Issue No. 90
October 5, 2018
In this issue....

  • Houston Bar Poll Results: Dems Do Surprisingly Well
  • Let's Go to a Political Event This Week
  • 401k Magic Part 2: The 401(k) Account Balance Should Not Be Reduced Because of Taxes in Calculating the Value of the Account (Usually)
  • Democratic Judicial Candidate Profile: Linda Dunson

Reaction to "Hotze and the Judges" Articles

I heard from a lot of my readers about my two part series on Steven Hotze and our family court judges who gave him money. About 15 people (all from my 1,200 GOP activists email list) unsubscribed. But, I got about 43 new subscribers (almost all attorneys and news media).

Reactions e-mailed to me included:

  • [From a retired judge] I would have certainly disclosed my campaign's payments to a lawyer who appeared in my court.
  • Great job ! Keep giving them hell!
  • You are now being a propagandist. I just unsubscribed.
  • I commend your good work on this piece .  The public truly needs to know about this. Keep up the good work.
  • God bless you! Keep telling truth to power! 
  • Being an of counsel lawyer, Houston’s judiciary is not something I know that much about. But I am amazed at your continuing and prodigious efforts to gather information and to analyze it in detail. Your commitment to providing a public service comes with an element of political motive, but that is as it should be.... I’m spending a lot of time in Mexico and am tempted to the cowboy’s view of Texas that “the people there are all so strange.” But I still love it, and want to see it work toward a more balanced and productive political system.  Your article states “what a dangerous, mean bigot” Holze is, and that he is politically powerful and a “hateful bigot”. There is a fair amount of conclusionary assertion in your article. You go into amazing detail about how the money moves around. But I can’t really tell from the article why Holze is hateful or a bigot or dangerous. The article demands a lot of the reader. It is a lot of detail to absorb in one reading. At the same time, the reader is asked to accept conclusions that do not necessarily follow from the factual detail you assert [I think he read the second story in my series but not my first story which focused on Dr. Hotze's opinions].

Several Republicans sent me information to investigate on how politicians supposedly get payments to fund slate mailers without having to report their payments. I now have a few new avenues to explore.

All I want is a judicial system that is fair and above approach where political influence does not affect the outcomes of cases.
Time to Focus on What is Really Important in Life

Let's forget Kavanaugh and the November 6 election for a moment and focus on what is really important: college football.

Take this from a guy with a burnt orange car and office walls painted the same glorious color: The Red River Rivalry is on Fox Saturday at 11:00 a.m. and O.U. still sucks.
I may not win every case (even if in my heart I expect to). I just want an efficient system in which my client gets a fair hearing before a judge who works hard, knows the law, and does not play favorites. I also expect judges to appoint qualified amicus attorneys who zealously look after children (and who actually personally visit their minor clients in their homes). Is that asking too much? Stay tuned.
Greg Enos
The Enos Law Firm
The Enos Law Firm
  17207 Feather Craft Lane, Webster, Texas 77598
 (281) 333-3030
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Houston Bar Poll Results: Democrats Do Surprisingly Well
The results of the Houston Bar Association Judicial Preference Poll are in. The races where the Democratic candidate won are highlighted in yellow.
Incumbent Judges Prine and Schmude were almost tied with their opponents, which is almost a victory for those Democrats. Judges Farr, Moore, Dean and Franklin-York got 60% or more of the attorneys' votes. Those kind of numbers are big enough to get past partisanship among lawyers and reflect a judgment of how well those judges do their jobs. The opposite is true for Judges Lombardino and Gooden, who clearly are not too well thought of by family law attorneys. The stench from two juvenile courts, where the political connections of lawyers are more important than the welfare of children, is reflected by the dismal ratings given to Judges Devlin and Phillips.

