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durable power of attorney

11 Things You Can Do To Protect From Elder Scams

By Uncategorized

Exploitation of the Elderly

Scams targeting the elderly have become an increasingly concerning issue, exploiting vulnerabilities and often resulting in significant financial and emotional distress for victims. These scams can take various forms, including telephone fraud, internet phishing, and even door-to-door schemes, where scammers use deceitful tactics to gain trust before swindling their targets out of money or personal information. The elderly, often perceived as more trusting and less tech-savvy, are particularly at risk.

These scams not only lead to the loss of life savings but can also cause a profound sense of betrayal and a decrease in quality of life. Awareness and education are key in combating these malicious acts, as is the implementation of stronger protective measures by families, communities, and authorities to safeguard the well-being of the elderly population.

The Role of the Lawyer

Lawyers play a crucial role in advising and protecting individuals, including the elderly, from the pervasive threat of scams. Their expertise in legal frameworks and rights enables them to offer invaluable guidance on how to recognize and avoid fraudulent schemes. By educating clients about the common characteristics of scams, such as unsolicited communications or too-good-to-be true offers, lawyers empower them to act with caution and skepticism. Furthermore, in the unfortunate event of falling victim to a scam, lawyers can provide critical assistance in navigating the complex legal avenues for recourse, such as reporting the crime to the appropriate authorities, and pursuing litigation or other legal actions to recover lost assets. Their advocacy and intervention are essential in not only providing a safety net for victims but also in fostering a broader awareness and deterrence of scams in the community.

Some practical advice for clients includes:

• Refrain from sharing your personal details over phone calls, through the mail, or online.
• If an offer seems unclear or suspicious, it’s best to ignore it.
• Ensure you get a written estimate for any job and make payments only after the work is completed to your satisfaction.
• Properly dispose of any documents containing your credit card information by shredding them.
• Protect your Medicare, Social Security, and credit card information diligently.
• Avoid signing documents that are blank or consenting to open-ended permissions.
• Exercise caution when approached by telemarketers or door-to-door sales agents, unless they are known and trusted by you.
• Approach offers that claim to be free with skepticism, as they may have hidden costs.
• Stand your ground against high-pressure sales tactics that aim to coerce you into making purchases.
• Steer clear of conducting business with unfamiliar companies.
• Be vigilant against telephone fraud, particularly scenarios where someone pretends to be a relative in distress requiring financial help.

 

Need to discuss a plan for your loved one? Call us for a no obligation consultation.

9 Estate Planning Terms You Need To Know

By Estate Planning

Estate Planning Terms

No one likes to think about one’s own death. However, planning ahead can help your family avoid unnecessary complications, delay, and expense. This may be done through wills, trusts, joint ownership, and life insurance. In addition, modern estate planning also includes “life” planning through powers of attorney and health care proxies. These enable someone else to act for you in the event of your incapacity. Understanding the following terms is the first step toward planning your estate. However, no estate planning steps should be taken without consulting with a qualified professional.

  • Probate

This is the name for the process in the Probate Court through which the ownership of your assets passes to your heirs. It includes the collection of your assets, the payment of your bills, and the distribution of your estate. It only covers what you own outright, not joint property, trust property, life insurance proceeds, or any assets that have beneficiaries or payable-on-death terms.

  • Will

Your will is a legally binding statement of who will receive your property at your death. It also appoints a legal representative to carry out your wishes. However, the will only covers probate property.

  • Estate Tax

The estate tax applies to both the probate and the nonprobate property of the decedent. For federal purposes, the amount free from taxation is $5.6 million as of 2018 per individual, $11.2 million per married couple. For Rhode Island, a person can pass $1,537,656 free from estate taxation.

Reading your Estate Planning documents is critical to understanding your plan

  • Marital Deduction

On the federal level, anything passing to the surviving spouse of a decedent is not included in the taxable estate and, consequently, is not subject to taxation. All of the couple’s assets are then taxed upon the death of the surviving spouse, unless an estate tax plan has been executed.

  • Trust

A trust is a legal entity under which one person—the “trustee”—holds legal title to property for the benefit of others—the “beneficiaries.” The trustee must follow the rules provided in the trust instrument. An irrevocable trust is one that cannot be changed after it has been created. A revocable trust is one that may be changed or rescinded by the person who created it. Trusts are often used for tax planning, to provide for someone with expertise to manage assets, or to shelter assets to protect them from creditors or for long-term care planning.

  • Durable Power of Attorney

Under a power of attorney, you may appoint someone else to act for you when you are unable to do so yourself. The reason may be your mental incapacity or your inability to be somewhere when needed. The person you appoint—your “attorney-in-fact”—must always act in your best interest and try to make choices you would make if you were able to do so.

  • Health Care Proxy

Similar to a power of attorney, through a health care proxy you may appoint someone else to act as your agent—but for medical, as opposed to financial, decisions. Unlike a power of attorney, the health care proxy does not take effect until your doctor determines that you are incapable of making decisions yourself. Before that decision, your agent may make no decisions on your behalf. You may include in your proxy a guideline for your agent to use in making decisions. These may include directions to refuse or remove life support in the event you are in a coma or a vegetative state. On the other hand, your instructions may be to use all efforts to keep you alive, no matter the circumstances.

