AgingOptions Life Plan: Finance

“Will I have enough assets in order to not run out of money before I run out of life?” is top of mind for all of us in the final third of our lives. In answering this, preservation, positioning and passing of accumulated wealth goes beyond traditional estate planning. It calls for all affected family members to be participants in a model that integrates health, housing and elder law considerations.

Fighting back against identity theft

People 65 and over are more likely to have a “nest egg,” own a home and have excellent credit from a lifetime of working, saving and investing.  These sterling qualities attract con artists in droves, which is why consumers 60 and over accounted for 20 percent of identity theft complaints in 2013 according to credit-reporting company, Equifax.

Identity theft is the number one consumer complaint according to a 2013 Federal Trade Commission report.  Last year consumers filed over one million fraud-related complaints with a total value of $1.6 billion.  Because only 61 percent of those reporting the fraud filed the dollar value of the fraud, that number is likely to be low ball.  Victims reported that U.S. companies perpetrated about 88 percent of the reported fraud cases and that most consumers received an initial contact through either the telephone or e-mail.

Why do thieves target older adults so often?  Aside from the points above about their overall value as victims, older adults may find themselves open to identity theft through their health care services or tax filing says an Equifax white paper, which lists nine areas that leave them vulnerable.  Those areas include having a caregiver with access to their personal information, interacting more frequently with the healthcare system (which reports nearly universal data breaches), a Medicare card that includes their Social Security number, and the increased chance that a fraudster can access your dead spouse’s Social Security number.

In 2013, identity thieves defrauded older adults by pretending to be employees of the National Do Not Call Registry.  Callers asked victims to verify their information when of course they were gathering personal information they could later use.  Another scam involved a company that purportedly offered free transportation to Medicare recipients.  Apparently, the possibilities are without limit.

So how do you keep your personal information out of the hands of scammers?  Equifax offers these suggestions:

Eliminate as much junk mail as you can from your mailbox by removing yourself from mailing lists.

You can opt out of offers from insurance and credit card companies by contacting online or by calling 1-888-567-8688.  The service is operated by the three credit reporting companies and will ask for your Social Security number.  When you contact them, you’ll be asked whether you choose to opt out for 5 years or permanently.  Read more about this service on the Federal Trade Commission’s website.

You can also contact the federal government’s National Do Not Call Registry.  It is a free, easy way to reduce the telemarketing calls you get at home. To register your phone number or to get information about the registry, visit, or call 1-888-382-1222 from the phone number you want to register.

Examine carefully any requests for personal information before responding to them.  Federal government programs generally do not approach citizens, preferring instead to have citizens approach them.  Therefore, you can expect that phone calls from the IRS, Social Security and the like are unlikely to be asking you for Social Security number, credit card information or other personal information.  If you must provide personal information, for instance when you pay online for an item, ensure that the site is secure before paying.

Monitor your credit report and your bank account.  I attended a meeting once where the speaker found that people who were scammed had originally had charges on their credit card or bank account for less than a dollar.  Scammers found people’s personal information and then charged the account for a minor amount of money.  That charge verified that the account was active and yet flew under the radar for the banks.  Once the account was verified, the scammer used it for amounts that were more substantial.  You can check each of the three major credit reporting bureaus once a year.

Understand how Medicare uses your private information.  You have the right to limit how businesses that provide Medicare services use and give out your personal information.   If you are aware of the rules they have to play by, you can limit your exposure to the bad players.

Understand what the current scams are.  In the name of being forewarned is forearmed, keeping track of what scams are currently making the rounds provides you with the knowledge to avoid becoming part of the latest statistics.

A reader recommends these two fraud and scam resources.

  1. The Washington State Attorney General’s office for scam alerts.  That website is:

You can sign up there to receive an e-mail alert of scams and other consumer-related news.

  1. AARP operates a service called Fraud Watch Network.

Again, you can add you name to their e-mail list to receive fraud-related information; and they have a Facebook page you can “like” to be notified of fraud-related information.  You don’t have to be an AARP member to use this service.

Last but not least…share.  This includes not only talking to your friends about current scams that you know about but also being willing to step up and identify yourself if you’ve been scammed.  There’s no shame in being scammed whether the scammer is someone from Nigeria or a member of your family.  They’ve had an opportunity to learn personal information about you that makes you vulnerable.  If you’ve lost money or personal property, you may never be able to recover it but you can help the next person avoid being in the same boat.

For more stories about fraud:

Staying alert to the threat of a scam

Protection against identity theft for both the living and the dead

Protecting older family members from scams



Scam alert

You would think that we would just run out of things lazy people can use to scam the rest of us but it just isn’t so.  A client walked into our office this week with a notice from the National Record Service.  The business claimed that they should get a Certified Copy of their Deed as evidence that their property was transferred to them for the low, low price of $69.50.

The Better Business Bureau rates them at F with 136 complaints and failing to respond to complaints.  Homebuyers don’t need a copy of the deed.  They’ll receive the original for free as part of the regular real estate transaction. The register of deeds office automatically mails the original back to the homeowner once the transaction has been recorded.  Anyone who wants another copy of their deed can get one for a few dollars at their county register of deeds office.   There’s actually a notice on the letter that says in All Caps and in a slightly larger font that the rest of the document that “MANY GOVERNMENT RECORDS ARE AVAILABLE FREE OR AT A NOMINAL COST FROM GOVERNMENT AGENCIES.”

Anyone over the age of 65 is automatically bombarded by messages from people looking to separate you from your money.  That means that if you belong to that age group, you must increase your vigilance against thieves.  If you receive anything unsolicited (by phone, e-mail, regular mail, or the guy at your door, you should be suspicious of ANY plan, idea, scheme, business deal, or any proposition that requires you to provide your money on short notice.