HBA preference poll results have little impact on how actual voters behave. In Harris County, the results of judicial races are decided at the top of the ballot, not by what attorneys think of their judges. Remember the 2016 HBA poll results?
Let's Go to a Political Event This Week
Beto O'Rourke is coming to Houston Monday night and the White Oak Music Hall is likely to be filled to capacity. Some really good musical groups and Houston celebrities will join the candidate on stage. Meanwhile "Reptile Space Alien in Human Costume" Ted Cruz will be speaking to 40 or so older white folks in Huntsville. The enthusiasm gap in Houston is enormous for this election and there is nothing our Republican judges can do about it.

Here are some other political events you should consider attending this week:
Family law attorneys may seriously consider attending this event for the Democrats running for family courts, given the growing belief there will be a "blue wave" this November in Harris County. A long-time Harris County Republican Precinct Chair told me yesterday he expects every single Republican to lose on November 6 in our county.
401k Magic Part 2: The 401(k) Account Balance Should Not Be Reduced Because of Taxes in Calculating the Value of the Account (Usually)

In a divorce, the trial court usually should not reduce the value of a 401(k) plan (or other pre-tax retirement account) because the asset has not yet been taxed. When a worker and his employer contribute to the worker’s 401(k) retirement account, the contributions are not taxed. The money is invested and only when the worker makes a withdrawal are the funds taxed. Under current law, 401(k) funds are subject to an additional 10% penalty if withdrawn before age 59.5. 

Texas Family Code Sec. 7.008 states:

    7.008. CONSIDERATION OF TAXES. In ordering the division of the estate of the parties to a suit for dissolution of a marriage, the court may consider:
      (1) whether a specific asset will be subject to taxation; and
      (2) if the asset will be subject to taxation, when the tax will be required to be paid.

Sec. 7.008 does not say a court can or should reduce an asset’s value because it is subject to taxation. Sec. 7.008 only says a court may consider if an asset is subject to taxation and when the taxes would be due. In the case of a 401(k), the funds are taxed only when withdrawals are made. One idea behind 401(k) accounts was that retirees receiving 401(k) withdrawals would be paying a lower tax rate because they earn less in retirement. A 58 year old man who is awarded half of his wife’s 401(k) pays no taxes at the time of divorce. Years later, when he starts to withdraw that money, he would pay taxes, but presumably at a lower tax rate than he pays now. Of course, tax rates change and there is no way of knowing when the spouse would withdraw the 401(k) funds or what tax rate he or she would pay then. A husband who in 2018 earned $170,000 and was in the 32% tax bracket may not be in the 232% tax bracket when he is 65 in 14 years.  But, he might not even start withdrawing money until he is 70 (mandatory minimum withdrawals are required at age 70.5). At that age, the husband may well be in the 12% tax bracket because he earns so little in retirement. How could the trial judge possibly know now what tax rate to apply to the 401(k) balance or when it would be withdrawn?

It seems to me that the best approach is to do what the vast majority of divorce lawyers and judges do – consider the entire 401(k) balance and do not reduce it by some speculative income tax rate. The only exception should be a case where you know the spouse must cash in the 401(k) immediately upon divorce, for example to pay off the mortgage on a house she cannot otherwise afford. If the divorce occurs in 2018 and the wife intends to withdraw the $62,000 in 401(k) funds she is to be awarded that year, the divorce judge will know her tax rate under current law and the judge will know the wife is not really getting $62,000.

This does not mean that a divorce judge cannot consider tax implications in determining a fair and just division of the community property (or in comparing the husband’s separate property to the wife’s separate property).

Consider this example: the community estate consists of a checking account, a 401(k) account and a truck.

Scenario 1 is the analysis that should be used in the vast majority of divorces. Scenario 2 would be appropriate only if it was very certain the 401(k) would be cashed in right after divorce. Otherwise, the trial court would have no way of knowing when the funds would be withdrawn or what tax rate would be owed at the time of withdrawal.

