Category Archives: Asset Protection

Leaving Money to Others can Create Serious Problems

By Attorney Dan Vu

Screen Shot 2013-04-04 at 8.51.43 AMUnfortunately we live in a world where even when you want to do a good thing for someone, like leave them an inheritance, you may be creating a serious problem for them. For example, if a disabled family member has been approved for government benefits, like SSI or Medicaid, and they now receive an inheritance, they will have to update the government agency about their inherited assets. The agency may count the inheritance as an asset that disqualifies them for future benefits.

More common, and worse than the previous example, is when the disabled family member forgets – or does not know that they are required – to report the inheritance and therefore government payments continue. Every year, the Agency conducts an audit and they will find out about the inherited assets. Unfortunately for the disabled family member in this case, the Agency will not only suspend future payments but will also demand that they return all payments received from the time of inheritance to date!

What if the beneficiary has already spent the money? The agency becomes a debt collector, and the beneficiary will wish they never received the inheritance.

Knowing that they could cause such problems, many people choose simply to disinherit the disabled family member. This results in leaving them out in the cold when they could benefit most from the inheritance.

There is a better way. A Supplemental Care Trust can be used for the benefit of the disabled beneficiary. The inheritance left to the Supplemental Care Trust can still be used directly for the disabled beneficiary’s supplemental needs, i.e. anything that the government benefit is not providing. By law, this trust cannot be used to disqualify the beneficiary for any public benefit and does not need to be reported to the government agency. The only requirements are that the trust be set up by someone else, typically the parent or the grandparent, and that a trustee be appointed, but that trustee could even be the disabled beneficiary’s sibling. When the disabled beneficiary needs a new car, some funds for a trip, or almost any other “supplemental” expense the trustee will simply write the check. Also, the trustee is limited to only writing checks to or for the benefit of the disabled beneficiary to ensure that trustee has no incentive to keep the funds from a disabled beneficiary’s reasonable request. In this way, the beneficiary can keep their government benefits for basic necessities while making life easier by using the supplemental care trust funds.

 

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DISCLAIMER – Every case is different because every case is different. This blog does not give legal advice. This blog does not create an attorney client relationship. You are not permitted to rely on anything in this blog for any reason. This blog is an entirely personal endeavor. Every person’s situation is different and requires an attorney to review the situation personally with you.
No attorney-client relationship is created by this site.

The use of the Internet, this blog or email for communication with this firm or any individual member of this firm does not establish an attorney-client relationship. Before we represent any client, the client and the attorney will sign a written retainer agreement.
If you do not have a written, signed retainer agreement with us, we are not representing you and will not be taking any action on your behalf.

 

Are You the Victim of a Scam?

by Janet Fickle

Screen Shot 2013-04-04 at 8.47.02 AMThere are many types of fraud that affect senior citizens. It is a booming business that targets the elderly.

People who propose to do work on your home and take money up front without doing the work is one of the scams that happens to many people. Also, there is another way the scammers work, as was the case with my grandmother’s situation. The scammers did the work on her roof. Later, the roofers came back to tell her that their boss wasn’t satisfied with the work they had done and that they needed to do some more work. They asked her to go outside so they could show her what they intended to do. While she was outside with one partner-in-scam, his partner went into the house and stole my grandmother’s money. Morale of the story: Get references before hiring anyone to work in or around your home.

Some schemes involve people making false claims on estates after the death of a loved one. If you are given a claim, make sure you have it in writing to give to the executor. The executor will be able to evaluate the claim and decide if it has any merit.

Of course, we have all heard of the phone calls that seniors are getting concerning grandchildren being in trouble and asking the grandparent to send them money. Call family members first to find out what, if anything, is happening.

People are always calling wanting you to send money for worthy causes. There are many causes that are reputable and really do help people in many ways. Just be very careful about sending your money to just anyone. Ask questions to make sure it is something you really feel comfortable doing. So, do research before agreeing to send them money.

I have had people call me asking if I am having trouble with my computer. They want me to go to my computer so they can help me with any problems. I never let anyone have access to my computer unless I call them for help. If you receive phone calls wanting your social security number or any credit card numbers, do not give these out.