Your debts don’t expire just because you have

Who ends up being responsible for paying your debts depends on the type of debts you leave behind. Creditors receive payment from the part of the estate that goes through probate.   Here’s an AgingOptions article to explain probate.   Items that go through probate are any items that pass through the Will.  The job of the executor is to make sure the creditors are paid before any assets are passed on to the heirs.

Generally, your estate is responsible for paying off your debts and debt collectors cannot collect payment from family members.  That’s not always the case however.  For instance because Washington is a community property estate, the spouse of the deceased may be responsible for some debt if the property was acquired during the marriage.  Co-signers and those who owned the property jointly with the deceased are also responsible for the debt.

Some assets are not distributed through the Will and creditors cannot access funds for those assets.  Examples of assets that go directly to the beneficiaries include jointly held bank accounts, retirement accounts and life insurance policies.  Some trust assets are also not available for creditors but that depends upon the state laws and the type of trust involved.

Taxes, mortgages, Medicaid, administration expenses, and funeral expenses get first priority.  Credit cards are at the bottom of the list.  If there aren’t enough assets to pay off the creditors, the creditors cannot collect money that the estate does not have and must write off the debt.  Relatives are most often protected from creditors by the federal Fair Debt Collection Practices Act, or FDCPA.  If family members are getting bothered about the deceased’s debt, they should contact a lawyer.



Your decision about pension survivor benefits may harm your spouse’s future

If you retire with a pension…congratulations.  Less than 22 percent of Americans in the private workplace still get pensions but many government employees still get them.  If you’re married when you or your spouse retires and one of you is eligible for a pension, you’ll have to make some decisions.

There are two types of pension benefits.  They are: Single Life Benefit and Joint & Survivor Benefit.

A Single Life Benefit pays a higher benefit but only covers the lifetime of the person who earned the benefit.  Benefits are paid out based on the beneficiaries expected lifetime and cease when the beneficiary dies.

A Joint & Survivor Benefit is a smaller check that covers both spouses.  This check is based on both your life expectancy and your spouse’s life expectancy.  Should the worker with the plan die, his or her spouse will continue to receive benefits.

By law, plans must offer the spouse a lifetime annuity.  Declining the spousal annuity requires a waiver.  This federally required form lets you and your spouse know that the survivor will be without pension benefits if the worker dies.  State and local government pensions are not required to have the form.  Once it is signed, your decision is final.  As with all legal documents, don’t sign unless you understand just what you are signing away.  Invest in a conversation with a financial planner or Elder Law Attorney.  Doing so may prevent a significant amount of stress down the line.

So, how do you decide which option works best for you?  You start by adding up your retirement income to estimate what benefits will be available to the survivor, look at your health and other circumstances that might change as you age and then determine how important a survivor’s benefit will be to whichever one of you remains after the first of you passes.

Read this article from AARP to find out what other decisions may financially harm the surviving spouse.


Retirement and the sandwich generation: 7 steps to keep your retirement on track

The other day someone came to me and said that her adult children were still living with her and it was affecting her ability to make decisions about the rest of her life.  She wasn’t asking me for advice so much as wondering whether her experience is the norm.  According to the Pew Research Center, she’s definitely not alone.  The sandwich generation is a term coined in the last decade of the last century by Carol Abaya in reference to middle-aged adults providing financial and/or emotional support to both their children and their parents.  Just over one of every eight Americans, aged 40 to 60, is both raising a child and caring for a parent.  The problem, say financial advisors, is that if you are one of those midlife care providers, you’re going to have to make some tough decisions because you don’t want what’s happening now to be a situation your own children inherit when you reach your parents’ ages.

It’s no secret that the economic downturn affected people in the millennial generation in ways that may continue to haunt them for decades.   High unemployment and even higher student debt has forced many of that generation to consider their old room at home to be a somewhat permanent landing pad.  At the other end of this story is that rising medical and living expenses along with shrinking retirement accounts has forced many otherwise prepared older adults to look around for assistance from family members.

Those elements mean that money that would have found its way to retirement accounts is being diverted to the needs of the other two (and sometimes three or four) generations.  Here are some steps to keep your retirement on track while continuing to provide care for your aging parents and adult children.

  1. As important as it is to provide for your parents and your children, make sure your own retirement needs are met first. Pay at least as much into your retirement account as your employer will match.
  2. Re-evaluate your options. Make tough choices such as moving to a smaller house, reducing your reliance on your automobile so that you can trim down to one car, and trim expenses such as cable and entertainment costs.
  3. Take a step back and look at what resources you actually have. Ask your children for help with expenses, scale back on promises to pay for college education. If a child was hoping to attend a big state school, it may be time to attend a local university and live at home rather than paying expensive college boarding fees or an additional rent. Children should cut their own social life budget to the bone before you shortcut your own retirement.
  4. Get a grasp on opportunity costs (what you’ll give up in the future for what financial decisions you make today). Don’t dip into retirement savings.
  5. Combine households. If you are paying for your child’s rent or your parents’ rent, consider living all in one household in order to cut expenses.
  6. Check out tax breaks that may be available by claiming your children or your parents as dependents.
  7. Use what you are learning about your parents’ aging to help plan for your own. One thing you may want to consider is purchasing a Long-Term Care Insurance Policy to create a bulwark against the possibility of your own future care needs.

The first place to start is to assemble a team made up of a financial expert and an Elder Law Attorney to go over your planning.  Most people aren’t experts in these fields and going it alone is likely to end up costing more money than you have saved.   They’ll be aware of resources and options that you may not be aware of and can help position you so that you can take advantage of resources such as government benefits when they become necessary.  Contact our office to get started.