By E. Roberts Musser –
Asset Protection (for the benefit of the elderly loved one)
Thieves are far more sophisticated today, and scams are being perpetrated by legitimate companies. Class action suits were filed here in CA against a famous purveyor of electric beds for fraudulent sales practices. A settlement was reached out of court, but the questionable sales tactics continue unabated. Consumers will view a misleading ad on television or in a magazine, then naively call the telephone number provided to collect a prize. Suddenly a sales person will appear on their front doorstep. Once inside, the representative refuses to leave until the person signs the credit agreement for an extremely overpriced bed ($2000 – $10,000) the consumer can ill afford.
Seniors are especially vulnerable because they are the ones that generally have the money, may be forgetful, and often can become easily confused. Frequently the elderly are targeted for the sale of ridiculously inappropriate and costly annuities, that extend out to a term way beyond their life expectancy. Or hapless elderly folk are talked into obtaining sizeable reverse mortgages for needless “repairs” to the home.
Warn your elderly loved ones to beware and not take the bait, any time there are:
- Requests for advance fees or taxes
- Requests for money
- Requests for personal information
- Encouragement to take out a loan
- Strangers approaching in public
- Unsolicited phone calls, mail, emails, advice
- Fine print or confusing language
- Demand for an immediate decision
- Guarantees or promises
- Offers that sound too good to be true
Make sure proper legal documents are in place to protect assets for the benefit of your loved one, before s/he lacks legal capacity to sign paperwork:
- Will or trust – Wills are an appropriate way to transfer estate assets after death if the estate is worth $100,000 or less. If the estate is small ($20,000 or less), no probating of the will is required. If the estate is worth more than $20,000 but less than $100,000, an expedited probate is available. However, if the estate is worth greater than $100,000, a trust should be set up, so that probate is bypassed altogether. AB trusts are recommended for married couples, to maximize the estate tax deduction (doubles it). Nevertheless, be wary of “trust mills” – in seminar form – that provide “one size fits all” trusts.
- Power of attorney – Assigns an agent to make financial decisions when a person is incapacitated. Generally, be careful the power of attorney does not take effect unless/until the person is declared incompetent by a doctor. Even then, limit powers to simple transactions to pay bills. An exception to this general rule of thumb may be necessary if the person has early stage dementia or Alzheimer’s disease. Make sure whoever is assigned as the agent is trustworthy.
- Advanced health care directive – Assigns an agent to make medical decisions when a person cannot make those choices. The person’s agent, doctor and hospital/residential care facility/skilled nursing facility should have a copy of any advanced health care directive. The elderly person should discuss with the agent ahead of time what his/her medical preferences are.
Senior citizens have legitimate concerns about their investments in an economic downturn. Often dividends dry up, and the value of investments can decrease dramatically. There is virtually no opportunity to recover losses. Many of the elderly are on fixed incomes that do not keep up with inflation/cost of living. When one spouse dies, the surviving spouse’s portion of an existing pension can decrease by half, even though many expenses remain the same, e.g. property taxes. As difficult as it may be, talk frankly with your elderly loved ones about their financial situation. Sometimes families will pull together and supplement income where necessary. Downsizing to a smaller home is another possibility. Careful budgeting is essential.
More and more seniors are losing their homes to steep homeowner associations fee increases, a medical crisis, predatory lending, foreclosure scams, and even shoddy paperwork by banks who foreclose on property it does not own. Keep in constant contact with your elderly loved ones, and encourage them to consult with you before signing any paperwork or making any big decisions – as a safety precaution.
It is also important for the elderly to have appropriate health insurance. Medicare Part D plans are complicated. Comparison shopping and obtaining a suitable plan for particular medical needs is crucial. As times goes on, it is likely there will be less health coverage for greater cost. When budgeting, this phenomenon of ever increasing expense has to be taken into account.
Driving a car represents independence to the elderly. But there will come a day when driving skills begin to decline severely enough to warrant some careful thought. With no ability to get out and about, seniors can become lonely shut-ins. Would self-limiting help? Drive only during the day, not on the freeways, just in town to the grocery store or doctors’ appointments? How about a new car with the latest gadgets for safety: GPS systems like OnStar, backup and blind spot alarms? Or is it time for the adult child to report an erratically driving elderly parent to the Dept. of Motor Vehicles for the sake of everyone? This should be a last resort, but it is an option. Are public transit or paratransit options available? Check it out.
As an elderly person becomes more infirm, care giving of some sort may be necessary. If a couple is married, it may be their spouse who takes over the infirm spouse’s activities of daily living. If a person is single, importing in-home care is a possibility. Ultimately a residential care facility for the elderly or skilled nursing facility may be required. Whatever the case may be, constant contact with adult children is indispensable – as a safety net. With today’s new technology of laptop computers with built-in webcams, free video conferencing with a loved one is possible (skyping). Particularly for loved ones that live at a distance particularly, take the trouble to set up a system like this.
If one spouse becomes the caregiver for the other, keep an eye on the caregiver. A huge emotional toll comes with this burdensome task. Spousal abuse and even murder is not unheard of in such cases. There are programs for relief at churches, senior centers, or in and around the neighborhood. Look to your local senior center for assistance – they can tell you where to go for help. If you do not live close by and telephone your loved one, but repeatedly get no response, call the local police department and ask them to do a welfare check.
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As my parents have aged, both now being in their eighties and living on the East Coast, I have had to wrestle with all these issues and more. Old age can be a rough time, but adult children can make the transition much easier for their elderly loved ones if they look for the many pitfalls of old age. Peace and joy be with you and yours this holiday season…
Lesson to be learned: Don’t hesitate to start discussing issues such as asset protection, transportation and care giving with elderly parents. Better to stave off impending problems, so they never materialize or at least minimize their impact if possible.
Elaine Roberts Musser is an attorney who concentrates her efforts on elder law and aging issues, especially in regard to consumer affairs. If you have a comment or particular question or topic you would like to see addressed in this column, please make your observations at the end of this article in the comment section.