Month: April 2016

Senior Scams are Serious

MP900407501Deseret News recently published an article, "How to prevent your elders from being targeted by a financial scam," that quoted Kathleen Quinn, executive director of the National Adult Protective Services Association, labeling elder financial abuse "rampant, largely invisible, expensive and lethal."

Likewise, a recent study by True Link Financial estimated the problem costs more than $36 billion every year. But these statistics may be low because elder financial abuse crime frequently goes unreported. Victims can be too embarrassed to admit they've been swindled, or they just don't know how to get help.

To help protect an older loved one from elder financial abuse, become familiar with the more common types of scams:

  • Telemarketing often involves the elder making a purchase over the phone or making a donation to a charity;
  • Medicare and health insurance fraud happens when a con artist poses as a Medicare or health insurance representative and asks for personal or payment information for a fraudulent invoice; and
  • Internet fraud is where legitimate-looking emails ask for money or personal information.

Here are a few other important ways to guard against potential elder financial scams.

Don't answer calls from numbers you don't recognize to help avoid spoofing and telemarketers. If a call appears legitimate and appealing, the senior should ask if the organization is licensed, as each state has licensing requirements for the sale of financial products and insurance. Although many legit salespeople offer to meet clients in their home, all strangers should first be fully vetted. If someone who reaches out to you agrees to a meeting, bring along a trusted adviser. If the solicitor balks, end it right there.

If you think you've been targeted for some sort of scam, take quick action. Contact the police, the bank, the brokerage company, or other financial officials. Many times they can intervene before a thief can access the money, or they can at least limit the damage.

Reference: Deseret News (March 8, 2016) "How to prevent your elders from being targeted by a financial scam"

Planning your Financial Future after a Second “I Do”

MP900309088Are you thinking of getting remarried? You're not the only one. In 2013, 40% of new marriages included at least one partner who had been married before, and two in ten new marriages were between people who had both previously been married, according to a 2014 study.

But's article, "Getting remarried? Get a financial plan first," says that many folks do little planning, and that ends up increasing the conflict and chaos that often occurs down the road when "death do us part."

Most don't get that marriage automatically gives significant rights to the new spouse. They've never heard of spousal elective shares or homestead rights, and have not thought of the effect of their remarriage on their estate when they die.

For example, in some states, the rights that a spouse automatically gains upon marriage may include:

  • The right to be the guardian for the other spouse;
  • The right to be the personal representative of a deceased spouse;
  • A right to an "elective share" percentage of the other spouse's estate;
  • A right to the ownership or use of the house;
  • A right to personal property of the deceased spouse, including heirlooms;
  • An automatic right to be a beneficiary of the deceased spouse's ERISA accounts; and
  • A right to be supported under state filial support laws.

The simple fact is people just don't like dealing with these issues, whether it's their first marriage or their fifth time around. But if you plan on getting remarried, or already have, here are some of the things to keep in mind:

Consult an expert. State laws vary, and people thinking of a remarriage should meet with a qualified estate planning attorney to understand what their rights are and how to handle those rights and powers.

Get a prenuptial. Folks getting remarried should think about getting a prenuptial agreement, especially if they have a home or business they want to pass to their descendants from an earlier relationship or if each spouse wants to retain the right to pass on their personal investments and property to their respective descendants. Once married, if a new spouse dies without a prenuptial agreement, the surviving spouse will get to inherit what state law allows (a spousal right of election). Even if the deceased spouse leaves assets to children from a prior marriage, it won't fly without a waiver of the spousal right of election—a document which is frequently signed in conjunction with a prenuptial agreement.

Get your fair share. There are two ways in which a surviving spouse can get an intestate share of a deceased spouse's estate. First, if a married person dies without a will, then the surviving spouse is entitled to a share of the estate—generally limited to the intestate estate; and if the decedent leaves no descendants, then the surviving spouse will usually get 100% of the intestate estate. Where you live matters: in some states, the surviving spouse gets a minimum dollar amount or minimum percentage of the intestate estate, even if there are surviving descendants or surviving parents. Second, in most states, if the decedent's will existed before a marriage and was not made in contemplation of the marriage, the new spouse is entitled to an intestate share of the estate.

