With living trust scams on the rise both nationally and in Georgia, many seniors are being tricked into buying costly and unnecessary financial products which jeopardize their long-term security. As an elder law attorney in Marietta, I want to expose these scams for National Consumer Protection Week (ncpw.gov).
Preying on loneliness and a common fear of the unknown among seniors, scammers and unscrupulous salesmen in the US and in Georgia have found a new way to defraud seniors out of thousands of dollars: living trust scams.
March 6-12 is National Consumer Protection week and as a Marietta elder law attorney, I am taking this opportunity to warn seniors of these costly living trust scams in the metropolitan Atlanta area.
Don’t get me wrong: Living trusts can be an excellent estate planning tool to avoid probate and ensure your wishes are honored after death, but they are not a one-size-fits-all document and certainly not right for everyone – especially seniors on fixed incomes with limited assets.
Yet through public seminars, phone, mail and door-to-door campaigns, seniors are being contacted by salesman outside of the legal field who offer to living trusts as the solution to all of their fears and financial worries.
High-pressure tactics such as gifts, companionship and exaggerations about death taxes and probate are used to make seniors believe that their assets will be tied up in court indefinitely and that their loved ones will be on the hook for thousands of dollars in taxes and legal fees after their death.
What the salesmen fail to tell these seniors is that they probably won’t even owe estate or ‘death taxes’ after their passing. Worse is that many of these “trust kits” sold to seniors only contain boilerplate language and really do nothing to avoid taxes or the probate court. The real goal of the scam is to gain access to the senior’s financial information through the Trust Kit so they can be railroaded into buying additional annuities or insurance products the senior does not need.
According to an AARP study published in 2000, about four million people older than 50 with less than $25,000 in annual income may have purchased costly, unnecessary, and potentially dangerous living trusts as a result of high-pressure sales tactics by firms falsely representing themselves as AARP affiliates. These numbers will continue to grow as seniors remain fearful about growing taxes and their future financial security.
To avoid becoming the victim of a Trust Scam, seniors should always shop around and check with a qualified estate planning lawyer before deciding on any type of will, trust or financial product such as an annuity or long-term care insurance plan. I also recommend that seniors:
- Never sign anything with options or terminology that you don’t understand.
- Don’t give into high-pressure tactics such as gifts, nagging phone calls, and limited-time offers.
- Verify any stated affiliations with senior organizations or government agencies. (Note: due to the high rate of senior trust scams, the AARP does not endorse ANY company that sells living trusts.)
- Know your rights under the FTC’s “Cooling Off Rule”. If you purchase a living trust in your home or any place other than the seller’s permanent place of business (such as a hotel seminar), you have three business days to cancel the deal.
For additional tips on how to avoid financial scams for National Consumer Protection Week, visit the government’s official website at ncpw.gov.
As a sandwich generation kid himself, Steve (Stephen M.) Worrall KNOWS the struggles you are facing as you raise children, balance the demands of your job, and take care of your aging parents, too! You can reach him at 770-425-6060 or firstname.lastname@example.org.
As an elder law attorney in Marietta, I find that certain questions are asked of me over and over again. One area that sometimes requires explanation is the difference between guardianships and powers of attorney.
Guardianships for Elders
Guardianships come into play when an adult experiences some sort of issue that leads to a mental disability. Elder lawyers see this type of situation in regards to the onset of dementia, for example, but there are other causes, such as a brain injury. If the elder adult is unable to make responsible decisions for himself or herself, the courts can appoint someone to make them instead. “Guardian” is a common term for this position, but it may also be referred to as a “conservator.” The person for whom the decisions are now being made is often called the “ward.”
A guardian is typically authorized to make most of the important decisions for the ward regarding things like health care, finances, and legal proceedings. There are times, however, when the guardian may need to obtain court approval before their decisions become final. Additionally, it is possible for there to be a “conservator” in charge of finances and a “guardian” in charge of other types of decisions.
Guardianships are not something that are handed out lightly. Having one’s independence handed over to another is profound, and therefore elder lawyers work with the family to exhaust other options first.
Powers of Attorney for Elders
A senior will often find that they have more freedom when they choose to give someone power of attorney. The power of attorney is similar in that it gives another person the right to make decisions in case of incapacitation, but it is more restrictive. For example, the elder lawyer may be directed to draft the power of attorney to only allow the “agent” to have control over certain types of decisions. (Again, healthcare, finances, and legal are some of the more common areas covered.)
Powers of attorney can be limited, too. For example, if a client is going to be out of town while a legal transaction is taking place, they might direct their elder lawyer to give a third party the power of attorney to represent them. Or, they may only give the agent power of attorney for certain activities, such as signing checks to pay monthly bills.
Comparing the Two
One of the biggest differences between the two is that the agent with a power of attorney is chosen by the individual, whereas a guardian is appointed by the courts. When a senior works with a Cobb County elder lawyer to draw up the power of attorney, they are able to choose someone they trust to have their best interests in mind. On the other hand, when the courts choose a guardian, they will be using legal precedence rather than considering what the senior would prefer.
