Elder scams the next big financial crime

It was a story that had anything but a Hollywood ending: Eunice Bellah, the widow of the late Oscar-nominated television and art director Ross Bellah, was swindled by someone she trusted. According to news reports, Bellah’s longtime tax accountant, Aron Shalain, put her in a nursing home, took ownership of her house, and listed every one of her possessions on Craigslist before he allegedly fled the country. Her family was powerless to fight his actions, but has since sought legal action.

As Deadline reported in 2015:

“Everything” includes the mansion on Mount Olympus where Shlain’s ex-wife now lives and the expensive jewelry he says he bought her with the money he stole. Much of the rest of the money he stole was either squandered on his lavish lifestyle or lost in the stock market — or so he says.”

Financial abuse of the elderly is set to become a defining fraud of the next several decades; it’s the easiest scam out there, authorities say. Seniors have assets. And money. They usually own their homes. Combine that with issues like dementia and other health problems, and they are easy targets.

Many elderly men and women, if they even know they are being swindled, are unlikely to come forward. They are embarrassed, feel naive or stupid, and fear their adult children or other relatives will deem them unfit to do anything for themselves. Others aren’t even aware anything is wrong because those closest to them, people they love and trust, are committing the crimes. Even scammers from other countries are smart enough to manipulate an older person with the use of a family member – the Grandparent scam comes to mind – and thus they get away with it before anyone knows what is happening.

It’s hard to gauge how much money is stolen from seniors every year, because it’s so underreported.  At the low end, the elderly are taken for $2.9 billion annually, but that is likely “the tip of the iceberg,” Consumer Reports wrote.

At the high end men and women over the age of 65 lose an astonishing $36.48 billion annually in fraud by people they know and strangers on the phone. Either way, it’s a shocking, discouraging crime. Talk to a trusted elder care attorney about ways to protect yourself today.

Our experienced and trusted estate planning attorneys have been serving Treasure Coast families for decades, and Michael Fowler is one of only nine attorneys in the state of Florida who is double board-certified in wills trusts and estates and in elder law.  Contact us for your initial consultation at one of our conveniently located offices in Fort Pierce, Stuart, Port St. Lucie, Vero Beach, and Okeechobee.

Financial safety for older people

Everywhere you turn, it seems, there is a story in the newspaper, on the TV news or via a social media site like Facebook about an older person getting scammed. There are so many cases of fraud out there, from the grandparent scam to cemetery and mortuary scams.

Federal authorities have grown increasingly concerned about elderly men and women falling victim to scams. Statistics show millions have been lost every year, especially with the rise of the internet and social media.

The FDIC says people should look for red flags to protect themselves from con artists. Warning signs include:

  • An unsolicited phone call, email or other request that you pay a large amount of money before receiving the goods or services.
  • An unexpected e-mail or call requesting your bank account number, perhaps one asking you for the information printed at the bottom of one of your checks.
  • An offer that seems too good to be true, like an investment “guaranteeing” a return that’s way above the competition.
  • Someone expressing a new or unusual interest in your finances.
  • Pressure to send funds quickly by wire transfer.
  • The other party insists on secrecy.

Authorities remind elderly citizens to never, ever provide Social Security numbers, bank account information, PINs, passwords and other sensitive information in response to an unsolicited call, fax, letter, email or text message, no matter how genuine the situation may appear. Sign up for direct deposit of Social Security and retirement checks. An out-of-the-blue letter from the Social Security Administration or another agency indicating your direct deposit information has been changed is a sure sign of a scammer in action.

FDIC officials say families should also remember to research everyone who has access to an older person’s finances, including a financial advisor. Closely monitor credit card bills and bank statements. Having a power of attorney in place can help protect men and women from being victims of scammers. That person should be an adult son or daughter, or someone else who can be trusted with everything that involves money, investments, bills, bank accounts and the estate.

