Have you ever been interrupted during something important by a phone call from an unknown number within your area code? The first one you let go, but in the back of your mind you come up with all the important messages that call could be trying to deliver. Is someone hurt and trying to call you? Has there been some emergency? While those thoughts stir in the background, the same number calls you again. This time you pick up, sure it is terrible or important news only to hear “Congratulations! You have won a free cruise to the Caribbean”. This kind of attempted exploitation is easy to stamp out, and all you have to do is hang up the phone. Unfortunately, attempts to steal your personal information and money can take on many, less obvious forms.
The term “financial exploitation” means the illegal act of taking economic advantage of someone for one’s personal gain. Examples of this include forging checks, bank account theft, and abusing a power of attorney authorization. Financial exploitation is on the rise today as the baby boomer generation reaches their 60s and 70s, and begins to rely more on caregivers and family members to help them manage their health and financial matters. According to the Senate Special Committee on Aging, senior citizens lost an estimated $2.9 billion from financial exploitation in 2018. Unfortunately, only 1 out of every 44 cases gets reported to local and federal law enforcement. It’s important to note that senior citizens are not the only adults at risk of financial exploitation. Any adult relying on others down the road to make financial decisions for them, can fall victim to this type of crime. This can happen when family members, “friends” and caretakers begin demanding personal loans after learning about the vulnerable state of health of the adult. If the vulnerable adult is dependent on the individual for health care services or other necessities, they may feel pressured to lend them the money.
Federal and state authorities along with financial institutions, have recognized this growing crime against vulnerable adults & senior citizens, and have passed laws and created new best practices for preventing this type of fraud. As a fiduciary, Merriman takes great pride in putting our client’s best interests first. If we suspect you may be the victim of financial exploitation, we will take the appropriate steps to protect you and your assets. That may mean reporting the incident to state authorities such as Adult Protective Services or working with your account’s custodian to prevent funds from being withdrawn.
Since this is an important decision, and one we do not take lightly, Merriman has recently created its own form that allows us to contact a designated individual(s) when we suspect our clients may be victims of financial exploitation and their health status is the primary reason. This allows us to be in touch with someone familiar to your specific situation who can give us additional information to dispute or validate our concerns.
We encourage you to be mindful of this growing risk, shield yourself from personal relationships that center around you giving them money, as well as designate a trusted contact for your advisor or custodian to reach if they suspect you may be the victim of financial exploitation. Please note that this individual will not be authorized to make financial decisions for you.
At Merriman, we believe it is important to help you do more than just grow your wealth. It is for this reason we share this concern as a way to help protect the wealth that you have worked countless years to accumulate, and to keep it away from those looking to exploit your hard work and discipline. We encourage you to ask your advisor about completing a Trusted Contact Form during your next review to ensure they know who to contact if they believe you may be the victim of attempted financial exploitation.
If you believe you would be a good Trusted Contact person for a close friend or family member, please feel free to use this article to start the conversation with them about placing you in that role. That way you can help to look out for them in the same way your Trusted Contact will look out for you.
With the arrival of our first child fast approaching, my wife and I in all of our excitement have been working through a to-do list to prepare for this lifechanging event. While we know we have many surprises ahead, taking the time to learn, ask questions and plan for what’s coming can only help us.
My focus has been planning for the next generation of our family, but this experience caused us to start asking our parents questions we hadn’t before. (more…)
College tuition ranks among housing and medical expenses as having the highest lifetime costs for many Americans. Making matters worse, planning for college involves a daunting landscape of savings plans, loans, scholarships, and trying to build the foundation for your children’s future. If you would like to help your child pay for college, we recommend saving for costs ahead of time. We’ve already reviewed flexible options for college savings like 529 Plans, Coverdell ESAs and UTMAs. This article covers the financing options you have to supplement those savings when it comes time to actually pay for college. (more…)
As the parent of two young children, college planning is certainly on my mind, even at just 3-years and 6-months-old. While there are multiple options when saving for college, I’ve created 529 plans for my kids, which provide several benefits.
This post examines 529 plans and their benefits, followed by a description of how I’ve chosen to invest my 529 accounts. (more…)
I recently heard a TED Radio Hour story on NPR about Lux Narayan, an entrepreneur and data analyst. His organization spent two years analyzing the obituaries in The New York Times, looking for threads of commonality between the people who were featured. Then, his team created a word cloud of the text to show which words turned up most often.
One word showed up in large, bold type is help, because these people made a positive impact on the lives of others. They helped. (more…)
ABLE, short for Achieving a Better Life Experience Act, is a type of savings plan established in 2014 to provide support for those with disabilities. The accounts are similar to traditional 529 plans in that contributions can grow and be distributed tax-free for qualified expenses. The difference between a college savings 529 plan and an ABLE 529A savings plan is that ABLE funds can be withdrawn tax free to cover qualified disability expenses versus just qualified education expenses.
Does having assets in an ABLE account impact federal benefits?
Assets in an ABLE account won’t impact federal benefits unless the balance exceeds $100,000. Any excess beyond $100,000 in an ABLE account is considered personal assets, and once personal assets exceed $2,000 (such as in their checking account), Social Security benefits are suspended. This means that if assets in an ABLE account are $100,000 or more, plus checking or any other account surpass $102,000, Social Security benefits are halted. Social Security benefits resume once personal assets fall below $2,000 ($102,000 including $100,000 in ABLE account).
If you take distributions from your ABLE account for qualified housing-related expenses and retain them to be paid the following month (such as paying rent the following month), those distributions are countable resources for Social Security.
ABLE accounts do not impact Medicaid eligibility. However, upon the death of the recipient of aid, Medicaid can claim assets, such as those in an ABLE account, for payback. Outstanding qualified disability expenses, such as burial costs, receive priority over Medicaid claims. If Medicaid payback claims are greater than the remaining ABLE account, there is no further recourse against the disabled beneficiary’s other assets. (more…)