100 lots are required to submit a "statement of record" to the Office of Interstate Land Sales Registration of HUD (OILSR). Those that sell between 25 and 100 lots need not register, but must still comply with ILSFDA anti-fraud requirements. The anti-fraud requirements forbid anyone from knowingly making false statements regarding land for sale. For example, a developer or promoter may not advertise that a parcel of land has a utility service where they know it does not.

Those who engage in the sale or lease of fewer than 25 lots of land are exempt from ILSFDA provisions. However, HUD may still aggregate sales from a single seller that are part of a "common promotional plan," which could then equal 25 lots. For instance, if an individual attempts to sell lots in a single area, then suspends sales to avoid compliance, they must comply with ILSFDA rules if their sale plan totals 25 lots or more.

Statement of Record Requirements
The "statement of record" that must be filed with OILSR generally requires the following documentation:

A copy of the seller's corporate charter and financial statement
Information about the land: title policy and attorney title opinion
Facilities in the area (hospitals, schools, etc.)
Available utilities, water, and sewer
Development plans for the property: roads, streets, etc.
Other supporting documents

Printed Property Report
All buyers protected by ILSFDA must receive a printed property report at least 48 hours before signing the land sale contract. The report should include the following:

Distances to nearby communities via paved or unpaved roads
Existing mortgages or liens on the property
Present and proposed utility services and charges
Soil and foundation conditions
Availability of recreational services
Availability of sewer and water service or septic tanks and wells
Number of homes currently occupied
Whether contract payments are placed in an escrow or special fund
Type of title the buyer will receive

Potential buyers must be wary of inaccuracies within the property report, since such documentation is typically not reviewed or verified by any government entity. Moreover, HUD does not inspect the lots.

Remedies for Violation of ILSFDA
If the sale is subject to ILSFDA and after the buyer has seen a property report from the seller, the buyer has seven days to cancel the contract after signing for any reason. If the seller fails to give the buyer a copy of the property report before the contract is signed, the buyer has up to two years to cancel the contract and obtain a refund.

Those who believe they have been cheated in an ILSFDA transaction may file a complaint with HUD. If there have been material misrepresentations, the buyer may take legal action and seek reimbursement. ILSFDA authorizes the court to also award interest, court costs, reasonable attorneys' fees, and the costs of travel to and from the lot.

Such actions must be brought either within three years of signing the contract or within three years after discovery of the ILSFDA violation (whichever is shorter). Further, claims will also be barred if the court finds that three years have passed from the time the ILSFDA violation should have been discovered (with reasonable diligence).

Penalties for Violation of ILSFDA
Developers and promoters that violate the ILSFDA may be subject to monetary sanctions/fines and/or imprisonment. An example of the possible magnitude of ILSFDA penalties involves a recent 2003 case against a land-sale company called Buyers Source. In that case, HUD filed a lawsuit against Buyers Source for engaging in a land sale scam, in violation of the ILSFDA, which spanned six states including Florida, South Carolina, Ohio, Arkansas, Texas, and Missouri.

In the 2004 Buyers Source ruling, a Virginia federal judge ruled that Buyers Source had scammed more than $30 million dollars from over 500 senior citizens by using hard-sell pressure tactics to convince them to purchase lots of land for more than 3,000 percent above actual market value. The judge found that these actions, in addition to the failure to provide property reports to the buyers, violated the ILSFDA. Buyers Source was ordered to pay more than $31 million into a compensation fund that would help reimburse buyers for their losses. The owners, operators and some agents of Buyers Source, as well as other individuals and companies which took part in the scam, were also either ordered to pay additional fines or settled out of court.

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Benefits of Listing Agreements

Fri, 31 Dec 2004 13:00:59 GMT

Benefits of Listing Agreements

A listing agreement is a contract to employ a real estate broker to act as your representative, or legal agent, in selling your property. This employment contract between an agent and you (the seller) creates an "agency relationship."

Three basic types of listing agreements are used in most states:

Open Listing (Non-Exclusive)
The open listing simultaneously authorizes more than one agent to sell your property, and allows you the right to sell the property yourself without paying a commission. Essentially, the first agent with a buyer earns the commission. Brokers discourage this type of listing because of its uncertainty and potential expense to them. An open listing can be terminated at any time.

Exclusive Right to Sell Listing
This is the most commonly used agreement. It entitles the listing broker named in the agreement to a commission even if another agent or the owner sells the property. The contract usually promises to pay the commission after the listing period expires only if the broker introduced the buyer to the property during the listing period.

Exclusive Agency Listing
The exclusive agency listing entitles only the listing broker to collect a commission. However, the owner still has the right to independently sell the property without paying a broker's commission.

In general, a listing may be for any length of time, although brokers typically try to keep a listing for at least 90 days. If no beginning date is specified, the effective date is the date when the listing is signed. In addition, both types of exclusive listings must have definite termination dates.

All real estate listing agreements or contracts should be in writing, and must be in writing for the broker to collect a commission.

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Predatory lending practices reduction act

Fri, 31 Dec 2004 13:03:16 GMT

Potential Predatory Mortgage Lending Practices Reduction Act

Abusive practices in the mortgage lending market have led to legislation prohibiting such mistreatment. Predatory mortgage lending practices are mostly aimed at loan applicants who are likely to be less informed. Such applicants usually include those in the subprime loan market.

Subprime mortgage loans are typically made to borrowers with a high credit risk. Predatory lending can occur with these borrowers through the inclusion of deceptively and unfairly inflated terms and fees. In response, in April of 2003, a House representative proposed the Predatory Mortgage Lending Practices Reduction Act.

Objectives of the Proposed Act
If passed, the Predatory Mortgage Lending Practices Reduction Act will amend the Real Estate Settlement Procedures Act (RESPA) by requiring that all mortgage lenders and mortgage brokers be certified in subprime lending by the Department of Housing and Urban Development in order to transact business in connection with subprime mortgage loans.

The proposed Act seeks to achieve the following three main goals:

Create subprime certification, including a written examination on several federal laws related to lending and housing
Set up minimum practice standards for providing information to consumers
Create civil penalties on an escalating scale for violating federal laws pertaining to predatory lending

Additionally, the Act will provide $1 million to fund the certification program, and another $1 million will be allocated for community development programs to increase consumer awareness.

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Restrictive covenants and land use

Fri, 31 Dec 2004 13:06:16 GMT

The Effects of Restrictive Covenants on Land Use

Zoning laws and ordinances are the chief method that local governments employ to regulate the use and development of property. Similar results can also be achieved by private persons or entities through the use of "restrictive covenants" sometimes called "covenants, conditions and restrictions" or "CC&R's."

Restrictive Covenants
A covenant is basically an agreement or promise. As it applies to property, it is usually an agreement between two or more parties to do or not do something related to the property. Historically, it often arose between two landowners of adjacent property and could be positive (an agreement to do something) or negative (an agreement not to do something). Generally, it was considered that a subsequent purchaser of property subject to a covenant could not be bound by a positive covenant, but would be bound by a negative covenant.

Eventually, use of restrictive covenants was extended to regulate the use and development of certain tracts of land as they were developed. It is theoretically possible for a number of adjacent landowners in one area to create a binding agreement about the use and development of such properties. More commonly, though, the owner (and developer) of a large tract of land that is to be subdivided and sold as parcels, (either before or after buildings have been constructed on it), will prepare a document memorializing "restrictive covenants" that will apply to each parcel.

Creation of Restrictive Covenants and Common Provisions
Restrictive covenants are common for residential developments. The restrictions can be placed into or attached to each deed or, more often, filed as a separate document with the local recorder of deeds. The restrictive covenants then become binding upon each purchaser and each successor purchaser to that property until the covenants are terminated. However, the covenants may theoretically be effective forever.