  • Community Spouse Resource Allowance (CSRA)

If your spouse has to move to a nursing home, you will have to pay for his or her care out of pocket until he or she qualifies for Medicaid. Under the Medicaid program the nursing home spouse may only have $4,000 in “countable” assets. (Noncountable assets include your home, household belongings, one car, and prepaid funeral plans.) The amount the healthy spouse is permitted to keep under the Medicaid program is known as the “community spouse resource allowance” or “CSRA.” The CSRA is all of the couple’s combined assets up to a cap of $123,600 (in 2018). In some cases, the community spouse is entitled to retain assets above the $123,600 limit when her income is less than the minimum monthly maintenance needs allowance, which is described below.

  • Minimum Monthly Maintenance Needs Allowance (MMMNA)

The Medicaid rules also govern the amount of income the community spouse is entitled to once the nursing home spouse qualifies for Medicaid. Normally, the community spouse keeps his or her income and the nursing home spouse pays his or her income to the nursing home, keeping only a $50.00-a-month “personal needs allowance.” However, if the healthy spouse’s income is low, he or she may be entitled to a share of the nursing home spouse’s income. In each case where a married nursing home resident qualifies for Medicaid, the Department of Human Resources calculates a “minimum monthly maintenance needs allowance” or “MMMNA” for the community spouse based on his or her housing costs. This will range from a low of $2,057.50 to a high of $3,090.00 a month (in 2018). If the community spouse’s own income is below his or her MMMNA, he or she will be entitled to a share of the nursing home spouse’s income to make up the difference.

Want to learn more? Contact Attorney Matthew J. Leonard, Esq. at 401-401.648.7000 or at mleonard@smsllaw.com to arrange for a free consultation.

GUARDIANSHIP: What You Need To Know

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What is guardianship?

Guardianship is a legal relationship whereby the Probate Court gives one person (the guardian) the power to make personal and financial decisions for another (the ward). Some states have separated guardianship into two roles—a guardianship or power over the person, and a conservatorship for power over the finances. A guardian may be appointed when a Probate Court determines that an individual is unable to care for herself and her estate by reason of mental illness, inguardianship-handstellectual disability, or physical incapacity.

When is guardianship appropriate?

Guardianship is appropriate when impaired judgment or capacity poses a major threat to a person’s welfare. A medical evaluation by a licensed physician is necessary to establish the proposed ward’s condition. However, only a court can determine the need for a guardian.

How can I become a guardian?

Assuming that a physician is prepared to attest to the proposed ward’s incompetence, a petition must be filed with the Probate Court requesting the appointment of a guardian. Two petitioners must sign the petition and the proposed guardian must file a bond with the court. Then, the court directs that the heirs of the ward and the ward herself receive notice of the filing of the petition for guardianship. The court sets a date by which anyone wishing to object may do so, including the proposed ward. Then a hearing is held where a judge decides whether a guardian should be appointed.

How long does this appointment last?

A temporary appointment can last 90 days. A permanent appointment may last until the death of the ward or the guardian, until the ward is able to establish that she is competent, or until the guardian resigns or is removed by the Probate Court.

What authority does the guardian have?

Unless limited by the court, the guardian has total control over the finances and the personal decisions of the ward. This includes deciding where the ward will
live, determining how the ward’s funds will be spent, and making routine medical decisions for the ward. For medical decisions involving extraordinary medical care, the administration of antipsychotic drugs, commitment to a mental health facility, or the sale of the ward’s real estate, the guardian has to seek the approval of the court in a separate proceeding to expand his or her powers.

guardianWhat are the responsibilities of the guardian?

In addition to those concerning authority to consent to medical treatment, the guardian must account carefully for all of the ward’s income and any expenditures made on his or her behalf. This is accomplished by the guardian filing an inventory listing the ward’s assets with the court as of the date of appointment and by filing annual accounts with the court detailing all the income and expenses the ward has. A final account must be filed when the guardianship is terminated. The guardian is liable for her acts until the court allows (approves) the account.

What are the alternatives to guardianship?

There are several less restrictive alternatives to guardianship. These include the durable powers of attorney, representative payees, trusts, and health care proxies. Each of these options may avoid or delay the need for a guardian. These documents need to be executed before the individual is incapable of doing so due to mental impairment.

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Peace of Mind Checklist

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Estate Planning Peace of Mind Checklist 

Please check the following questions that are important to you:

Happy senior man and woman couple dancing and holding hands after finishing medicaid with RI medicaid planning

________ I am concerned about losing my assets to the high costs of long-term care for myself and my spouse. Will we lose everything to pay for care, or are there options (Medicaid Planning)?

________ My child is disabled. How can I protect his or her future (Special Needs Planning)?

________ How can I set things up so my kids’ inheritance will be protected if they get divorced or are sued (Asset Protection Planning)?

