Seniors, Fraud and Protecting your Golden Years

Ah the golden years. If you are like most folks you are looking forward to a host of pleasures associated with being a senior. These might include lots of travel, time with the grandkids, giving back in some way and living a carefree life. It’s an exciting vision that unfortunately most seniors don’t ever get the chance to realize. So many things can derail your plans and keep you from achieving your goals in your golden years.

Crimes against seniors are on the rise 

Senior fraud is on the rise and can literally destroy your life. Many good people have been robbed of their hard earned life savings in the blink of an eye. According to Minnesota’s Attorney General Lori Swanson telemarketing fraud alone is a $40 billion a year business. The good news is that many government agencies have stepped up their efforts to keep ahead of this growing trend. 

Seek out resources for assistance

The National Council on Aging has designated a significant portion of their website to economic security for seniors. They recently posted a great article: Top 8 Ways to Protect Yourself from Scams. This article and the entire website are solid resources for both seniors and their families. The 8 tips are a common sense approach to being sure that you and your loved ones are aware of simple things you can do to protect your golden years and your financial assets. 

Be a skeptic 

My personal favorite in the Top 8 article is #8 – Be skeptical of all unsolicited offers and thoroughly do your research. An informed senior rarely becomes a victim of fraud or senior crime. Another comprehensive resource is this Senior Fraud Protection Kit available through CaregiverStress.com.

The internet is a helpful tool to research things like investment opportunities, organizations looking for donations or home care and nursing home options. The challenge is sifting through the volumes of information that a search produces and determining what is valid.

Ask for help 

Nothing can replace the sense of security you have knowing you can pick up the phone and call a trusted adviser. And remember, any request for your money or personal information can wait until you do your research and call your team. . 

Additional resources:

• National Council on Aging
• FBI – Seniors and Fraud
• CaregiverStress.com

Annual Gifts Can Reduce Your Tax Liabilities

Federal and state taxes may apply to gifts from your estate. Giving gifts is one way to offset or reduce annual income tax liabilities and reduce the size of your estate that may be subject to taxation upon death.

The Fed and 2 States Claim Taxes for Estates and Gifts

Currently two states, Minnesota and Connecticut have state level assessments for gift tax in addition to federal tax rates. For lifetime gifts of $1,000,000 or more a rate of 10% is assessed.  There is also an estate tax at death for $1,000,000+ estates of 16-41%.  The federal gift and estate tax exemption is currently set at $5.25 million.  So even if your estate is exempt from federal taxes your estate may be subject to state taxes. Minnesota has calculator available on the Department of Revenue website. 

Plan and Reduce Your Liabilities

One way to reduce your annual tax burden is give annual gifts.  The current level of tax exclusion is $14,000 per person, per year.  A married couple could give $28,000 per person, per year.

You may not owe taxes for assets left to spouses and it's possible that expense reductions could bring your estate under the limits established. It is always prudent to get advice specific to your situation and holdings. 

Interested in reading about actual cases and their tax outcomes?  Tax Adviser has an interesting blog on a couple of cases that are eye opening.

There was also the well publicized case of the actor, James Gandolfini's death this summer and the possible mismanagement of his estate tax planning.  Here is a link if you missed the story. 
Take action and get your affairs in order - it could save you and your heirs lots of money and difficulties down the road. Bulger CPA has a passion for the Estates and Trust area - let's have a discussion to protect your hard earnings.

Power of Attorney - Do I need this legal document? Yes.

Having a trusted person(s) with the legal ability to make decisions for you if you are incapable is a smart idea.

Financial power of attorney (POA) is not the same as POA for healthcare. Acting on behalf of another person in the areas of property and financial management is beneficial for signing documents when you are unable to be present, withdrawing or making money decisions, acting on behalf of the incapacitated or absent person.

Ordinary POA ceases once a person loses mental capacity. Enduring POA is required to continue representation after mental incapacitation. Having control and naming this person is the importance of this formality while you are healthy and able to make decisions. Naming a POA is not equivalent to losing your rights. Many people specify that this assignation of powers happen only when a doctor certifies incapacity or other qualifying occurrences have come to pass and the exact actions the POA is allowed to take. You can revoke your POA choices at any time.

Spouses should have a POA document for each other. All legal and financial transactions are not covered by the mere fact of marriage.

For more details on power of attorney.