Restrictive covenants vary depending on how they are drafted, the location and nature of the property, and other factors, but common provisions include:

That property can only be used for residential purposes (often just single-family residences); commercial activities are usually not allowed.
Minimum lot sizes and that the property cannot be subdivided.
"Setbacks" – how far buildings must be from the street and lot lines.
Rules about animals – they may not be allowed at all, or may permit only domestic animals such as dogs and cats, subject to a specified number of pets and other restrictions.
The size, quality, color scheme, and type of building allowed – unlike zoning laws, which usually set a maximum size, restrictive covenants may set a minimum size (to maintain a uniformity in the houses) and may also provide for an architectural committee with the right of approval on building, landscaping, and decorating plans to ensure uniformity of quality and architecture.
A ban on aesthetically objectionable practices, such as parking old, unused vehicles on the property, failing to cut the grass, holiday decorations that remain up too long and placing signs on the property.
Restrictions on erecting of fences, walls, and outbuildings or installing a pool.

Constitutionality of Restrictive Covenants
Proponents of restrictive covenants argue that they can increase property values and improve the community. Critics point out that they infringe on the owner's land-use rights and may be used to effectively keep out "undesirable" elements, or to discriminate against certain individuals.

If restrictive covenants are violated and the property owner cannot be convinced to voluntarily comply, a legal action to force compliance may be filed. Courts will generally enforce restrictive covenants, unless they determine such covenants are no longer necessary or advisable.

In the last century, restrictive covenants were often explicitly drafted to exclude racial minorities, especially African-Americans. In a landmark case in 1948, the U.S. Supreme Court considered whether such racially motivated covenants are enforceable. The Court declined to nullify the restrictive covenants, because they were private agreements, but it held that the courts could not enforce them. The Court determined that such enforcement would be government action and would violate the 14th Amendment to the Constitution. It is now considered that restrictive covenants cannot be used to discriminate on the basis of race, creed, color, national origin or ancestry.

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Caution: Giving Your Assets to Your Children Now Can Cause Serious Problems

Wed, 05 Jan 2005 14:19:28 GMT

Sometimes people will transfer title of their assets to their adult children while they are living, thinking it will make things easier for their children when something happens to them. Doing this will prevent the court from controlling the assets if you become incapacitated and it will avoid probate when you die. And while there can be valid tax reasons to transfer some assets now, it can also create problems.

First, when you give away an asset, it’s gone. You may think your children will give it back to you if you change your mind, but they don’t have to, and things can change in families when money is involved. They could sell the
asset against your wishes, they could lose it to creditors, or be influenced by a spouse. If you outlive your children or they divorce, a daughter- or son-in-law could end up owning the asset. Would she or he give it back to you?

Second, there could be tax problems. Currently, when you give someone other than your spouse more than $11,000 in one year, a gift tax may be involved. And when your children sell the asset, there will probably be a capital gains tax. That’s because, under current law, the asset would not receive a stepped-up basis. The basis of an asset is the value used to determine gain or loss for income tax purposes; in other words, the basis is what you paid for the asset. If you give an appreciated asset to your children while you are living, it keeps your old basis (what you paid for it). But if they receive it as an inheritance after you die, it receives a new steppedup basis, and is revalued as of the date of your death. Let’s look at an example. Let’s say you purchased your home for $20,000 and it’s worth $150,000 when you die. If your children receive it as an inheritance after you die, the basis would be $150,000. If they then sell it for
$150,000, there would be no gain and no capital gains tax. But if you give the house to them while you are living, the basis would be $20,000 (what you paid for it). If they sold it for $150,000, they would have a $130,000 capital gain and would have to pay $19,500 in capital gains tax. (Currently, the top capital gains rate on assets held longer than 12 months is 15%.)

Substantial gifts may also disqualify you from receiving Medicaid and SSI (Supplemental Security Income) benefits for a significant period of time. Gifting can be a great way to reduce estate taxes if your estate is larger and you can afford to give away an asset. But never give away an asset you may need later. And make sure you consult with an experienced professional.

Special needs trust for the physically, mentally, or developmentally disabled

Wed, 05 Jan 2005 14:41:22 GMT

If you have a child, sibling, parent, spouse, or other loved one who is physically, mentally or developmentally disabled— whether from birth, illness, injury or drug abuse—he or she may be entitled to valuable government benefits (SSI and/or Medicaid) now or in the future. Unfortunately, most of these benefits are available only to those with very limited means.

As a result, you may find yourself faced with a difficult choice. If you leave a substantial inheritance to this person, he will be disqualified from receiving government benefits which may be crucial for his care. On the other hand, you may not want to have to disinherit him in order to preserve these benefits. Fortunately, a special needs trust will keep you from having to make this wrenching decision.

A special needs trust must be very specific in stating that its purpose is to supplement government benefits, to provide only benefits or luxuries above and beyond the benefits the beneficiary (disabled person) receives from any local, state, federal or private agencies. It is critical that the trust not duplicate
any government-provided services and that the beneficiary not have any resemblance of ownership of the trust assets. Otherwise, the government could attempt to seize the trust assets for repayment of services already provided or determine that the beneficiary does not qualify for future benefits.

To accomplish this, you will need to give the trustee complete control
over the distribution of the assets and any income they generate; the beneficiary cannot be able to demand any principal or interest from the trust.

Give careful consideration to your choice for trustee. Of course, you (and your spouse) will continue to provide for this person while you are alive and able. But someone will need to assume this responsibility after your death or incapacity. The most obvious choice is another family member who also cares
deeply about this person. But be aware of a possible conflict of interest, especially if she will inherit the trust assets after your disabled dependent has died; she may care more about preserving trust assets than providing for your beneficiary.

Consider using (or adding) a corporate trustee; that’s a bank or trust company that specializes in managing trusts. They can be impartial, and they will be around for as long as your beneficiary lives.

Finally, be sure to work closely with an attorney who has considerable
experience with these trusts.

Event checklist for updating or revising your estate plan

Wed, 05 Jan 2005 15:19:48 GMT

If you own a car, then you know it requires regular servicing in order to perform well and be reliable. More than likely, your car came with a recommended schedule for service, based on how many miles it has been driven; after a certain number of miles, you need to change the oil, replace the brake pads, rotate the tires, and so on. If you have a newer car, you probably have an irritating dash light that comes on when it’s time for service and stays on until the mechanic resets it. Either way, whether you pay attention to the odometer or rely on that dash light, it’s pretty easy to know when it’s time to service your car. And if you keep driving it without servicing it, it’s a sure bet your car will let you down. Like your car, your estate plan needs “servicing” if it is going to perform the way you want when you need it.

Your estate plan is a snapshot of you, your family, your assets and the tax laws in effect at the time it was created. All of these change over time, and so should your plan. It is unreasonable to expect the simple will written when you were a newlywed to be effective now that you have a growing family, or now that you are divorced from your spouse, or now that you are retired and have an ever-increasing swarm of grandchildren! Over the course of your lifetime, your estate plan will need check-ups, maintenance, tweaking, maybe even replacing. So, how do you know when it’s time to give your estate plan a checkup? Well, instead of having mileage checkpoints, your estate plan has event checkpoints. Generally, any change in your personal, family, financial or health situation, or a change in the tax laws, could prompt a change in your estate plan. Use the following list to guide you.

It’s a good idea to review your estate plan every year. Set aside a specific time every year (your birthday, anniversary, family gathering) to review it. Keep these events in mind each time you read through your documents. If you think a change may be in order, don’t write on your actual document; contact our offices. Most changes can be handled by a simple amendment that is attached to your current will or trust.