Our experienced and trusted estate planning attorneys have been serving Treasure Coast families for decades, and Michael Fowler is one of only nine attorneys in the state of Florida who is double board-certified in wills trusts and estates and in elder law.  Contact us for your initial consultation at one of our conveniently located offices in Fort Pierce, Stuart, Port St. Lucie, Vero Beach, and Okeechobee.

Preventing financial elder abuse

When beloved actor Mickey Rooney died in 2014 at the age of 93, he had only $18,000 in the bank, according to media reports. He said he had been a victim of elder financial abuse by his stepson and the stepson’s wife, claiming that the couple deliberately misled him about his own finances, used threatening and abusive language and refused him basic necessities, such as food and medicine. Rooney’s conservator sued, and secured a $2.8 million stipulated judgment against the stepson and his wife.

Financial elder abuse costs its victims nearly $3 million a year. Senior are most often likely to be abused by family members, but they also are victims of fraud and telephone scams.

The Elder Justice Roadmap, a 40-page federal report that includes interviews with 750 elder abuse experts, outlines five ways to prevent elder abuse. Here is a brief look at steps to take, as listed on Next Avenue.

“1. Awareness: The report calls for an increase in public awareness of elder abuse — a multi-faceted problem that requires a holistic, well-coordinated response in services, education, policy and research.

  1. Brain health: It also wants to see more research into brain health, with an enhanced focus on cognitive capacity (and incapacity) and mental health. These are critical factors both for elder abuse victims and for perpetrators.
  2. Caregiving: There should be better support and training for the tens of millions of paid and unpaid caregivers who play a critical role in preventing elder abuse, the Elder Justice Roadmap says.
  3. Economics: The authors want to see the costs of elder abuse quantified, particularly because this national problem includes huge fiscal costs to victims, families and society.
  4. Resources: The report says the nation needs to strategically invest more resources in services, education, research and expanding knowledge in order to reduce elder abuse in America.”

Caregivers, social workers, medical professionals and financial advisors need to be aware of the signs of elder abuse and know what to do if they suspect it.

Starting in 2018, securities firms will be required to try to take steps to do their part in preventing elder financial abuse, including obtaining contact information of a person who is trusted by the elderly client.

Our experienced and trusted estate planning attorneys have been serving Treasure Coast families for decades, and Michael Fowler is one of only nine attorneys in the state of Florida who is double board-certified in wills trusts and estates and in elder law.  Contact us for your initial consultation at one of our conveniently located offices in Fort Pierce, Stuart, Port St. Lucie, Vero Beach, and Okeechobee.

An elderly parents’ remarriage has implications for the entire family

Many people over the age of 55 remarry after their spouse dies or divorces them. According to the Pew Research Center, 67 percent of adults between the ages of 55 and 64 take the plunge again. At the same time, half of people older than 65 remarry. Men are more likely to remarry than women, the research shows.

But while remarriage can be a solution to loneliness, it can cause potential legal nightmares for adult children and other relatives when the husband or wife dies. A joyous wedding that likely brought two families together can divide the new spouse and the children from the first marriage when it comes to the deceased’s estate.

After actor and comedian Robin Williams died in 2014, his third wife and children from an earlier marriage battled in court over his watches, among other things. Williams had an organized estate plan, reports said, but had not included his personal items.

Estate planning attorneys and financial experts agree: If you plan to remarry, update your estate plan first. Lay out who you want to get everything – even mementos or small things you assume people wouldn’t want. Documenting every single asset is important. As long as the will shows the intent of the deceased, the courts are usually accommodating.

Before you remarry, you might consider an airtight prenuptial agreement. Most courts recognize a signed prenup even if the second or third spouse protests it after its creator has died. Most assets and finances in a remarriage shouldn’t be combined, anyway. Lay out that stipulation in your prenup, and don’t break it no matter the circumstances.

Some people choose to establish a QTIP trust as an option to protect adult children. A Qualified Terminable Interest Property trust rolls over the children’s assets into the surviving second spouse’s name so that he or she receives an inheritance. However, when he or she dies, the children from the first marriage are the beneficiaries, and will receive their share. An irrevocable living trust is also ideal because it cannot be changed once it is set up by the person before he or she dies.