Of course, there are the many investment schemes that can lure you into a bad situation. Again, be cautious and verify information with people you trust. Don’t be pressured with time limits. If they can’t wait for you to check everything out, it is probably not in your best interest.

There are so many fraudulent schemes and scams, it would take a book to name them all. Just be very cautious and remember, it is your phone and you can hang up on anybody you don’t trust.

The Better Business Bureau is a good way to find out about the companies or people you want to do business with, or you can call the Attorney General’s Office.

If you feel you are being taken advantage of or you feel you have been caught in a scam, please call the police to report these unscrupulous people. This is the only way they will be caught and prosecuted.

Source: Baby Boomers Beware: Financial Fraud That Targets Seniors.

www.investopedia.com/articles/pf/11/senior-financial-scams

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DISCLAIMER – Every case is different because every case is different. This blog does not give legal advice. This blog does not create an attorney client relationship. You are not permitted to rely on anything in this blog for any reason. This blog is an entirely personal endeavor. Every person’s situation is different and requires an attorney to review the situation personally with you.
No attorney-client relationship is created by this site.

The use of the Internet, this blog or email for communication with this firm or any individual member of this firm does not establish an attorney-client relationship. Before we represent any client, the client and the attorney will sign a written retainer agreement.
If you do not have a written, signed retainer agreement with us, we are not representing you and will not be taking any action on your behalf.

 

Municipal Pension Systems Are Crumbling in Rhode Island

 

By Julian Guilfoyle, Cooper & Adel Financial

The afternoon knows what the morning never suspected.”  -Robert Frost
 

Even as the overall economy continues to improve, municipal and state pension systems continue to be egregiously underfunded. Josh Barro of Bloomberg News wrote last week in an article titled “Why Municipal Pension Systems Are a Terrible Idea” the pension plan for the police department in Scituate, Rhode Island (population 10,329) is underfunded to the tune of $8.4 million. He states, “That doesn’t sound like a big shortfall until you realize that Scituate’s pension plan has only 33 participants, meaning it is short by more than a quarter million dollars per employee.”

Unfortunately for residents of the state, Scituate is not alone. Barro writes, “Rhode Island, with just 41 cities and towns, has 36 separate pension systems, and their unfunded liabilities total more than $2.3 billion.” With the amount of money on the line, you would expect these pensions would be in the hands of capable professionals working on behalf of the public employees. That doesn’t appear to be the case. Barro notes, “In the case of Scituate, the board that was supposed to oversee the police pension plan met only once between 1999 and 2011.” Further evidence of the board’s irresponsibility lies in the fact that up until 2007 they were using an investment return projection of 9 percent annually. The problem is of course, that like most of us, 1999-2007 did not yield annual returns of 9 percent for the municipal pension fund. This is the fundamental reason why the pension fund liability quadrupled between 1999 and 2013.

With all the overlapping bureaucracy and redundant and ineffective boards, Rhode Island lawmakers have proposed what Barro cites as the “more promising long-term fix.” Their idea is to consolidate these municipal funds into one large state pension fund. Proponents of the idea highlight a 2011 reform of one of the state’s largest pension systems that improved the funding ratio from 48 percent to 61 percent. The improvement was accomplished largely by a restructuring of the pension plan, meaning the pension system paid out reduced benefits and increased employee contributions. However, as nbcnews.com reported last year, there are only 16 states that have pension systems funded above eighty percent (considered healthy). Rhode Island’s state pensions were funded at a rate of 49% of benefits promised. The pot is calling the kettle black.

The real question here is what is going to happen when these pensions fail. I believe that it is a matter of when, not if. As baby boomers age, the stress on the system will become greater and greater with more retirements threatened. It has been, and in my opinion will continue to be, politically unpalatable to slash benefits, especially at the level necessary to make these pension systems solvent. So municipalities will defer their liabilities to the states, states eventually to the federal government, and sooner than later we will be talking about the pension bailout. Or, like Pritchard, Alabama, they’ll just stop sending the checks.