Event Checkpoints for Your Estate Plan

You and Your Spouse
• You marry, divorce or separate
• Your or your spouse’s health declines
• Your spouse dies
• Value of assets changes dramatically
• Change in business interests
• You buy real estate in another state
Your Family
• Birth or adoption
• Marriage or divorce
• Finances change
• Parent / relative becomes dependent on you
• Minor becomes adult
• Attitude toward you changes
• Health declines
• Family member dies
Other
• Federal or state tax laws change
• You plan to move to a different state
• Your successor trustee, guardian or administrator moves, becomes ill, changes mind
• You change your mind

Conservation easements and private land

Wed, 12 Jan 2005 12:49:51 GMT

Conservation Easements and Private Land

The Fifth Amendment to the U.S. Constitution states, in part, that private property shall not be "taken for public use, without just compensation." In order to take property, the government must first condemn it through "eminent domain" power and then pay the owner the property's "fair market value."

Generally, regulation regarding land use decisions and zoning (including takings by eminent domain) are made at the state level, while the administration of such regulation is frequently assigned to county or local governments. The federal government can provide incentives for state and local governments to implement development plans that meet certain criteria, such as maintaining land for endangered species. One type of incentive relates to "conservation easements."

Conservation Easements
In general, an easement involves the transfer of some right attached to a piece of land to a person or entity that does not own the land. A "conservation" easement is usually a permanent restriction placed on private land to protect natural or man-made resources. As such, it prohibits certain types of development from taking place on the land. The holder of the conservation easement can control specified uses, while the original owner may still retain ownership and limited use.

Often, state law controls the creation and maintaining of easements. As common law did not allow the creation of an easement for conservation purposes, such easements are only permitted where a relevant state statute is in place. In 1981, a "Uniform Conservation Act" was drafted and recommended by the American Bar Association for adoption by the states, and many have done so.

Although landowners are encouraged to grant conservation easements voluntarily, they can be created by force through eminent domain. A landowner in upstate New York recently challenged a township-created conservation easement, but the courts concluded it was an not a "taking." This decision was based, in part, on the judge's opinion that there was a clear relationship "between the conservation easement and the legitimate town interest of protecting sensitive environmental areas within its borders."

Conservation Easement Benefits
Federal tax laws allow deductions for the fair market value of conservation easements donated to land trusts and other public interest organizations. Currently, the grant of the easement must be in perpetuity to receive the tax benefits. This means that the easement, essentially, must have been granted for an indefinite period of time. The benefits of such an arrangement include:

Protecting and conserving resources important to the landowner and the public
Tax benefits, such as reducing property and/or estate taxes, as the fair market value of the land is reduced by the value of the granted conservation easement
Maintaining private ownership of the land, at least in part

To qualify for benefits, the easement must meet one or more of the following purposes:

Preservation of land for outdoor recreation or education
Protection of natural habitats of fish, wildlife, or plants
Preservation of historically significant land or buildings
Scenic enjoyment of the public

Critics and Enforcement
Conservation easements have their critics. Some states have taken action to limit the term of such easements from in perpetuity to a fixed term, such as fifty years, and put other restrictions on such easements. Some states have legislation pending that would prohibit easements that prevent use of natural resources.

Each conservation easement is distinctive and unique to the private property owner and easement holder. The most common right that the landowner relinquishes is the right to subdivide or develop the land. The easement holder has the responsibility to:

Establish the easement by clear and enforceable language and documentation
Monitor use of the land regularly
Provide information and background about the easement to prospective buyers
Establish a review and approval process for covered land uses
Enforce the easement through the courts, if necessary
Maintain property and easement-related records

How do bank accounts pass after my death?

Wed, 12 Jan 2005 16:24:17 GMT

How do bank accounts pass after my death?

The answer will depend upon the type of account you established when you signed the bank's signature card. Some types of bank accounts pass under the terms of your will, while other types of accounts pass outside of your will and do not become part of your estate. The following is a list of common accounts that banks offer and how each passes after death.

Joint Account, Tenants in Common or Joint Tenancy.
Each person owns the funds in the account in proportion to his or her contribution, unless it is shown otherwise. Any person on the account can withdraw all of the funds, even if deposited by another person on the account. The funds on deposit on the date of death pass under the deceased's will to the extent of his or her contributions.

Joint Tenants With Rights of Survivorship (JTWROS)
This account is established in the names of two or more persons by signing a survivorship agreement. The survivor(s) take all sums on deposit upon the death of one person. The funds on deposit at the time of death do not become part of the estate of the deceased.

Payable on Death Account (POD)
The funds in the account belong to the person obtaining the account as long as he or she is alive. At death, the funds pass outside of the deceased's will to the person named as beneficiary.

Convenience Account
This is an account established by one person in his or her name which also names a cosigner. The terms of the agreement provide that the account is established for the convenience of the depositor. Both the depositor and the cosigner can withdraw all of the funds from the account during the depositor's life. After the death of the depositor, the funds in the account pass according to the depositor's will and do not belong to the cosigner.

Trust Account
This is an account in the name of one or more persons as trustee for one or more beneficiaries. During the trustee's life, the sums on deposit belong to the trustee (unless it is an irrevocable trust, in which case the funds belong to the beneficiary). Upon the trustee's death, the sums on deposit pass to the beneficiary.

If my spouse and I put our wills in a safe deposit box and one of us dies, can the survivor get the will out of the safe deposit box?

Yes. If a safe deposit box is held in the name of two or more persons jointly, any one of the persons is entitled to access to the box and shall be permitted to remove the contents at any time. The death of one holder of a jointly held safe deposit box does not affect the right of any other holder to have access to and remove the contents from the safe deposit box.

If you have a safe deposit box in one name only, who can get into the safe deposit box after the death of the safe deposit box holder?

The bank should allow the following persons to examine the safe deposit box without court order: (1) the surviving spouse; (2) the parents; (3) any adult children or grandchildren; and (4) a person named as executor who presents a copy of a document that appears to be the will of the box holder.

If the safe deposit box is in one name and the holder of the box dies, what items can such person remove from the safe deposit box?

The bank is allowed to deliver the will to the Probate Clerk or to the person named as executor. Any life insurance policies can be given to the beneficiaries, and the deed to a burial plot may be given to the person examining the box. No other items may be removed from the box until court authority is obtained.

Burial Rights - Who has the right and/or obligation to bury a deceased person?

Wed, 12 Jan 2005 16:27:13 GMT

Burial Rights

Who has the right and/or obligation to bury a deceased person?

The family of the deceased has the duty to bury (or inter) as well as an obligation to pay the burial costs, unless there is a written pre-death directive or a prepaid funeral plan. This directive may be included in a will, and the funeral home is permitted to rely on such directive even though the will has not been admitted to probate. In the absence of a written directive, the surviving spouse has the responsibility and obligation to pay for burial costs. If there is no surviving spouse, the order of priority rests next with the adult children, parents, adult brothers and sisters, heirs at law, a guardian, the county of residence, one performing an inquest, and finally with anyone willing to assume responsibility and liability for the decedent's remains and the costs of burial. When the decedent is indigent, it is necessary to notify the County Social Services Department within 24 hours of death. If this notice requirement is not timely met, the county will not pay any costs of the person's burial.

Must I make specific provisions if I wish to donate my body or specific organs following my death?

The Texas Anatomical Gift Act permits anyone over the age of 18, or those under 18 with parental consent, to donate either his or her own body or specific organs. Donations can be shown on your driver's license, in your will, or by another document. The donation agreement must be witnessed by two persons. If you want to make a specific-purpose gift to a certain organization, it is important that you check in advance to see if your donation will be accepted.

