Elder Abuse Continues as a Billion-dollar Problem

Elder abuse continues to be a problem for seniors, but individuals can take steps to protect themselves in their estate plans and finances.

Aging baby boomers are a giant target for scammers. A report issued last year from a federal agency, the Consumer Financial Protection Bureau highlighted the growth in banks and brokerage firms that reported suspicious activity in elderly clients’ accounts. The monthly filing of suspicious activity reports tied to elder financial exploitation increased four times from 2013 through 2017, according to a recent article from the Rome-News Tribune titled “Financial abuse steals billions from seniors each year.”

When the victim knew the other person, a family member or an acquaintance, the average loss was around $50,000. When the victim did not have a personal relationship with their scammer, the average loss was around $17,000.  See this recent blog for more background.  https://galligan-law.com/elder-financial-abuse-is-increasing/

What can you do to protect yourself, now and in the future, from becoming a victim? There are many ways to build a defense that will make it less likely that you or a loved one will become a victim of these scams.

First, don’t put off taking steps to protect yourself, while you are relatively young. Putting safeguards into place now can make you less vulnerable in the future. If you are suffer bad health and lack of capacity later, it may be too late.

Create a durable power of attorney as part of your estate plan. The power of attorney names a trusted person you name as your legal representative or agent, who can manage your financial affairs if need be.  You should also consider using a trust which owns assets during your lifetime.  While it is true that family members are often the ones who commit financial elder abuse, you’ll need to put your trust in someone. Usually this is an adult child or a relative. You may also consider a bank as a trustee.  They will charge for their services, but their professionalism makes a bank an excellent choice.

It may also help to bring your agent, trustee and other loved ones into the discussion about assisting with your finances well before incapacity and be open with them about what you want your fiduciaries to do.  Of course, many people are hesitant to discuss finances openly, but as Justice Brandeis remarked over a hundred years ago, “Sunshine is said to be the best of disinfectants.”  Having multiple people aware of what is happening and what your fiduciaries are doing may prevent one bad actor from attempting or getting away with elder abuse.

Consider the guaranteed income approach to retirement planning. Figuring out how to generate a steady stream of income as you face the cognitive declines that occur in later years might be a challenge. Planning for this in advance will be better.  Social Security is one of the most valuable sources of guaranteed income. If you will receive a pension, try not to do a lump sum payout with the intent to invest the money on your own. That lump sum makes you a rich target for scammers.

Consider rolling over 401(k) accounts into Roth accounts, or simply into one account. If you have one or more workplace retirement plans, consolidating them will make it easier for you or your representative to manage investments and required minimum distributions.

Make sure that you have an estate plan in place, or that your estate plan is current. Over time, families grow and change, financial situations change and the intentions you had ten, twenty or even thirty years ago, may not be the same as they are today. An experienced estate planning attorney can ensure that your wishes today are followed, through the use of a will, trust and other estate planning strategies.

Resource: Rome News-Tribune (April 27, 2020) “Financial abuse steals billions from seniors each year.”

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The Symptoms of Early-Onset Alzheimer’s Disease

Here are 7 key symptoms of early-onset Alzheimer’s Disease.

Many people face cognitive challenges as they age, such as memory loss.  Some suffer from dementia or Alzheimer’s disease, and some even have early-onset Alzheimer’s.  Considerable’s recent article entitled “7 surprising early signs of Alzheimer’s” provides us with some signs of early-onset Alzheimer’s disease.

Theft or other law-breaking. Any behavioral change as people age is of concern, but this can be a sign of Frontotemporal Dementia (FTD), another progressively damaging, age-related brain disorder. FTD usually hits adults aged 45-65. People’s executive function—their ability to make decisions—can be impacted by FTD, which may explain why they become unable to discern right from wrong.  I have had clients in the past discover this condition after an arrest or fine lead to a medical exam.

Frequent falls. A study of 125 older adults asked them to record how frequently in an eight-month period that they fell or tripped. Researchers examined the brain scans of those who fell most frequently and saw a correlation between falls and early-onset Alzheimer’s Disease.

Forgetting an object’s function. We all forget where we put the keys. However, if you can’t remember what a key is for, or where dirty dishes are supposed to go, then it may be the first signs of Alzheimer’s Disease or dementia.

Inappropriate diet. Prior to the onset of Alzheimer’s, patients typically to eat more (roughly 500 calories more a day) than their aging counterparts but they still tend to lose weight. Doctors think this is a metabolic change. Some elderly actually eat inanimate objects prior to their diagnosis, but researchers don’t know the reason. Because Alzheimer’s and dementia affect the brain’s memory, it may be because their brain receives hunger signals but is unable to discern how to react to them. Some patients eat paper or other inedible objects.