BLOOMBERG

http://www.bloomberg.com/news/2013-02-08/why-municipal-pension-systems-are-a-terrible-idea.html

NBC NEWS

http://www.nbcnews.com/business/economywatch/funding-gap-state-retirement-benefits-rises-1-4-trillion-834473

Pritchard, Alabama Cooper and Adel Blog

http://cooperelderlaw.com/planning/no-bailout-how-retirees-losing-their-pensions-all-across-country/

DISCLAIMER – Every case is different because every case is different. This blog does not give legal advice. This blog does not create an attorney client relationship. You are not permitted to rely on anything in this blog for any reason. This blog is an entirely personal endeavor. Every person’s situation is different and requires an attorney to review the situation personally with you.
No attorney-client relationship is created by this site.

The use of the Internet, this blog or email for communication with this firm or any individual member of this firm does not establish an attorney-client relationship. Before we represent any client, the client and the attorney will sign a written retainer agreement.
If you do not have a written, signed retainer agreement with us, we are not representing you and will not be taking any action on your behalf.

 

“Do it Yourself” Advice is Cheaper now, but More Expensive Later…

 

By Attorney Mitch Adel

For years, I have been a subscriber of Real Simple magazine. I love the short quick reads that offer advice on how to solve everyday problems that come up in life and around the house. Nothing beats a simple “fix it” or input from another reader about how to solve common problems in ways you might not of thought of yourself. I seen an article that is related to what I do everyday, but that all changed this month. In the March 2013 issue there is an extremely useful article on “5 tough parental talks.” As it says in the tagline of the article, it is not easy to discuss death and dying with your folks but it's important all the same. The topics in the article are written as questions and are terrific, but please BE CAREFUL, some of the cost- cutting advice can have the opposite effect.

The second question in the article, an important one, asks “Do you have a Power of Attorney?” This is an extremely important document, and the advice on how to start the process with someone's parent is spot on. The author and her source explain that the best option is to contact an elder law attorney. Now, if you have read some of our elder law firm's blogs in the past, I can see how you might think my writing about this article is self serving, but in addition I want to share with you the reasons why.

The first question asks “Do you have a will?”, again a great question and a document that everyone should have, but be careful about the advice that is given. The author's source explains that not having a will means that the probate court judge will divide the assets and this process can cost thousands of dollars. Depending on the complexity of the assets that the deceased person had this can be true, but please also understand that even if you have a Last Will and Testament, your family may still have a costly probate experience. In fact, if you rely solely on a will for an estate plan, your estate will go through probate. This answer to the first question, again ends with the advice of how to start the process and shares that an attorney is the preferred option, but the scariest part is next. Their advice is to offer a cheaper alternative – a “do it yourself” (DIY) website. In the writer's defense they do acknowledge that using the DIY method should only be used if you have no property and few or no investments. My worry here is that some people will only see this as a cheaper solution and again, if not used properly a “simple” will can have the opposite effect.

The most hair-raising question in this article is “Do you have an authorized user on your bank and investment accounts?” Again, great question and putting the financial institution on notice of the above mentioned power of attorney is the best answer. However, in the article it says that families should meet with their bank or brokerage house to fill out the appropriate paperwork to have another family member listed as a co-owner and then list the account joint with rights of survivorship. This will allow the other family member (child) to withdraw funds and close accounts if the parent becomes incapacitated or passes away. While both the ability to access the funds and close accounts outside of the probate court are true, the article fails to mention that if the child, while the parent is still alive, has any creditor issues such as a car accident that leads to a lawsuit, a divorce or a bankruptcy, all of the money in the parent's account is exposed to that co-owner's (child's) creditors. In order to avoid having the children's problems affect the parent's assets, families should rely on a properly drafted power of attorney to access the funds while the parent is alive and a beneficiary designation on the account or a revocable living trust to avoid the probate court's involvement at death.