If I should die without making an anatomical gift, can one still be made?

The Texas Anatomical Gift Act does allow family members to donate a decedent's body or other acceptable organs. This authority to donate rests first with the surviving spouse and then, in order of priority, with the adult children, parents, brothers and sisters, a guardian, or any other person authorized to dispose of the body.

If I desire to be cremated how should this directive be handled?

You may provide written directions for cremation or other disposition of your body by will, a prepaid funeral contract, or a written, signed and acknowledged instrument. You should then appoint a person as your agent to faithfully carry out your instructions. A form for such an appointment appears in chapter 711 of the Texas Health and Safety Code, available at your local law library.

Where can I obtain information describing burial services and costs?

State law requires funeral home operators to provide a list of retail prices for a person to keep, along with a brochure published by the state. Funeral home operators must also explain that a contract may not be signed before the retail price list is provided. You may also telephone a funeral home operator and be given general price information within a reasonable amount of time

Can I make funeral arrangements before I die?

Yes. You may make necessary burial arrangements before they are needed. Several methods are available to set aside the money needed to pay for these services. Many funeral homes provide pre-need burial programs. These programs may be established after the burial services have been selected and may be funded by insurance or annuity payments. The type of plan, as well as the services to be provided, can be selected at a less stressful time and with more consideration being paid to the cost and needs of the individual. The Banking Department of Texas has established a state fund to help protect your investment of pre-needed funeral expenses.

What type of death benefits are available to my survivors?

If you are a veteran of the military, both your surviving spouse and your children may be entitled to veterans benefits. Specific information can be obtained from your regional veterans affairs office. In addition to monetary benefits, the family of a veteran may also be entitled to a flag, burial in a national cemetery, transportation of the body to the cemetery, and a headstone or marker. Social security death benefits may also be available to a surviving spouse, a minor child if there is no surviving spouse, or a surviving parent if there is no surviving spouse or child eligible. Only the eligible person may make an application to the local social security office. The Texas legislature has provided benefits to its citizens under the Texas Criminal Victim's Compensation Act. Specific applications must be completed in a timely manner when a criminal report has been made.

What is a directive to physicians or living will?

Wed, 12 Jan 2005 16:29:43 GMT

What is a directive to physicians or living will?

This is an instrument that allows you to declare, in the event your death is deemed imminent by a physician due to disease, illness, or accident, that you do not wish to have your life prolonged by artificial means. This is accomplished by either withholding or withdrawing life sustaining procedures.

Are physicians legally bound to honor such directives?

Yes. If your physician chooses not to honor such directive, he or she is legally bound to find you a physician that will do so.

Can I change my mind if I have made such a declaration?

Absolutely. It is a simple matter to cancel a directive to physicians.

Can I prepare the directive myself?

Although there is nothing in law that forbids a person from making their own directive, we recommend you consult an attorney for the drafting of such document.

Who should know about such declaration and where should I keep the original document?

It is a good practice to discuss with and send a copy of such document to your physician(s) as well as any family member who might be in a representative position for you, i.e., the person named as executor in your will. This will assure your intentions are carried out in the event the directive is needed to be used. The original document should be kept in a fire-proof place, such as a lock box or safety deposit box. Just be sure your financial representative (executor) is able to gain access to such document if it is needed.

Texas guardianship

Wed, 12 Jan 2005 16:38:58 GMT

Guardianship

How does one go about initiating a guardianship?

Any interested party may file an application with the proper court requesting that a guardian be appointed for a person believed to be incapacitated.

What is the definition of an incapacitated person?

A person may be found to be incapacitated if due to a mental or physical condition he or she is unable to: (1) provide food, clothing, or shelter for himself or herself; (2) care for his or her own physical needs, or (3) manage his or her own financial affairs. A finding of incapacity will allow the person to be placed under guardianship. A minor person (someone under 18 years of age) and missing persons are also considered to be incapacitated.

Once a guardian is appointed, does the incapacitated person lose all rights and powers?

Not necessarily. A judge may appoint a guardian for an incapacitated person, but limit the guardian's powers so that all rights and powers except those granted to the guardian are retained by the incapacitated person.

Who may serve as guardian?

The court will appoint a guardian for an incapacitated person in the following order of priority: (1) the incapacitated person's spouse; (2) the person's nearest kin; and (3) an eligible person who is best qualified to serve.

Do the types of guardians vary?

Yes. Generally, there is a guardian of the person and a guardian of the estate. The guardian of the person has the duty and power to provide the incapacitated person with clothing, food, medical care, and shelter. The guardian of the estate has the duty and power to manage the incapacitated person's financial affairs. One person can fill both positions.

Who is not allowed to serve as guardian?

A person may not be appointed guardian if the person is a minor, a notoriously bad person, an incapacitated person, a person who is a party to a lawsuit affecting the incapacitated person (with some exceptions), a person who owed the incapacitated person money unless it is repaid, a person with adverse claims to the incapacitated person or his property, an inexperienced or uneducated person, a person the court finds unsuitable, a person eliminated in a person's designation of guardian, or a nonresident without a resident agent.

Are there costs involved in a guardianship?

Yes. These costs include attorney's fees, filing fees, attorney ad litem fees, and bond premiums to be paid out of the incapacitated person's estate.

What rights are retained by the incapacitated person?

The incapacitated person has the right to receive a copy of the application for guardianship and other documents filed with the County Clerk. He or she is also entitled to be at the hearing to determine whether he or she is incapacitated.

Is an alleged incapacitated person represented by an attorney?

Yes. When a guardianship is filed, the court appoints an attorney ad litem to represent the interests of the alleged incapacitated person. The person can also retain his or her own attorney.

What happens at a guardianship hearing?

The person who filed the application must prove the incapacity through testimony and medical evidence. The alleged incapacitated person has a right to bring his or her own witnesses to court and also the right to speak to the judge. The alleged incapacitated person may also request a jury trial. The judge or jury will determine if the person is incapacitated.

How soon can a guardianship hearing be held?

The earliest date to schedule a hearing is the Monday following the expiration of 10 days after the alleged incapacitated person has been personally served with the application of guardianship.

Upon appointment, how does a guardian qualify?

The guardian must file an oath and post a bond in the amount set by the court to insure proper performance of his or her duties.

Does the guardian have reporting requirements to the court?

Yes. The guardian of the estate must file an inventory within 90 days of qualifying. The inventory must list all assets of the incapacitated person coming into the guardian's hands and all debts owed to the estate. The guardian of the estate must file an annual account to report all receipts and disbursements. The guardian of the person must file an annual report on the location, condition, and well-being of the incapacitated person.

What if there is an immediate need for the appointment of a guardian?

A temporary guardian can be appointed without notice to the proposed incapacitated person if his or her person or property is in imminent danger. Usually a temporary guardianship will not exceed sixty 60 days. However, if a permanent guardianship application has been filed and is contested or challenged, the court may appoint a temporary guardian to serve as temporary guardian until the contested guardianship action is resolved.

Does the person for whom a temporary guardianship has been appointed have any rights?

Since that person is not presumed to be incapacitated, he or she retains all rights and powers not granted to the temporary guardian. He or she is entitled to be served with a copy of the documents that are filed. The court must appoint an attorney to represent the alleged incapacitated person. The court must hold a hearing no later than ten 10 days after the date of filing the temporary guardianship to determine whether there is a need for continuation of the temporary guardianship.

Plannign for incapacity

Wed, 12 Jan 2005 00:00:00 GMT

Planning for Incapacity

What does the term "incapacitated" mean?