There is a lot to consider when it comes to modifying your estate before your remarry. Protect yourself, your new spouse and your children. Contact an experienced estate planning attorney today.

Our experienced and trusted estate planning attorneys have been serving Treasure Coast families for decades, and Michael Fowler is one of only nine attorneys in the state of Florida who is double board-certified in wills trusts and estates and in elder law.  Contact us for your initial consultation at one of our conveniently located offices in Fort Pierce, Stuart, Port St. Lucie, Vero Beach, and Okeechobee.

 

The fate of your 401(k) when you die

Anyone who is working and has a 401(k) likely worries about it from time to time. They might check to see how it’s doing and wonder if they should be putting a bigger percentage of their paycheck in every month.

But you also need to think about the fate of your 401(k) when you die. It’s not always up to you, especially if you remarry after your first spouse dies or if you get divorced.

Federal law mandates that a married 401(k) account holder’s retirement plan goes to the person’s spouse if he or she dies. No ifs, ands or buts.

The law stems from a 1984 Congressional bill signed into law by President Ronald Reagan. He did it so that married couples wouldn’t be able to sign away survivor benefits for one another in the event there were problems in the relationship. Despite the benefits the law provides, it can cause headaches for some families. Let’s say a man remarried after his first wife died. After her death, he had named his three adult children as beneficiaries. He filled out all the paperwork and he thought had everything in order.

But after the man passed, his new wife successfully sued, claiming she was entitled to the money in his 401(k). The courts would side with her because of the rules outlined in Reagan’s federal law. The decision came despite the fact that the children were named the beneficiaries.

The law is clear when it comes to 401(k) retirement plan assets if a married participant dies. The spouse gets the entire account, unless he or she has specifically waived the right in writing. If an employee opts to take a retirement plan payout as an annuity, he or she must choose a plan that will continue lifetime payments to the surviving spouse equal to at least half of the original benefit amount.

If you plan to remarry, look at your estate plan and determine if it needs updating. An experienced Florida estate planning attorney can help you modify your plan as necessary and explain your options.

Our experienced and trusted estate planning attorneys have been serving Treasure Coast families for decades, and Michael Fowler is one of only nine attorneys in the state of Florida who is double board-certified in wills trusts and estates and in elder law.  Contact us for your initial consultation at one of our conveniently located offices in Fort Pierce, Stuart, Port St. Lucie, Vero Beach, and Okeechobee.

Top misconceptions about estate planning: Part 2 of 2

 

There are many myths about estate planning, probably because it’s something most people don’t like to thing about that much.  We’ve taken the top 10 estate planning myths that could prove detrimental to your family and will tell you why they’re not true; here are the second 5:

You don’t need a lawyer to create an estate plan.  A Consumer Reports investigation found that online resources to draft wills and other estate planning documents usually don’t work well for most people.  This is because everyone’s situation is different, and most online services don’t take this into account.  To create an effective Florida estate plan, you should consult with a Florida estate planning attorney.

You have to use a trust to avoid probate.  While trusts are a great way to avoid the time and expense of probate and keep your financial information private, there are other ways to avoid probate.  For retirement accounts, annuities, life insurance and bank accounts, you can avoid probate by listing beneficiaries for each account.  Florida allows you to add a payable-on-death designation to bank accounts and CDs and a transfer-on-death registration for securities.  Florida does not allow for transfer-on-death deeds for real estate or a transfer-on-death registration for vehicles.  For real estate, there is a deed known as a “Lady Bird Deed” that functions like a transfer-on-death deed and is available for Florida residents.

Trusts avoid estate tax.  Certain trusts can be used to reduce or even eliminate estate tax liability, but all trusts in and of themselves do not automatically provide protection against estate taxes.