 

________ My parents are aging. What should I know to help them to remain independent and protect their assets (Medicaid Planning)?

________ How can I minimize or eliminate paying taxes upon my death (Tax Planning)?

________ Do I have to be wealthy to benefit from a living trust? What are its benefits (Probate Avoidance Planning)?

________ If I can’t make legal and financial decisions for myself, how can I be sure my affairs are conducted in my best interest (Durable                        Powers of Attorney) ?

________ If I am too ill to make health care decisions for myself, how can I be sure my wishes will be carried out (Health Care Power of                               Attorney)?

________ How can I be sure my money and property end up in the right hands when I’m gone (Estate Planning with Trusts)?

________ My parent just passed away. What do I do now (Probate Administration)?

Many of our clients came to us with the same questions. They all seek the same thing: PEACE OF MIND FOR THEMSELVES AND FOR THE ONES THEY LOVE.

Estate Planning is a general term the encompass each of the stated questions and concerns above. The paths of Estate Planning are:

  • Medicaid Planning
  • Special Needs Planning
  • Asset Protection Planning
  • Tax Planning
  • Probate Avoidance Planning
  • Long Term Care Planning
  • Disability Planning – Powers of Attorney – Financial and Medical
  • Planning with Trusts
  • Probate and Estate Administration Planning

Contact us for estate and elder law planning solutions, PROVIDING YOU WITH PEACE OF MIND BY ADDRESS ALL YOUR  LIFE’S CONCERNS AND GOALS THROUGH DRAFTING AN ESTATE PLAN THAT ADDRESSES YOUR GOALS.

Call our office today at 401.648.7000

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10 Questions About Durable Power of Attorney

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Durable Power of Attorney

Whether young or old, married or single, a durable power of attorney can be an effective, time saving and cost avoiding document that all persons should consider including in the Estate Plan.

  • What is a power of attorney?

A power of attorney is the grant of legal rightsPower of Attorney and powers by a person, the “principal,” to another, the “agent” or “attorney-in-fact.” The attorney-in-fact, in effect, stands in the shoes of the principal and acts for him or her on financial and business matters. The attorney-in-fact can do whatever the principal may do—withdraw funds from bank accounts, trade stock, pay bills, cash checks—except as limited in the power of attorney. This does not mean that the attorney-in-fact can just take the principal’s money and run. The attorney-in-fact must use the principal’s finances as the principal would for his or her benefit.

  • When does the power of attorney take effect?

Unless the power of attorney is “springing,” it takes effect as soon as it is signed by the principal. A “springing” power of attorney takes effect only when the event described in the instrument itself takes place. Typically, this is the incapacity of the principal as certified by one or more physicians.

  • Does the power of attorney take away a principal’s rights?

No, absolutely not. Only a court can take away a principal’s rights in a conservatorship or guardianship proceeding. An attorney-in-fact simply has the power to act along with the principal.

  • Can the principal change his or her mind?

Certainly. A principal may revoke a power of attorney at any time. All a principal needs to do is send a letter to his or her attorney-in-fact telling them that their appointment has been revoked. From the moment the attorney-in-fact receives the letter, he or she can no longer act under the power of attorney.

  • Can an attorney-in-fact be held liable for his or her actions?

Yes, but only if he or she acts with willful misconduct or gross negligence.

  • Can an attorney-in-fact be compensated for his or her work?

Yes, if the principal has agreed to pay the attorney-in-fact. In general, the attorney-in-fact is entitled to “reasonable” compensation for his or her services. However, in most cases, the attorney-in-fact is a family member and does not expect to be paid. If an attorney-in-fact would like to be paid, it is best that he or she discuss this with the principal, agree on a reasonable rate of payment, and put that agreement in writing. That is the only way to avoid misunderstandings in the future.

  • What if there is more than one attorney-in-fact?

Depending on the wording of the power of attorney, you may or may not have to act together on all transactions. In most cases, when there are multiple attorneys-in-fact the power of attorney document specifies that they can each act independently of one another. Nevertheless, it is important for them to communicate with one another to make certain that their actions are consistent.

  • Can the attorney-in-fact be fired?

Certainly. The principal may revoke the power of attorney at any time. All he or she needs to do is send the attorney-in-fact a letter to this effect. The appointment of a conservator or guardian does not immediately revoke the power of attorney. But the conservator or guardian, like the principal, has the power to revoke the power of attorney.

  • What kind of records should the attorney-in-fact keep?

It is very important that the attorney-in-fact keep good records of his or her actions under the power of attorney. That is the best way to be able to answer any questions anyone may raise. The most important rule to keep in mind is not to commingle the funds the attorney-in-fact is managing with his or her own money. Keep the accounts separate. The easiest way to keep records is to run all funds through a checking account. The checks will act as receipts and the checkbook register as a running account.

Want to learn more about Durable Power of Attorney’s? Contact our office to schedule a no-cost consultation to discuss how Powers of Attorney fit into your current Estate Plan.

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