An adult is incapacitated if, because of a physical or mental condition, the person is substantially unable to provide food, clothing, or shelter for himself or herself, to care for his or her physical health, or to manage his or her financial affairs. Merely advanced age or hospitalization does not automatically mean a person is incapacitated.

How can I provide in advance for the management of my financial affairs should I become incapacitated?

As you grow older and the possibility of becoming incapacitated increases, it is wise to consider choosing a trusted friend or family member who will have the legal authority to manage your financial affairs without incurring the expense of a guardianship. This is done by executing a Durable Power of Attorney. A Durable Power of Attorney is a legal document in which a person (called a "principal") appoints another person (called the "attorney-in-fact") to manage the principal's financial affairs. A Durable Power of Attorney will automatically terminate upon the principal's incapacity under Texas Law unless it is durable, that is, unless it contains language to the effect that "This power of attorney is not affected by the subsequent disability or incapacity of the principal." A Durable Power of Attorney form may be located in section 490 of the Texas Probate Code, located in your local law library.

Who will make medical decisions for me should I become incapacitated?

By executing a Durable Power of Attorney for Health Care, you can appoint one or more persons whose judgment you trust to make your medical decisions should you be unable to do so yourself. You can give your agent complete authority to make medical decisions, or you can limit his or her authority. Without a Durable Power of Attorney for Health Care, an adult surrogate can consent to medical treatment on your behalf if you become incapacitated. The adult surrogate, in the following order of priority, is as follows: (1) your spouse, (2) an adult child, (3) your parents, (4) an individual identified to act on your behalf before incapacity, (5) your nearest living relative, or (6) clergy.

What is a living will?

A living will is a common name for a document entitled "Directive to Physicians." A Directive to Physicians allows you to direct that life sustaining procedures, such as use of a respirator, be withheld or withdrawn if two doctors certify in writing that you have an incurable condition and that death is imminent. A Directive form can be obtained from chapter 672 of the Texas Health and Safety Code, located in your local law library, or viewed in the "Directives to Physicians" section of this manual.

What is the difference between a Durable Power of Attorney for Health Care and a Directive to Physicians?

A Directive to Physicians has very limited application; it only applies to one medical treatment decision, the decision to withhold or withdraw life support when death is imminent. A Durable Power of Attorney for Health Care covers all medical treatment decisions.

What if I have a child or dependant with special needs?

Please see our section on special needs trust/supplemental needs trust.

Texas homesteads

Wed, 12 Jan 2005 16:43:54 GMT

Homesteads

What is a homestead?

In general, a homestead refers to certain property, such as a home or family residence, as defined by constitution or statute to be exempt from seizure or other forced sale. The amount and nature of the property that qualifies for the homestead exemption depends on whether it is rural or urban in nature. Homesteads may also be categorized depending on the purposes for which such property is used into either residential homesteads or business homesteads.

What type of property constitutes a rural homestead?

A rural homestead consists of property that is not located in a town or city. Under Texas statute, a rural homestead for a family is limited to not more than 200 acres of land, and a rural homestead for a single adult is limited to not more than 100 acres.

What type of property constitutes an urban homestead?

An urban homestead consists of property located in a town or city. Under Texas statute, an urban homestead may consist of not more than one acre of land.

What is the difference between a residential homestead and a business homestead?

A residential homestead usually consists of the family or individual's residence, together with the real estate and improvements on which the residence is located. A business homestead is a part of an urban homestead where the property is used as a place of business by the family or individual. In other words, an urban homestead unit may consist of both property that is used for a home (the residential homestead) and for a place of business (the urban homestead). Even though a homestead may exist in a place of business and in a home (although both places may be on separate parcels of land), both the business homestead and the residential homestead must be in the same urban area.

What are the advantages to claiming a homestead exemption?

A homestead is protected from a forced sale to satisfy any debt except for those liens for purchase money, taxes due, or work and materials used in building improvements on the homestead (provided such work and material have been contracted for in writing).

How long does the homestead exemption exist?

Property continues to be a homestead until the existing homestead is abandoned or conveyed, until another homestead is acquired, or until the homestead claimant dies without being survived by family members who are entitled to the homestead exemption. A divorce where there are no children will terminate a family homestead.

Are there tax exemptions or benefits I can claim on my residential homestead if I am aged 65 or older?

In Texas, a taxpayer who is disabled or is 65 years or age or older may be entitled to a tax exemption of $10,000 of the appraised value of the residential homestead from a school district tax. Such taxpayer may also be entitled to a tax exemption of not less than $3,000 of the assessed value of the residential homestead. Plus, depending on the taxing authority, a taxpayer may also be entitled to an additional tax exemption of a percentage of the appraised value (at least $5,000 but not more than 20 percent of the appraised value) of the residential homestead.

Independent Executor Rights and Duties

Wed, 12 Jan 2005 00:00:00 GMT

Independent Executor Rights and Duties

How do I administer an estate?

Each estate is, of course, unique. The information provided here is intended as a mere overview. It is by no means comprehensive. Both the estate's attorney and accountant should be involved throughout the administration of the estate, so problems can be identified and advantages taken of choices or opportunities that may be available to the decedent's estate.

What is an independent executor?

The independent executor is considered the personal representative of the testator who appointed him or her. In addition to serving as the representative, however, the independent executor also assumes a position of trust for all those who have an interest under the will.

What are the duties of an independent executor?

The primary duties of the executor are to collect and preserve the assets of the estate, to pay all debts and taxes, and finally, to distribute the remainder of the estate as provided by the will. Court supervision of these duties will be minimal in the case of an "independent" executor. Normally, after the initial admission of the will to probate, the only further court action necessary will be obtaining court approval of an inventory of the estate. This inventory is prepared and filed with the court by the independent executor with his or her attorney's assistance. Certain other required documents, such as notices to creditors and closing letters from taxing authorities, will simply be filed with the court.

A bank account (and possibly a money market fund or savings account) should be opened by the independent executor. It should be opened in the independent executor's individual name "as independent executor" of the decedent's estate. The bank will request a taxpayer identification number. The attorney or accountant will file an application for this number. Death certificates will be needed for a number of matters (insurance policies, social security benefits, federal and state estate tax returns). These can be obtained from the funeral home or the Department of Vital Statistics.

When does an independent executor have the right to act?

The independent executor does not become empowered to act until the court has admitted the will to probate and has appointed the independent executor. Therefore, it is normally advisable to begin the probate proceedings as soon as possible after the death. An application to probate the will is filed by the attorney, and a hearing will then be held 10 or more days after the application is filed. At that hearing, a personal friend of the decedent or a family member will give certain information to the court. If the independent executor is the person giving the information or is present at the hearing, he or she may take the Executor's Oath at the hearing, after which the court will issue "Letters Testamentary." The Letters Testamentary are evidence of the independent executor's authority and will frequently be requested by parties dealing with the independent executor during the administration of the estate. Additional letters can be obtained from the court at any time during the administration. If the decedent owned real property in another state, it will normally be necessary to take certain actions in the courts of that state as well. Avoidance of probate of real property in other states, could have been avoided with a living trust.

How does an independent executor evaluate the needs of the surviving spouse, children, or other beneficiaries?

The independent executor may need to discuss with the surviving spouse, children, or other beneficiaries, the financial condition and anticipated needs of the beneficiaries during the administration of the estate. After consulting with the estate's attorney and accountant, a schedule of the interim distributions can then be planned by the executor.

What about recordkeeping for the estate?

One of the most important and time-consuming responsibilities of the independent executor is to keep adequate records during the administration of the estate. This should begin almost immediately following death and be continued until the final distribution of the estate is made. It is absolutely necessary to begin the recordkeeping process promptly, since it is very difficult at a later date to reconstruct the financial affairs of the estate. The estate's accountant will be able to assist the independent executor in setting up the books and financial records for the estate.