My estate is too small to worry about.  That may be true when it comes to estate taxes since the current estate tax exemption is $5.49 million for individuals and $10.98 for married couples.  However, estate planning is about much more than protection against taxes — an estate plan also provides protection for you in the event of your incapacitation, allowing you to name people to make financial and healthcare decisions for you.

Gift taxes are due on gifts to anyone over $14,000.  Gifts to anyone over $14,000 simply reduce your lifetime gift and estate tax exclusion amount ($5.49 million in 2017).  You will only owe gift taxes once you exceed the entire exclusion amount.  You still have to file a gift tax return so the IRS (and you) can keep track.

If you’d like to learn more about how we can help you with your long-term care and Medicaid planning, please contact us for your initial consultation at one of our conveniently located offices in Fort Pierce, Stuart, Port St. Lucie, Vero Beach, and Okeechobee.

 

Top 10 misconceptions about estate planning: Part 1 of 2

There are many myths about estate planning, probably because it’s something most people don’t like to thing about that much.  We’ve taken the top 10 estate planning myths that could prove detrimental to your family and will tell you why they’re not true; here are the first 5:

Estate planning is only for the rich.  On the contrary, estate planning is not just about money.  It’s about who will make healthcare or financial decisions for you if you become incapacitated, who will take care of your minor children if you die unexpectedly, how your healthcare decisions will be made and much more.  Estate planning is for anyone who will eventually die – which means everyone.

Estate planning is only for the elderly.  Was Amy Winehouse “elderly” when she died at 28?  We all know stories of celebrities who died too young, many without a will or estate plan.  And many of their estates are still being fought over in the courts.  This happens every day to “regular” people as well.  You are never too young for estate planning.

The state gets your assets if you die without a will.  The state will not get your assets if you die without a will, but a state probate court will decide where those assets go, according to each state’s intestacy laws.  In Florida, a spouse and children take precedence; after that, assets will go to parents, siblings, grandparents, or any other living relative.  If no relation to you exists, your assets will go to the state.

Having a will avoids probate.  Having a will does not avoid probate; it provides the court with guidance on who you want to inherit your assets, but it is public record and can be contested, adding more time and expense to an already long and expensive process.  And if you own real estate in more than one state, each property may have to go through probate in the state where it is located.

You need a lawyer to draft a will.  If you have very few assets and a simple estate, you can create a will at little or no cost by using one of a number of websites that offer these services.  However, it is usually best to have an estate planning lawyer review your draft will to ensure it complies with state law and accurately reflects your wishes.

At The Estate, Trust and Elder Law Firm, P.L. we help our Treasure Coast clients develop and implement comprehensive estate planning strategies personally tailored to their unique situation, needs, and goals.   Contact us for your initial consultation at one of our conveniently located offices in Fort Pierce, Stuart, Port St. Lucie, Vero Beach, and Okeechobee.

Did you inherit an IRA? What you don’t know can hurt you

If you inherited an IRA from someone who wasn’t your spouse, there are steps you should follow or risk losing a big chunk of that inheritance.

Here are the steps you need to take to protect that inheritance:

  1.  Set up a properly titled inherited IRA and have the funds moved via a direct transfer. Do NOT have any funds sent to you by check or they will be considered a taxable distribution.  You must establish this account by Dec. 31 of the year after the account owner’s death.
  2.  You must take your first required minimum distribution (RMD) from the inherited IRA also by Dec. 31 of the year after the account owner’s death.  The distribution is calculated based on your life expectancy factor, which you get by taking your age as of Dec. 31 of the year following the account holder’s death and going to the IRS’ Single Life Expectancy Table in IRS Publication 590.
  3.  Obtain the prior year-end account balance in the inherited IRA.  For example, if you are calculating a distribution for this year, you would use the account balance as of 12/31/2016.
  4.  Divide the account balance by your life expectancy factor to arrive at your RMD for the year, which can be taken at any time during the year as long as it’s by Dec. 31.  For each subsequent year, you reduce your life expectancy factor by 1 to get the RMD calculation for each year.