Every year the number of “do it yourself” (DIY) websites increases and with it an increasing amount of information available to you without your having to leave your couch. I cannot stress enough the importance of being extremely careful with how you utilize that information, no matter how reputable the source. You should never replace professional legal advice with something you read online or even in a magazine. If you have any questions or would like to discuss your individual situation please call our office 800-798-5297 to schedule a free one hour consultation.

DISCLAIMER – Every case is different because every case is different. This blog does not give legal advice. This blog does not create an attorney client relationship. You are not permitted to rely on anything in this blog for any reason. This blog is an entirely personal endeavor. Every person’s situation is different and requires an attorney to review the situation personally with you.
No attorney-client relationship is created by this site.

The use of the Internet, this blog or email for communication with this firm or any individual member of this firm does not establish an attorney-client relationship. Before we represent any client, the client and the attorney will sign a written retainer agreement.
If you do not have a written, signed retainer agreement with us, we are not representing you and will not be taking any action on your behalf.

 

Common retirement planning mistakes made by seniors

By Roy Whited

This information was taken in part from a newsletter posted by Life Health Pro in November 2012. The content reminded me of certain issues that we see our clients facing almost every day.

Thinking only in terms of “me” and not “we”. At the death of the first spouse, the surviving spouse will lose a social security benefit, see a possible reduction in a pension income, and likely an increase in their tax bracket when going from a joint return to an individual return. Eighty percent of all men die married, while 80% of all women die single. Additionally, 75% of all women living in poverty were not poor before they were widowed. Early income and retirement planning decisions should be made with the survivor benefits in mind to ensure that both husband and wife are protected.

In addition to making the correct choice for income planning it is also very important to protect other assets such as the home. The home is many times one of the larger assets owned by a couple and can be used to create additional income if needed.

Remember, not all trusts are created equal. Not all trusts are designed to protect your home. In fact most are not designed to protect your home from being lost to the cost of your poor health.

Call the Cooper and Adel law firm and take advantage of a one hour free consultation to learn about how you can protect your home and other assets. 1-800-798-5297 

DISCLAIMER – Every case is different because every case is different. This blog does not give legal advice. This blog does not create an attorney client relationship. You are not permitted to rely on anything in this blog for any reason. This blog is an entirely personal endeavor. Every person’s situation is different and requires an attorney to review the situation personally with you.
No attorney-client relationship is created by this site.

The use of the Internet, this blog or email for communication with this firm or any individual member of this firm does not establish an attorney-client relationship. Before we represent any client, the client and the attorney will sign a written retainer agreement.
If you do not have a written, signed retainer agreement with us, we are not representing you and will not be taking any action on your behalf.

 

No Hanky Panky with Honey Boo Boo’s moola

 

By Meredith Gard

Reality TV stars aren't known for their scrupulous money management. But Mama June, matriarch of the clan starring in TLC's Here Comes Honey Boo Boo, is out to change that. According to People Magazine, the famous family is making approximately $20,000 an episode for the spinoff from the Toddlers and Tiaras franchise, and no one is going to to be able to accuse her of squandering it. They are still living on the income from from her husband's job as a contractor.

So where has the TLC money gone? Straight into trusts that Mama June set up for her four girls. That's right, the show isn't changing how the family lives, but changing the future for Honey Boo Boo, Pumpkin, Chubbs and Chickadee by creating trusts to hold the earnings until the girls are 21 or need the funds for their education.

The Honey Boo Boo family is just one example of how trusts can be a part of a sound money management plan that will help you prepare for, and safeguard against, the future. The experienced attorneys at Cooper, Adel & Associates can help put together a plan that protects you and your family. After all, as Mama June says, “I want my kids to look back and say, 'Mama played it smart.'”

Source:

http://www.usatoday.com/story/life/people/2013/01/08/honey-boo-boo-clans-reality-earnings-go-to-trust-fund/1818475/

 

DISCLAIMER – Every case is different because every case is different. This blog does not give legal advice. This blog does not create an attorney client relationship. You are not permitted to rely on anything in this blog for any reason. This blog is an entirely personal endeavor. Every person’s situation is different and requires an attorney to review the situation personally with you.
No attorney-client relationship is created by this site.