What must be done to finalize the decedent's personal and financial affairs?

The independent executor should consider what needs to be done to finalize the decedent's personal and financial affairs. The following are examples of the types of activities the independent executor will need to undertake:

Arrange to terminate or alter services and deliveries supplied to the decedent, if necessary. The post office should be supplied with a forwarding address for the decedent's mail if appropriate. If there are credit cards in the decedent's name, attention should be given to terminating the credit, after considering any need for the surviving spouse to have access to credit cards. If services are necessary for the maintenance of real property, arrangements should be made for the services to be continued. The decedent's employer or business associates should be contacted. The independent executor may need to take steps to ensure that an active business keeps operating, or that a business be sold. The independent executor should also ascertain whether any death benefits or insurance benefits are available. The independent executor should notify the appropriate family members that they may be eligible for certain social security benefits or veteran administration benefits. A small lump-sum death payment may also be available to persons covered by social security. The social security offices prefer to deal directly with the persons eligible for benefits, and are usually quite helpful in this regard. Insurance policies should be located and delivered to the named beneficiary so the beneficiary can apply for the benefits. The policy and a certified copy of the death certificate should be presented with the claim. If the claim is mailed to the company, it should be sent by certified or registered mail. Before submitting any insurance policies for benefits, the independent executor should make a copy of the entire policy and all attachments, as they are frequently requested during the estate tax audit. The independent executor should determine whether it is advisable to continue various types of liability and loss of insurance coverage and, if so, take any steps necessary to continue such coverage.

If I am the independent executor, how do I prepare a preliminary inventory?

As soon as possible, you should make a general inventory of the assets and liabilities of the estate and present it to the attorney. This will give the attorney the ability to determine the approximate size of the estate and to identify any assets that may need special attention or that may be eligible for certain tax elections. In order to prepare the preliminary inventory, you will probably want to question the decedent's family, business associates, accountants, and attorney. You should also examine checkbooks, tax returns, financial statements, and the decedent's other business records. You should make a detailed inventory of all items in the decedent's safe deposit boxes before anything is removed.

The independent executor is required to file an inventory with the Probate Court. While this is due 90 days after the independent executor's appointment, it is normal for an extension to be requested so any property interest required to be included on both the estate tax return and the inventory is consistently described and valued.

How do I manage the assets?

As independent executor, you should collect the assets of the estate. Bank accounts and savings certificates can be transferred to the independent executor upon presentation of a certified copy of Letters Testamentary. The independent executor may request the assistance of a stock broker to aid in the transfer of the decedent's securities. Transfer agents usually require an Affidavit of Domicile and certified copies of the death certificate, will, and Letters Testamentary. If the decedent was the owner of the stock or assets of a closely held business or professional practice, immediate attention should be given to the decision as to whether the business or practice should or can be maintained by the estate. If the decision is made to sell, potential purchasers should be contacted and negotiations commenced before values decline.

When and how do I give notice to creditors?

Within one month after receiving Letters Testamentary, a notice to all creditors of the estate must be published. While the attorney will normally prepare the notice, it must be signed by the independent executor. In addition, within two months after receiving Letters Testamentary, the independent executor must give personal notice to secured creditors of the estate.

What about income tax considerations?

Most estates contain income-producing assets, which require the independent executor to file income tax returns for the estate. These returns are normally prepared by the estate's accountant after consultation with the attorney. In addition, a final income tax return for the decedent must be filed for the year in which he or she died. If the decedent was married, a joint return may be filed including all of the decedent's income up until the date of death. The independent executor should also be alert for the possibility of an income tax refund due the decedent and should apply for it if one is due.

An estate is not required to use a calendar fiscal year but instead may select another fiscal year. Substantial income tax savings and deferrals can usually be accomplished by a careful selection of the estate's fiscal year, so the estate's attorney and accountant should be called upon to make recommendations in this respect. This should be selected (or at least considered) early in the estate administration so that a short fiscal year can be selected if desirable.

The provisions of the 1986 Tax Act now require estates to make estimated income tax payments, although not until after the close of the estate's second taxable year. At the appropriate time, the independent executor will need to work with the estate's accountant in determining the correct estimated income for payment for the estate.

If the decedent owned any interest in any partnership, there are certain tax elections with respect to the basis of the property that should be considered. In some cases, additional tax benefits can be obtained if the partnership agrees to elect to alter the basis of the assets in the partnership with respect to the decedent's share.

Certain administrative expenses, such as executor's fees, attorney's fees, accountant's fees, appraiser's fees, court costs, expenses of preserving and distributing the estate, and expenses of selling property are deductible either on the estate tax return or on the income tax return of the estate. The decision as to how to derive the greatest benefits from these deductions will be determined by the independent executor, the estate's attorney, and the estate's accountant.

What about an estate tax return?

A federal estate tax return is due in many estates. If a federal return is required to be filed, a state inheritance return must also be filed. The estate tax return and the payment of any tax due is the duty of the independent executor. Normally, of course, the return is prepared by the estate's attorney working with the independent executor and the estate's accountant. Generally, it will be the independent executor's duty to supply the information needed to prepare the return.

The estate tax return is due within nine months from the date of death, unless an extension is obtained. An extension to file the return is generally available, although an extension to pay the estate taxes is rarely available. Thus, all estate taxes must generally be paid nine months from the date of death. There are some circumstances-e.g., where the estate owns a sufficient interest in a farm or family business or where the payment of the tax by the due date constitutes a hardship to the estate-in which the time for the payment of estate taxes may be extended. Relatively few estates will qualify for this, however. The independent executor should obtain approximate valuations of the assets as soon as possible, so a determination can be made as to whether assets should be sold to pay taxes and, if so, when they should be sold.

If the total value of all assets in the estate (before any deductions for debts and other expenses) is less than $600,000, no estate tax return is required. It is normally necessary, however, except in estates for which it is clear the assets are well below that figure, to proceed as if preparing an estate tax return so it can be determined that no filing is in fact required. In addition, it is important to have the information available should the IRS ever claim that a return should have been filed.

Since the estate tax return requires considerable information and documentation (such as appraisals) for its filing, it is necessary to begin gathering the information for the return as soon as possible after the death of the decedent.

When and how are distributions made from the estate?

The timing and nature of the distributions from the estate to beneficiaries will depend upon the financial condition of the estate (including the amount of any debts owed by the estate and potential tax liability) and of the individual beneficiaries, as well as the tax consequences of the distribution. Before any distributions are made, the executor should consult with the estate's attorney or accountant or both.

The IRS has an unrecorded lien on real property owned by the estate if an estate tax return must be filed. Particularly when the executor considers selling real property, the executor should consult the estate's attorney regarding this issue. A procedure is available to the Independent executor should he or she need to obtain a release of the lien either for distribution or a sale of the property. The release will be issued if, in the judgment of the district director, it will not jeopardize the ability of the IRS to collect any outstanding balance or potential deficiency. Because obtaining the release may take a few weeks, it is generally advisable to begin this procedure early if the Independent executor anticipates selling property.

Because a final distribution normally will not be made until after the estate tax return has been audited or the estate has received a letter stating no audit will be made, it is likely the surviving spouse or other beneficiaries will desire some distributions prior to the final distribution. In addition, for tax purposes it is usually desirable to make interim distributions.

Any distribution will have a tax effect, so no distributions should be made until the consequences of those have been discussed with the estate's attorney and accountant and the tax effects have been taken into consideration.

Texas Mental Health Commitments

Wed, 12 Jan 2005 16:49:22 GMT

Mental Health Commitments

What is a mental health commitment?