Hopefully the IRA you inherited was set up to allow you to take the “stretch” option, so you can take RMDs over the rest of your life and save on income taxes.  If the default option on the inherited IRA was for a five-year payout, you are stuck with it and have to take all the funds over a five-year period.

If you miss an RMD, you can be penalized up to 50 percent of what should have been withdrawn – an expensive lesson in not planning properly.  

If you’d like to learn more about how we can help you with your estate planning, please contact us for your initial consultation at one of our conveniently located offices in Fort Pierce, Stuart, Port St. Lucie, Vero Beach, and Okeechobee.

Tips for valuing assets if you are over 50 and divorcing

Couples over the age of 50 are the fastest growing segment of the population to divorce – which can be disastrous financially if mistakes are made in dividing assets.  Here are some things to watch out for:

Understand the true value of retirement funds.  For many boomers, their retirement accounts can be their most significant asset.  The value of those accounts is not the balance, since withdrawals are taxed – experts say the true value is about 65 percent of the balance.  If one spouse takes the house and the other takes the retirement accounts, what looks equal on paper could turn out to be horribly lopsided a few years down the road.

Don’t overvalue alimony.  Alimony is often used to compensate for discrepancies in a couple’s income, but relying on monthly alimony payments gets much riskier after 50 since the chance of the payer dying is greater.  You may want to consider getting a life insurance policy on your ex as a precaution.

Don’t undervalue Social Security.  If you were married for more than 10 years, the lower income spouse is entitled to half the higher income spouse’s Social Security benefits once she or he turns 62 and is not remarried.  This should be figured into alimony negotiations.

Don’t forget the kids.  Couples who divorce later in life won’t usually have custody battles to deal with, but they may still want to protect assets for their children in case of their remarriage.  You can create a lifetime asset protection trust to protect your assets for your children, and keep them protected in case your children divorce.

If you’d like to learn more about how we can help you with your long-term care and Medicaid planning, please contact us for your initial consultation at one of our conveniently located offices in Fort Pierce, Stuart, Port St. Lucie, Vero Beach, and Okeechobee.

7 tips for crafting the estate plan you need

It’s important to design an estate plan that allows you to not only protect and build upon what you have, but to also keep others from fighting over assets after you’re gone.  The fundamentals of creating a solid estate plan include:

Get help.  Hiring a Florida estate planning attorney will ensure that your estate plan takes advantage of the ever-changing state and federal laws as well as reduces the potential for family feuds.

Select the appropriate personal representative and trustee.  Family members do not always make the best personal representatives or trustees.  Be sure your choices are those who are both willing and able to carry out the duties of an executor or trustee fairly and properly; if you don’t know anyone who fits this description, you may want to consider a professional fiduciary to handle those duties.

Talk about your estate plan with family.  While it may be difficult for you to discuss your estate plan with family members, informing them of the generalities and the reasons that guided your decisions can help stave off any family feuds.

Educate yourself on state laws.  Estate laws vary by state, which is another good reason to have a Florida estate planning attorney to guide you.  The Florida probate process can be lengthy and arduous; an estate planning attorney can help you and your family avoid probate, saving time and money.

Keep your estate plan updated.  Many life circumstances – remarriage, divorce, new children – impact your estate plan, so be sure you review it annually and keep it updated when things change.

Title your assets correctly.  Ensuring that all your assets are properly titled in a will or trust will help prevent legal challenges.

Build in some flexibility.  As tempting as it may be to “manage from the grave,” it is often better to build some flexibility into your estate plan so that beneficiaries can have some say – for example, on the distribution of personal property.

At The Estate, Trust and Elder Law Firm, P.L. we help our Treasure Coast clients develop and implement comprehensive estate planning strategies personally tailored to their unique situation, needs, and goals.   Contact us for your initial consultation at one of our conveniently located offices in Fort Pierce, Stuart, Port St. Lucie, Vero Beach, and Okeechobee.