Inability to recognize sarcasm. If you fail to recognize sarcasm or take it very literally and seriously, it may be a sign of atrophy in your brain. A study at the University of California – San Francisco found that Alzheimer’s patients and those with Frontotemporal Disease were among those who couldn’t recognize sarcasm in face-to-face encounters. The brain’s posterior hippocampus is impacted, which is where short-term memory is stored and where a person sorts out such things, like sarcasm.

Depression. If someone has never suffered from clinical depression but develops it after age 50, it could be an early sign of Alzheimer’s. It doesn’t mean if you’re diagnosed with depression in older age that you will develop Alzheimer’s or other cognitive decline. However, get treatment soon because some researchers believe that hormones released in the depressed brain may damage certain areas of it, leading to the development of Alzheimer’s or other dementia.

Unfocused Staring. Alzheimer’s Disease is a change in cognitive and executive functioning in the brain. This means that your ability to recall facts, memories and information is compromised, as well as the ability to make decisions. The brain becomes unfocused and staring in a detached way may be an early sign of so-called “tangles” in your brain.

If you are interest in this topic, I also wrote a blog on early onset dementia more generally which you can find here.  https://galligan-law.com/what-do-we-know-about-early-onset-dementia/

These symptoms may be signs of early-onset Alzheimer’s Disease, or they may be the signs of other underlying issues. If you or any of your loved ones have any of these signs, consult your doctor.  This may be a sign of something else but talk to your doctor to be safe.

Reference: Considerable (May 12, 2020) “7 surprising early signs of Alzheimer’s”

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Is Long Term Care Insurance Really a Good Idea?

Clients are often concerned that long term care insurance is too costly, but it may not be compared to the cost of private paying long term care.

Forbes’ recent article entitled “Is Long-Term Care Insurance Right For You?” says that a big drawback for many is the fact that long term care insurance (“LTCI”) is expensive. However, think about the costs of long term care. For example, the current median annual cost for assisted living is $43,539, and for a private room in a nursing home, it’s more than $92,000.  In many urban areas it is much higher, so utilizing long term care insurance my be best.

Another issue is that there’s no way to accurately determine if in fact you’ll even need long term care. Much of it depends on your own health and family history. However, planning for the possibility is key and unfortunately most clients don’t plan for long term care either with insurance, retirement or in their estate plans.

Remember that Medicare and other types of health insurance don’t cover most of the cost of long term care—what are known as “activities of daily living,” like bathing, dressing, eating, using the bathroom and moving. Medicare will only pay for medically necessary skilled nursing and home care, such as giving shots and changing dressings and not assisted-living costs, like bathing and eating. Supplemental insurance policies generally don’t pay for this type of care.  Those who meet financial guidelines may receive care provided under Medicaid or other benefits such as Veterans benefits.

It is important to shop around as there are no one-size-fits-all long term care insurance policies. Check the policy terms and be sure you understand:

  • The things that are covered, such as skilled nursing, custodial care, assisted living and in home care
  • If Alzheimer’s disease is covered as it’s a leading reason for needing long-term care
  • If there are any limitations on pre-existing conditions
  • The maximum payouts, including if maximum payouts are by day or year
  • If the payments are adjusted for inflation, which depending on the time of purchase might be key
  • The lag time until benefits begin
  • How long benefits will last, including whether there are lifetime caps on the amount paid or time periods paid
  • If there’s a waiver of premium benefit, which suspends premiums when you are collecting long-term care benefits
  • If there’s a non-forfeiture benefit, which offers limited coverage even if you cancel the policy
  • If the current premiums are guaranteed in future years, or if there are limits on future increases
  • How many times rates have increased in the past 10 years
  • If you purchase a group policy through an employer, see if it is portable (if you can take it with you if you change jobs).

Typically, when you are between 55 to 60 is the most cost-effective time to buy LTCI, if you’re in good health. See my prior blog on this point.  https://galligan-law.com/when-should-i-consider-long-term-care-insurance/   The younger you buy, the lower the cost. However, you will be paying premiums longer. Premiums usually increase as you get older and less healthy. There’s a possibility that you’ll be denied coverage, if your health becomes poor. Therefore, while it’s not inexpensive, buying LTCI sooner rather than later may be the best move.

The best thing to do is to consult your financial advisor and your insurance agent on whether a LTCI policy, and which, will work best for you.

Reference: Forbes (April 17, 2020) “Is Long-Term Care Insurance Right For You?”

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