A mental health commitment involves a procedure whereby an individual who falls into certain categories as defined by the Texas Mental Health Code is placed in a mental health facility for treatment. The criteria to be considered in determining whether a person may be involuntarily committed are outlined below.

For whom may a person seek a mental health warrant for involuntary commitment?

A person may seek a warrant for commitment for:

someone who shows signs of mental illness or is a chemically dependent person; and
someone who shows a great risk of serious harm either to himself or herself or to others; or who without treatment, will continue to deteriorate to the degree that he or she will pose a danger to himself or herself; and
someone for whom the risk of harm is imminent unless immediately restrained; and
someone for whom these beliefs are based on recent behavior, acts, attempts, or threats.

What is considered mental illness?

The Texas Mental Health Code defines mental illness as an illness, disease, or condition that either: (1) substantially impairs the person's thought process, perception of reality, or emotional process, or judgment; or (2) grossly impairs behavior as manifested by recent disturbed behavior.

How do you seek a mental health commitment?

The application for a mental health commitment must be accompanied by an affidavit that indicates the person for whom the commitment is sought shows signs of recent disturbed behavior.

Who may seek a mental health commitment?

Anyone 18 years of age or older with personal knowledge of the person's recent disturbed behavior can sign the affidavit necessary for commitment.

Where should the affidavit be filed?

The affidavit should be completed and filed at the County Mental Illness Court.

What happens after the affidavit is completed?

A judge reviews the affidavit. If it appears to indicate mental illness, the judge signs an order for commitment, which is delivered to the constable's office. This order gives the constable the authority to pick up the person.

What happens when a person is picked up by the constable?

The constable will take the person to the mental health hospital where treatment has been arranged. A doctor must examine the person and complete a Certificate of Medical Examination within 24 hours, or if the 24 hour period ends on a Saturday, Sunday, or legal holiday, by 4 p.m. of the following business day.

Does a person who has been picked up on a mental health warrant have a right to an attorney?

Yes. That person is automatically appointed an attorney to represent him or her, although he or she still has the right to hire his or her own attorney.

What happens after the doctor's examination?

Based on the doctor's recommendation in the certificate, either the person is released or an Order for Protective Custody (OPC) is entered by the court. An OPC gives the hospital authority to hold the person until the court hearing.

Is a person entitled to any hearings while under an order for protective custody?

Yes. The first hearing is a probable cause hearing, which must be held within 72 hours of the date the OPC is signed. The second hearing is a final hearing, which is usually held within 7 - 10 days of the date the OPC was entered.

What is a probable cause hearing?

The probable cause hearing is held in the mental health hospital before the Master of the County Mental Illness Court. The purpose is to find out whether or not the person should be held at the facility until the final hearing. The evidence presented generally consists of the Certificate of Medical Examination and the affidavit of disturbed behavior. The person being held may waive the probable cause hearing if desired.

What is a final hearing?

The final hearing is held before a Probate Judge to determine if the person should be committed to a mental health facility. A second doctor must have seen the patient to complete a second Certificate of Medical Examination prior to the hearing. Both a doctor and either the person who filled out the affidavit or someone else who has knowledge of recent disturbed behavior must be present and testify at the hearing.

What happens after the final hearing?

If the court determines inpatient treatment is not necessary, the person is released from the mental health facility for recommended outpatient treatment or no treatment. If the court finds inpatient treatment is necessary, the person is committed to a hospital for treatment. The Order of Commitment will be for a period of either 90 days or one year.
Most mental health commitments are for 90 days. Most persons do not require the full 90 days of treatment, and may be discharged by the treating doctor at any time prior to that date, often in two to three weeks. If the person has been under a commitment for a minimum of 60 consecutive days during the preceding 12 months, the commitment may be for a period of 12 months. Once again, however, the patient may be discharged by his treating doctor at any time prior to the expiration of the 12-month period if the doctor believes further inpatient treatment is not necessary.

Texas Nursing Home Rights

Wed, 12 Jan 2005 16:51:10 GMT

Nursing Home Rights

Do I have any rights to care and comfort in a nursing home?

Absolutely. When you enter the nursing home you will be asked to sign an admission agreement, which is an important document that helps define the legal relationship between you and the home. Do not sign the document until you have read it thoroughly and understand its import. Also, upon entering the nursing home you will receive a written statement from the home detailing your rights as a resident of a Texas nursing home and the home's rules and polices. If you do not understand these rules and rights or you are too ill at the time of entry to comprehend their import, the home must provide these rules and policies to your next of kin or the person of agency that is responsible for your care. Each resident of a Texas nursing home must acknowledge in writing receipt of these rules and policies and the fact that he or she understands their import. If these rules and policies are ever changed, the home must notify you of the changes.

As a resident of a Texas nursing home you have the right to appropriate care, treatment, and services without prejudice of any kind. The law protects you from any type of mental or physical abuse. No one may restrain you with physical devices or drugs unless your physician has authorized such restraint for a specific period of time or restraints are necessary to protect you or others in an emergency.

You further have the right to receive adequate medical care from the home that will allow you attain or maintain your highest practicable physical, mental, and psychosocial well-being, as well as meals that meet nutritional standards. The home is required to develop a plan for each resident that sets out how the home will meet the individual's needs and requirements. Nursing homes in Texas are required to stay clean and livable. The home should also remain in a safe condition, i.e., floors should not have slick finish and laundry carts should not block hallways. You cannot be forced to perform work on behalf of the nursing home. However, you are more than welcome to perform personal housekeeping tasks if you so chose.

Do I have any rights to association as a resident of a nursing home?

Yes. You have the absolute right to see visitors and for them to see you. The home can have policies that determine the time, place, and manner for visitations. However, the home cannot deny you visitation with anyone. You also have the right to associate with people and groups both inside and outside of the home. The only manner in which your association rights may be limited is if your physician places a written visiting restriction order in your medical records after determining such visitations would be harmful to your health.

You have the right to participate in a religion by attending religious services or seeing your pastor or clergyman. You have the right to vote unless you are under a legal guardianship. If you cannot get to the polls, the home must assist you in providing transportation. You also have the right to form councils to discuss issues, complaints, and conditions of the home. These councils can relay complaints to the home's administration or to the Texas Department of Health or the Texas Department of Aging. A meeting place must be provided by the home for such meetings.

Do I have the right to privacy as a nursing home resident?

Yes. You have the right to personal privacy, private communication, and confidentiality in the nursing home. These privacy rights include but are not limited to the following:

right to privacy during medical examinations, treatments, consultations or case discussions;
right to private visits with your spouse (husband and wife have the right to live in one room unless a physician advises against it);
right to privacy as to your mail;
right to a telephone that is not a pay phone provided by the home (or you can put your own phone in if desired);
right to confidentiality concerning your medical records (and any medical information overheard by a nursing home employee must be kept confidential); and
right to keep and use your own personal property and clothing, although the home may limit the number of items a resident can keep for health and safety reasons. (The home must prepare a list of your personal items once you enter the home.)

Can the nursing home transfer me to another home?

Generally speaking, no. There are certain situations, however, which will lend themselves to such a transfer. They include:

Your physician says a transfer is necessary for your health and safety or that of others.
The home closes or no longer participates in the program that pays for your care (i.e., Medicare/Medicaid).
Your fees have not been paid (expect as prohibited by federal law); or
A Medicare or Medicaid review decides you no longer require the type of care the homes provides. If you are to be transferred based on nonpayment of services, the home must give you and your family 30 days advance notice. If the transfer is based on some other reason, the home must provide as many days advance notice as is practicable, but no fewer than 5 days is allowed. You do have the right to appeal the transfer or discharge. To do this, you should contact either an attorney or the local Long Term Care Ombudsman immediately upon receiving the notice of transfer or discharge. If one resident spouse is to be transferred to another facility, the home must inform the other resident spouse of his or her right to be transferred to the same facility. This spouse must give the home a written request for transfer.