The use of the Internet, this blog or email for communication with this firm or any individual member of this firm does not establish an attorney-client relationship. Before we represent any client, the client and the attorney will sign a written retainer agreement.
If you do not have a written, signed retainer agreement with us, we are not representing you and will not be taking any action on your behalf.

 

Don’t Be a Victim

 

By Roy Whited
 

The information below came in part from the Ohio Department of Insurance newsletter.
 
Department of Insurance Director Mary Taylor is advising Ohioans who suffered storm damage tips on how to avoid becoming a victim of contractor fraud.
 
Obtain a list of reputable contractors from your insurance carrier, the Better Business Bureau or a specialized consumer organization.
Contact multiple contractors and obtain more than one estimate.
Do not allow a contractor to inspect your property when you are not home.
If you give a contractor permission to inspect your property, personally watch them conduct the inspection.
Obtain, in writing, the terms and conditions of the project.
Avoid signing a contract until the document is reviewed fully and/or discuss the terms of the contract with a legal representative or a trusted adviser.
Pay the contractor by check or credit card, rather than in cash, and do not pay in full until all work has been finished.
 
Ohioans with insurance questions can call the Department's consumer hotline at 
1-800-686-1526.  Those who have been victimized by contractor fraud should contact the Department's fraud hotline at 1-800-686-1527.  Visit www.insurance.ohio.gov for more information.
 
In addition to protecting your property from the perils of mother nature you should consider making plans to protect your home and other assets from being lost to the cost of health problems.  A good place to start is to meet with a qualified elder law attorney like the staff of Cooper, Adel & Associates.  Call 1-8-00-798-5297 to schedule a free consultation to learn more.  Remember, don't lose your wealth to your poor health.

Protecting Yourself From Identity Fraud and Scams

 

By Dolly Wilkerson

It seems the holiday shopping season starts earlier every year. Along with it comes phone calls from charities asking for your help and your mailbox becomes full of advertisements stating you won a “prize”. Your computer e-mail suddenly becomes full of coupons for free items if you simply fill out the questionnaire. How do you know which charities are legitimate and what can you do to protect yourself from fraud and scams?

The Ohio Attorney General's office offers a free pamphlet titled “Elder Fraud”.

Listed below are some of the warning signs to watch out for:

  • You are asked to wire money to a stranger.

  • You've won a contest you've never heard of or entered.

  • You are pressured to “act now!”

  • You have to pay a fee to receive your “prize”.

  • Your personal information is requested.

  • A large company refuses to provide written information.

  • A company has no physical address, only a P.O. Box.

The Attorney General's office also offers this advise to protect yourself!

  • Research business and charities. Check with the Attorney General's office and the Better Business Bureau. Ask family and friends for recommendations or if they have ever heard of this company or charity. Never do business with a company that refuses to give you written information, a phone number or physical address.

  • Read the fine print. Read all the terms and conditions of any agreement before you sign. Review contracts with a trusted attorney or family member. If a fraudulent charge appears on your bank or credit card statement, immediately notify your bank.

  • Remember your rights. Ohio consumer law protects you from unfair, deceptive and unconscionable practices in consumer transactions. For example, advertisements must list exclusions and limitations.

  • Reconsider the purchase. Take time before you make a decision. Never give personal information to someone you don't know or trust. Don't give in to high-pressure sales tactics.

  • Report scams and unfair practices. If you have a problem with a purchase you made, notify the company in writing. Explain your complaint and give a deadline for resolution.

If you suspect a scam or cannot resolve the problem on your own. The Ohio Attorney General's Office suggest you file a complaint with them at:

www.OhioAttorneyGeneral.gov or call 800-282-0515.

You can also use the above information to receive a copy of the pamphlet “Elder Fraud”

 

 

 

The Dangers of Gifting Real Estate

By Attorney Ted Brown

In previous blogs, I have discussed ways to use an irrevocable trust to reduce estate tax liability. I have discussed a technique known as controlled gifting. One issue that arises in many of these situation is that of capital gains tax.

