Just For Daniel

I’m going to go through this one more time, just for Daniel Madera, because he’s almost as dumb as Karen Lee. They don’t get it.

Maybe I’m just not a good explainer. I have to consider that possibility.

But I frankly think they are just dumb.

Here’s Daniel’s hilarious little rant.

I’m not sure why Daniel refers to this piece as “particularly nasty.” I also don’t understand why, if Daniel bothered to read that piece, he didn’t get the point, but obviously he didn’t.

One other thing I’m going to nitpick about, and that’s Lisa.  Lisa didn’t “advise” me about anything.  She simply answered my questions about the use of straw names in real estate, and pointed me in the right direction to look up stuff about LLCs and why they were invented in the first place.  And really, you guys need to stop with the insinuations that Lisa somehow did something wrong and that’s why her law license is suspended.

On the little screen shot you provided it quite clearly says that Lisa has not paid her dues and that she has not met the CLE requirements (continuing ed).  Duh.  She’s retired.

Are you aware that former President and Mrs. Obama both have suspended law licenses?

I have a suspended nursing license.

I assure you that neither the Obamas nor I did a single thing wrong. We simply let our licenses expire because we knew we’d never work again in the field.  Or at least, I knew I wouldn’t. They, and Lisa, could reinstate their law licenses in a second if they wanted to, simply by paying the reinstatement fee. (It’s a wee bit more complicated than that, but that’s the basic idea. The exact wording and the exact series of steps to reinstatement are different in different states.)

Your insinuations, along with the insinuations that you are making regularly and often on your very public social media outlets about Richard Harris and everyone connected with Cleo’s estate in any way, are libelous.  Be aware of that.

But here’s the deal.

Daniel’s idiotic little scenario is not at all what I described.

Here’s what I said about it.

Prior to the establishment of the law allowing limited liability companies (LLC), people like Cleo often found themselves between a rock and a hard place.  If Cleo wanted to shield her farm, for instance, from being seized because a tenant in one of the Phildelphia properties fell down the back steps due to a rotten board and sued her for more than the property was worth, she could do that by incorporating the property in Philly.  So far, so good. Then if the tenant fell down the stairs, that tenant couldn’t sue for more than the Philly property was worth.

But incorporating would have created a problem.

Because the corporation was seen as a separate entity for tax purposes, that meant that when the tenant paid his rent, the corporation would have to file an income tax return and report that rental income and pay taxes on it.

And then when Cleo needed to pay Cathy’s tuition at the Christian school, and took some money out of the corporation for that purpose, that would create another taxable event. That money would be income to Cleo and have to be reported as such on Cleo’s tax return.

Double taxation.

What Cleo wanted was a way to limit liability and at the same time, make the IRS not “see” all those separate entities as separate, so she only paid income taxes once.

Nothing like that existed until 1977.

This isn’t even hard.  Seriously, it’s not.

Cleo was trying to limit her liability. Anyone who owns a small business today knows all about this. If you have any sense, you form an LLC for your business, so that if a customer falls and breaks his back in your store, your liability will be limited to the value of the business itself and any insurance you carry on it. The customer will not be able to take your business and your house and your wife’s new car and the savings account that holds your son’s college money.

That’s why they call it a “limited liability corporation.”

In practice, what Cleo did didn’t work out all that well, simply because the courts knew people did this and so did the lawyers and they’d just look and see that Cleo Smith paid all the taxes on that property and so Cleo Smith was actually the owner.  But it was the only choice she had at the time. Because it didn’t work very well, somebody invented the LLC.

If Cleo Smith had lived until 1995, she would likely have transferred all that rental property into one or more LLCs and protected it that way and then Cathy would have one more hell of a time trying to come up with something to accuse her about. But she didn’t.  LLCs were nonexistent before 1977 and even then, they were only available in limited places.  Cleo probably didn’t know there was such a thing.

We can argue all day about the morality of LLCs and whether corporations are people or not and whether Citizens United was a good decision or a very bad one and about whether or not corporate entities have skewed the legal system to benefit themselves and screw the little guy, but that’s a whole different conversation.

Cathy and her idiotic friends are trying to make Cleo into this terrible person that engaged in the most godawful shit you can imagine, based on almost nothing except Cathy’s overactive imagination.  She has implied for years and years that because Cleo used aliases, she was doing something illegal. She never says what exactly (except for her claim that Cleo ran whorehouses in Philly), but it was shady and bad, and therefore, everything else she says about Cleo has to be true.

Well, here’s a question for Cathy.

Exactly what did Cleo gain by using those aliases?

If her purpose was not exactly what Richard Harris said it was – to limit liability – what was the purpose?

What?  Be specific.  In what way did she defraud anyone, or hurt anyone, or do anything illegal?  Show me where it is illegal to use a fake name.  Show me the law.

What would have been her purpose?  How would it have worked?  Why did the probate court not bat an eyelash at the straw name thing?  Why did the probate court (as I’ll show later) question every little thing you can imagine, but never have a single question about those straw names?