What do I need to know about nursing home charges?

Once you enter a nursing home, you and any other persons who will pay for your care must receive a list of all the services provided by the home. The list must include which services are part of the basic rate and which services will incur an additional charge. This list must include charges for services not covered by Medicare, Medicaid, or other forms of health insurance. You and/or the persons paying for your care must receive a bill from the home at least once a month. You must be advised of any rate changes 30 days before the time in which they become effective.

Do I have the right to make a complaint against a nursing home?

Absolutely. You may complain to anyone without reprisal under the law. You also have the right to examine, upon reasonable request, the results of the most recent survey of the facility and their plan of correction.

How do I make a complaint against a nursing home for violation of my rights?

You can contact the Texas Department of Health or the Texas Department of Aging. Both agencies will investigate any complaint made. The Department of Health's toll-free number for nursing home complaints is 1-800-458-9858. The Texas Department of Aging sponsors 28 local area agencies on aging throughout Texas, each having at least one ombudsman on site. The toll-free number for the Texas Department of Aging's State Ombudsman is 1-800-252-2412.

Texas organ donation

Wed, 12 Jan 2005 16:53:20 GMT

Organ Donation

What organs and tissues can I donate?

Kidney - People on dialysis suffering from kidney disease may benefit from a transplant. A recipient of a kidney transplant will be given that chance to lead a more normal life.

Liver - Many children and adults suffering from severe liver disease will die without transplants. Donation gives them a second chance.

Lung, Heart or Heart/Lung - Many types of fatal heart and lung diseases can be treated successfully through transplantation.

Pancreas - Through pancreatic transplantation, diabetics can look forward to tomorrow without daily insulin shots and the possible loss of limbs, sight, or life.

Eyes - The cornea, similar to a contact lens, is the transplant tissue that covers the iris, the colored part of the eye. The cornea may be transplanted to restore sight to the blind.

Skin - A thin layer of skin, approximately 1/lOOth inch thick, may be donated and used as a temporary covering for burn wounds.

Bone - Bone is the most frequently used tissue. Bone plays an important role in curing birth and other defects and for back and dental surgery.

How do I get organs for transplantation?

Organs are donated by individuals at the time of their death. The circumstances of the death and the health history of the donor determine which organs can be used.

Who bears the cost for such donations?

Since organ and tissue donation are gifts there is no cost to the family of the donor. By law, no payment can be made to them. All of the expenses and costs for donor medical tests and organ recovery are incurred by the organ bank. However, funeral expenses must still be paid by the donor's family.

If I donate my organs and tissue, will this preclude me having an open casket funeral?

Absolutely not. Organ and tissue donation does not prevent persons from viewing the body or having a normal funeral service. Skilled medical personnel treat the body with the utmost respect and care.

Who will receive my organs and tissue?

Donees or recipients are determined be need, as well as by tissue and blood match.

Will there ever exist a conflict between saving my life and donating organs?

Absolutely not. There are strict legal guidelines that must be followed before death can be certified and organs removed. These particular laws preclude a physician who has declared a person dead from being involved in the removal of that person's organs or the transplantation surgery itself.

How can I declare that I wish to donate my organs and tissue?

Although there is no clear-cut manner in which to accomplish this goal, there are several things you can do. One is to sign a "Uniform Donor Card," which you can obtain from a local or national organ bank. The other method is to sign a "Statement Regarding Anatomical Gifts." Both statements should be discussed with your family or authorized representative so they are fully aware of your wishes. It is probably a good idea to discuss such donations with your physician as well.

What if I declare my intent to donate my organs and then change my mind?

That is perfectly fine and is your legal right. If you do change your mind after making such declaration, simply tear up the donor card or legal statement and relate such actions to your family and physician. You can always redeclare your intent to donate organs if you change your mind again later.

Texas Residential Services

Wed, 12 Jan 2005 16:55:16 GMT

Residential Services and Placement

What types of residential services and placement alternatives exist for seniors?

A wide variety of residential services and placement alternatives exist for seniors. They include senior centers, adult day healthcare centers, in-home services, retirement communities, assisted living, personal care homes, and nursing homes. Availability of these services will vary from area to area.

What are senior centers?

Senior centers offer daily programs (Monday through Friday) for senior citizens, which generally include a hot noon meal and a variety of social and health maintenance services, such as information and referral, recreational activities, and exercise programs.

What are adult day healthcare centers?

Adult day healthcare centers exist for dependent seniors who need supervision, but do not need to be placed in a staffed nursing facility. They provide nursing therapy, nutritional services, health monitoring, and recreational activities, with emphasis on giving the senior an opportunity for decision making on his or her own behalf. They are ideal for seniors who reside with family members who work during the day. Low-income individuals may also qualify for day care through the Texas Department of Human Services.

What are in-home services?

In-home services are designed to allow the senior to remain in his or her own home while receiving necessary services. Examples of such services are: primary family and home care which can include assistance with bathing, dressing, eating, cleaning the house, and doing laundry; home delivered meals; nursing services, including medication administration, injections, tube feedings, catheter care, skin care; physical therapy; occupational therapy; speech therapy; medical social work; emergency response services; and telephone visitors. Several in-home service agencies exist in the Dallas area including some with programs for low-income seniors.

What are retirement communities?

Retirement communities are apartments or residential facilities designed for retired individuals or couples who wish to live independently while sharing common interests and having access to supportive services, which often include congregate meals. Nursing care services are not usually offered. Some communities, however, do offer what is called Assisted Living or Personal Care Units, which is described in more detail below. Other services that are offered vary tremendously, but may include laundry; housekeeping; social, recreational, and cultural activities; day trips; transportation; exercise facilities; libraries; beauty/barber shops; and religious programs. Some retirement communities offer subsidized rent for qualified individuals.

What is assisted living or personal care units?

Assisted living or personal care units are special programs offered by some retirement communities, designed specifically for the frail but independent senior. Residents in such programs are provided services by staff members such as licensed nurses, personal care assistants, professional nutritionists, and social directors. Services may include dispensing medication; assistance with bathing, dressing, and personal grooming; and health monitoring.

What are personal care homes?

Personal care homes generally consist of residential homes for small groups of elderly or disabled individuals who require supervised living. These facilities usually have one or more care providers 24 hours a day who prepare meals, dispense medication, and assist the residents with bathing, dressing, personal grooming, and eating. They generally provide furniture, linens, and laundry service. Some facilities also provide transportation to and from doctor appointments.

Personal care homes are licensed by the Texas Department of Health. Funding for low-income residents of such facilities is available through various programs of the Texas Department of Human Services and the Mental Health and Mental Retardation Authority. Personal care homes are an ideal placement alternative for individuals who need supervised living, but do not require the level of care provided by a nursing facility.

What are nursing homes?

Nursing homes are the most familiar type of residential placement facility for seniors. They offer the most sophisticated level of nursing care short of hospitalization, but allow their residents to exercise less independence than other types of facilities. Nursing homes are licensed and monitored by the Texas Department of Health. Funding is available for eligible nursing home residents through Medicare and Medicaid.

How should I choose which type of facility is best for me or my loved one?

The most important consideration in choosing the appropriate residential situation for any senior should be allowing the senior the greatest independence commensurate with his or her mental and physical abilities, in addition to the usual factors to be considered such as cost, location, atmosphere, and compliance with all applicable licensing requirements.