Capital gains tax applies to the sale of appreciated assets such as land or stocks. The tax is based on the profit that one earns on the sale. For example, if you buy a piece of land for $100,000 and you sell it for $225,000, you have a capital gain of $125,000. This is subject to a tax rate of 15-25% plus an additional 5% of state income tax on the gain.

In an effort to get assets “out of their estate” so as to be protected from estate tax as well as a nursing home , many people consider deeding their real estate to their children. This is a very risky strategy for a variety of reasons.

A gift of property during the owner's lifetime results in a carry-over of the original sales price to the recipient. When the recipient eventually sells, they will owe capital gains tax on the difference between the sale price and the price that the original owner paid. Depending on how much the property has appreciated over time, this could result in a stifling capital gains tax problem for the recipient.

Moreover, if the property is in the hands of someone else, it is subject to the liabilities of that person. Suppose the recipient gets sued or divorced. The entire property could be lost to pay their debts leaving you without a place to live.

Finally, the Medicaid rules count a gift of any kind made within 5 years as if it is still yours. Even though you no longer own the property, you will not qualify for Medicaid until its value is “spent down.”

It is very important to understand the many potential consequences of gifting any assets, particularly real estate, before embarking on such a plan. An Elder Law Attorney can explain the many complexities of gifting and asset protection.  

Son Held Responsible for Mother’s Nursing Home Bills

 

By Attorney Nate Simpson

Earlier this month, the Superior Court of Pennsylvania held that in Pennsylvania, a son liable for his mother’s nursing home bills. Health Care & Retirement Corporation of America v. John Pittas, 2012 PA Super 96 (May 7, 2012). This Pennsylvania case could mark the beginning of a change in the way states cope with the rising costs of long-term healthcare.

John Pittas' mother was injured in a car accident, and following her rehabilitation, she went into a nursing home from September 2007 until March of 2008. During the time she was in the nursing home she accumulated a bill of over $90,000. Pittas' mother withdrew from the nursing home in 2008 and moved to Greece, leaving the bill unpaid.

Under Pennsylvania’s “filial responsibility” law, the nursing home brought a lawsuit against her son, even though there was a pending Medicaid application. The Superior Court held that under state law, her son was responsible for the bill based solely on the fact that she was his mother. Under Pennsylvania law, a child is responsible for their parent's medical bills if their parent is indigent, and the court determines that the child can afford to pay the bills. This law is particularly onerous since it permits a private company (e.g. nursing home), rather than a state agency, to sue the child for the debts of the parents. The law also allows the nursing home to choose which child it sues, and did not require the court to consider the pending Medicaid application.

A majority of states currently have these types of statutes on their books, but up until now they have rarely been enforced. Ohio is one of over 30 states that currently has a filial responsibility law on the books. Ohio Rev. Code Ann. 2919.21 Ohio's law places responsibility on children to provide for their parents. Ohio is different than the Pennsylvania law in that the Ohio Revised Code makes it a CRIMINAL offense to fail to provide adequate support to your parents. As budgets around the state tighten, we could see a change to follow the example set by Pennsylvania to also permit private parties, such as nursing homes and care facilities, to sue children civilly for the unpaid costs of care for their parents. Pennsylvania borders Ohio, and it is not a stretch to imagine the State government getting ideas from its neighbor. In 2005, the National Center for Policy Analysis released a paper arguing for increased enforcement of these laws in order to reduce the strain on state budgets. http://www.ncpa.org/pub/ba521/.

So what can be done? For children, it is important to make sure that you are helping your parents plan for future long-term care expenses. There are many options available which will enable your parents to preserve a parent’s assets while also protecting their children from civil or criminal actions. This includes long-term care insurance, sound financial planning, and well as securing Medicaid benefits in a timely manner so that medical bills are not left unpaid. It is important to note that if you help your parents plan ahead and PROPERLY qualify for Medicaid, your parent's bill will be paid by Medicaid and you will not be liable. The bottom line is that you can help your parents to preserve their assets and also avoid filial liability, but planning is essential.

If you or a loved one are concerned about future long-term care costs, an elder law attorney such as Cooper, Adel & Associates can help guide you through the process.

 



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