However, Sec. 7.08 says the trial court may consider the fact that an asset is subject to taxation. In this example, if the husband were awarded the checking account and the truck (total value $30,000) and the wife were awarded the 401(k) (current statement value $30,000), would it be a 50-50 division? The checking account and the truck are after taxes and the 401(k) is before taxes. A trial judge could never exactly calculate what taxes will eventually be paid on the 401(k), but she might reasonably say this is not really a 50-50 split. So, the judge might well decide it would be more fair to split both the checking account and the 401(k), that way each spouse would be awarded some before tax dollars that can be spent now without any tax consequences.
Democratic Judicial Candidate Profiles:
Linda Dunson, Candidate for 309th District Court
We already know our Republican judges and so I am introducing my readers to candidates they probably are not familiar with. I urge you to meet these candidates yourself and form your own opinions.
Linda Dunson is running against Sheri Dean for the 309th District Court. Dunson grew up in Huntsville, the fourth of six children. Dunson's resume (which says her name is "Dr. Linda M. Dunson") says:

I am the only child in my immediate family to attend college and the first generation to attend and graduate law school. I grew up in a very "economically poor" and racially segregated community. Most of the homes in my neighborhood were clapboard and unpainted. My mother taught me that being poor was never an excuse not to do my best.

Dunson graduated from the University of Houston with a B.S. in psychology and sociology and graduated the Thurgood Marshall School of Law in 2001. Dunson was Articles Editor for the TMSL Law Review . Dunson got a L.L.M. in taxation in 2009 from the University of Houston.

Ms. Dunson was in solo practice for six years handling family, criminal, probate and other matters. She then became a staff attorney for the Houston branch of the NAACP for two years. Dunson directed the pro bono clinic and handled family cases. She returned to her private practice in 2010. Dunson has participated in many bench trials, she says, but no jury trials. She had handled cases in outlying counties, but in Harris County I found her name associated with 153 family law cases as attorney of record, most of which were "waiver divorces." Lately, Dunson has also handled quite a few property tax delinquency cases.

Dunson is divorced and does not have children. Linda has served on the Houston Bar Association Aids Outreach and Elder Law committees. Attorney Dunson has volunteered with fundraising efforts for members of the Houston Miracle Network Telethon and Rainbow Coalition /Operation PUSH Wall Street project. She has been involved in her community by working with the Interfaith Hospitality Network homeless shelter, NAACP Voter’s registration, Election Protection, Child Advocates of Harris County and the Houston Lawyers Volunteer Lawyers Program.  
Ms. Dunson provided me this statement about why she is running:

I have always been a person who stared "Justice" in the face and challenged its inconsistencies. I often say that Justice should not be blind so that she can see what truly is, then things may be different.

Justice is blindfolded; I am not. Since becoming an attorney, I've had the opportunity to see injustice come into fruition in a lofty place, the courtroom- the Harris County Family Courts in particular. I have seen both lawyers and litigants be disrespected; I have witnessed inefficiency and lack of integrity; I have witnessed biases based on gender, race, ethnicity, sexual orientation; and, I have seen cultural insensitivity when determining the best interest of children. The aforementioned are only a few of the glaringly non-judicial like conduct spewing from those wearing the black robes in the Harris County family courts. That is why I am running as the Democratic Judicial Nominee for the 309th Family District Court . I believe that everyone who comes before the court should feel that they have been heard and that whatever decision rendered, whether favorable or unfavorable, has been fair, just and impartial without prejudice or discrimination. I want to restore respect, dignity, integrity, and impartial justice to the family court bench.

Click here to view her campaign web site.
Thank you for your support! Together We Can Make Our Profession Better and Our Courts More Fair
Attorney Greg Enos has been through his own divorce and child custody battle (he won) and understands what his clients are going through. Enos graduated from the University of Texas Law School and was a successful personal injury attorney in Texas City before he decided his true calling was to help families in divorce and child custody cases. Greg Enos is active in politics and in Clear Lake area charities. He has served as President of the Bay Area Bar Association and President of the Board of Interfaith Caring Ministries. The Enos Law Firm serves clients in Galveston County, Brazoria County and Harris County, Texas.
Greg Enos
Board Certified in Family Law, Texas Board of Legal Specialization
The Enos Law Firm
www. divorce
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