Oh, and why did you bother with all those screen shots from here, but not bother to make the images large enough to be read?  You do that a good bit, don’t you?  You could just link here, you know, and it would all be available in nice big type and nice big images.  But then, of course, the newbies would come here and you don’t want that, do you?




11 thoughts on “Just For Daniel”

  1. I think Cathy is upset that she wasn’t given the farm, or that it was sold and she wasn’t given a pile of cash. She wants money, free and clear of any strings attached or questions asked.

    Something to consider, Cathy, is that the farm wasn’t yours. It was Cleo’s and she could dispose of it in any manner she desired. She didn’t have to leave you a penny. My parents don’t have to leave ME a penny either (although they tell me they have, for which I am grateful and hope not to collect for decades).

    I have no idea how the money that Cleo did leave to Cathy was bequested. It may have been in bonds, or CD’s (were they in existence in the late 1970’s?), or the stock market. Cathy has whined about the amount. Well, the stock market has grown since 1977 but it’s had downturns too. Maybe the money didn’t earn much interest, or she had the misfortune to have the stock market take a tumble just when she was due to be given her stipend. Doesn’t mean there is anything nefarious going on.


    Here you go, Cathy. Track what the market was doing OVERALL. Of course the money may have not been in a DJIA index fund. Maybe it was following the Russell, or the NASDAQ. If you think someone mishandled your money then you should have complained to the judge. Maybe you can still do so (I doubt it though).


  2. I remember that 1982 downturn. I was a minor and I was upset because it meant that I couldn’t go purchase any shares of IBM.

    Yeah, I’m a Democrat but that doesn’t mean I don’t invest my money.


  3. I would imagine that if she took the money she inherited and invested it, even in a very conservative way, she would have quite the nest egg now. After all she went to school during a time when tuition at state schools was very affordable and she was a young able bodied woman. It was easy back then to get scholarships and state aid or even to work part time and pay for school yourself. If she blew through her inheritance she has no one to blame but herself.

    As to inheritance, I agree with Tekla. No one, not even your parents, owe you an inheritance. It is a gift they may or may not choose to give you (and the state will give you if they don’t have a will). That’s why we have Last Wills and Testaments and Trusts (a form of keeping some control or protecting the assets from the grave). It was Cleo’s money and property, never Cathy’s, for Cleo to do with as she wished. If Cleo wanted to leave her property to the church or leave her property to a dozen cats she could.

    This was one of the hardest concepts to relay to some of the people who came to my office wanting to “sue the shit out of everybody who did inherit.” They would come storming in talking about how they had been “cheated out of what is mine!” I would show them the door while explaining it was never theirs. I often wondered if they finally figured that out after some other attorney happily took their money and they still never saw a penny of that “inheritance.” While there are successful suits regarding probate and inheritance they are few and far between, very expensive and there have to be a number of extraordinary and statutory/common law defined circumstances. Probate judges are very serious about upholding the wishes of the deceased when they are plainly known.


  4. I would imagine that if she took the money she inherited and invested it,

    I don’t think there was very much to that trust. Cleo wasn’t really wealthy at all. The will took about five years to probate and by the time it was over, a lot of it had been eaten up in fees. Furthermore, Cleo’s estate had been paying Cathy’s expenses all that time.

    I’ll get to all that soon.


  5. Even very little money invested in an index fund with a low expense ratio can yield good results. Cathy was young, able-bodied, and employed. The money could have been set aside for the future.

    I fooled around with some online calculators. Here’s an interesting result. If someone (Cathy) had invested $1000 in the NASDAQ on 7/1/2002 and reinvested the dividends (if any), that money would be worth $5627 today. I tried to find one that would go further back in time but no joy.

    This one is fun. I used $1000 in 1982, S&P 500 index fund and it would be worth $45,965.47 today. https://www.ifa.com/calculator/ I’m not suggesting anyone use any particular company, this is simply an example.

    Good point though that the money was being used to pay for her education. Well, graduating with little to no debt is a real gift. I hope she appreciated that fact. I doubt it.


  6. Oh, that’s right. I had forgotten. Still, the tuition was being paid by someone other than herself. Too bad she didn’t transfer somewhere and graduate.


  7. Too bad she didn’t transfer somewhere and graduate.

    She went back to PA after her first attempt and that’s when she got her LPN. Then she tried again, unsuccessfully. You couldn’t really transfer from BJU anywhere at that time. It was unaccredited.


  8. You couldn’t really transfer from BJU anywhere at that time. It was unaccredited.

    No reciprocity between the fundie schools? I’m a little surprised. Of course, I don’t even know how many there were in the early 80’s though as this sort of thing was nothing I’d experienced. I guess there were fundie families in the DC area, but we (my friends and I) never noticed them. Closest we had was an Irish Catholic family two streets over who had 7 or 8 kids and a Checker Marathon station wagon to transport the troops. That thing was built like a TANK. I was friends with the three eldest, the rest were just assorted annoying younger siblings.


  9. No reciprocity between the fundie schools?

    Well, yeah, but that would be a step down. BJU was the flagship school, the best fundy school academically speaking on the east coast. Cathy didn’t leave BJU because she objected to BJU. She left because for one reason or another, she couldn’t make it.


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