If you have other questions about estate planning, probate or elder law issues, please call us at 770-425-6060.
According to Marietta elder law attorney, Steve Worrall, Alzheimer’s and Dementia awareness week (February 14th –21st) is the perfect time to have ‘tough conversations’ with aging parents about their wishes and plans should the disease ever strike.
Marietta, Georgia –
“Does mom want to live in a nursing home?”
“Does dad consider living with Alzheimer’s or Dementia to be quality of life?”
“Is there legal documentation in place that ensures someone can act financially on mom or dad’s behalf if they are unable to?”
These are just three of many questions that experts are urging adult children to ask their parents during Alzheimer’s and Dementia Awareness Week (February 14th– 21st). Without the answers to such questions, families could be left battling over long-term care, struggling financially and not truly honoring their parent’s wishes should the disease unexpectedly strike.
“So many families avoid talking about Alzheimer’s or Dementia until it’s too late,” says Marietta elder lawyer, Steve Worrall. “Especially from a legal standpoint, if you don’t know your parents’ wishes or the documentation they have in place, you could be left with a huge mess on your hands in the wake of this debilitating disease”.
According to Worrall, there are 5 specific conversations adult children should have with their parents as soon as the opportunity presents itself. They comprise the following:
1. Long-term care preferences– Does mom or dad want to live in a nursing home or would they prefer in-home care if the need presented itself? If they prefer a facility, what amenities and activities are important to them at this point in their life? These are questions that if discussed in advance can make the transition into an assisted living facility or a home-health care program much easier on everyone when the time comes.
2. Current Legal Documentation– It’s imperative that adult children find out what legal documentation their parents have in place before incapacity occurs. This includes making sure their parents have a power of attorney, health care directive and HIPAA forms so someone can easily step in to make financial or medical decisions on their behalf. Otherwise the family will be forced to petition a court for control over their parent’s affairs if they have passed the point of legal capacity.
3. Medical Preferences and Wishes– Adult children are urged to find out what type and how much medical care their parents want after receiving a diagnosis of Alzheimer’s or dementia. Do they have specific wishes about life support or other end-of life medical treatments? Who do they want to make such decisions on their behalf? The answers to these questions will help your parents to feel secure knowing their wishes will be carried out during an otherwise emotionally-charged time.
4. Current state of financial affairs- To ensure finances stay properly managed after a diagnosis of Alzheimer’s or Dementia, adult children should use this week to start asking tough questions about their parent’s financial affairs. This includes finding out the location of any safety deposit boxes, bank accounts, investment or brokerage accounts, outstanding debts or other assets unknown to the family. Otherwise, necessary assets needed to cover long-term care or other expenses could be overlooked when memory loss ultimately occurs.
5. Important contacts and information– While their memory is sharp, adult children should work with aging parents to compile a list of important contacts and information that will be useful to the family if memory loss occurs. This includes documenting key doctors, professional advisors (ie. accountant, attorney, financial advisor) and important passwords for online accounts.
“While these conversations are certainly not easy to have, families can make the transition into living with Alzheimer’s or Dementia much easier by simply planning ahead,” says Worrall. “Not to mention, mom or dad will appreciate your willingness to make sure their wishes are honored if and when incapacity occurs”.
By Steve Worrall, Marietta Elder Law Attorney
If you watch television at all, you can’t miss the increase in ads for Medicare prescription drug coverage.
What you might not know is that the open enrollment period for this coverage expires December 31st.
If you (or your parents) are eligible for Medicare, you need to take advantage of this coverage now or you’ll pay more for it later.
Space does not allow us to break the whole plan down for you, but here’s some information to help you sort out your options.
What Is The Medicare Prescription Drug Plan?
Medicare Part D allows people covered by Medicare to buy additional insurance coverage to help them pay for their prescription medications. Medicare works with various insurance companies to provide this benefit and it’s available to everyone with Medicare regardless of income, your medical conditions or how much your prescriptions cost.
Where To Go For Additional Information
As with most government programs, the Medicare Prescription Drug Plan can be confusing. The following resources are available to help you sort out the best plan for your needs:
www.medicare.gov – This is the official site for people covered by Medicare.
Medicare & You – This is a brochure containing information about various prescription drug plans, how to compare the plans and how to apply for extra assistance.
www.medicare.gov/MPDPF/Home.asp – This is an online tool that helps you compare various plans side by side to decide which plan will work best for you.
www.yourpharmacybenefit.org – This website was created to help people make the best use of their prescription benefits.
www.mymedicarematters.org – This provides basic information on Medicare and what it covers so you can decide what, if any, additional coverage you need.
www.benefitscheckup.org – This website is provided by the National Council on Aging and gives information on any changes to the eligibility requirements and what Medicare actually provides. You may be eligible for benefits you aren’t even aware of.
All of these resources are available, free of charge, on the internet. If you have any additional questions, contact Medicare directly at 1-800-Medicare to speak with someone who can help you, one on one.