Reference: (March 10, 2016) "Getting remarried? Get a financial plan first"

Practicing Your Estate Plan Makes Perfect

MP900422593When your loved ones have to administer your estate and see that your wishes are carried out, it's critical to be organized and to let them know in advance what they will need to do.

According to the Southeast Missourian's article "Get it together: Organizing your estate now will ease the burden on loved ones later," organization is critical in estate planning, especially for an executor of an estate. To simplify the organization process, some use software that aggregates all of their financial data, including digital copies of their estate documents, giving them access to all of the financial and estate plan data in one secure location. This makes things much easier for the estate administrator or executor, especially for children or executors who live out of state.

Those who choose to store their own documents need to make certain that their spouse, other family members or friends can easily find important papers. It's a huge favor to them to organize these by creating a filing system.

One way of organizing services is to develop a filing system that is easily readable. Use a standard, sensible method. Place the tabs on the folders on the left side because your eyes normally start reading on the left. If all the tabs are on the left, you can read the tabs more easily than if some are on the left, some in the middle, and some on the right.

Compile documents into categories of those updated periodically and those stored permanently. Make a section of files that are yearly files, which you'll clean out at the end of the year, as well as "forever" files. These are life insurance policies, homeowner policies, birth certificates, marriage license, immunization records, wills, and other estate planning documentation.

You can also use color coding. For instance, you can use red folders for medical information, blue folders for your utilities files, and green for your investments.

An adult child is frequently asked to sort out estate matters after the death of a family member. Many families have one or two children who will oversee the distribution and settling of an estate. It's important that these kids be involved in the estate planning discussions to understand how the estate is set up and where important information can be found if needed.

Some folks even have a dress rehearsal with those involved to rehearse the various steps necessary to settle the estate if mom and dad are no longer living. It's a terrific way for folks and their kids to see how important it is to remain diligent about estate planning, and it also creates some peace of mind for everyone involved.

Reference: Southeast Missourian (March 7, 2016) "Get it together: Organizing your estate now will ease the burden on loved ones later"

Young Hispanics Need to Start Saving for Retirement

MP900446471According to 2013 research, only 26% of Hispanic families had savings in a retirement plan such as a 401(k) or IRA. In contrast, 65% of white families, 41% of black families, and 58% of Asian families and those of other races had savings in these types of accounts.

CNN Money’s article, "The retirement crisis facing Hispanics," reports that part of the reason for this is that many Hispanics—especially those in low-wage jobs—don't have access to retirement plans.

For example, immigrant Hispanic workers are frequently more likely to be undocumented and working off the books or working in low-wage jobs that don't have retirement accounts. Low rates of participation contribute to low rates of retirement savings. Hispanics may work for small businesses and in low-wage, non-union jobs that don’t offer many retirement savings options.

As a result, many Hispanics rely on Social Security as their sole financial support in retirement. This puts many workers in a precarious situation. Since Hispanics are more likely to live longer, they’re also more apt to work longer into their old age. Some Hispanic workers will work longer, and they’re going to rely on their families—and they’re going to be poorer.

When they do have access to employer retirement plans, Hispanic workers generally don't contribute as much to those plans because they can't afford it. They’re also less likely to buy life insurance and more likely to borrow against their 401(k)s.

Data shows that they’re also more likely to rely on family for financial support. While that provides a certain amount of security and stability, it can also be burdensome for younger family members. That's why millennial Hispanics need to focus on saving. They also need to think about estate planning, buying insurance, and keeping a close eye on their credit. This can help prevent a financial emergency from becoming a financial crisis.

Reference: CNN Money (March 2, 2016) "The retirement crisis facing Hispanics"