Feb 7, 2016

New Social Security scam looks real but don't fall for it

The email's subject line says "Get Protected," but following its instructions will do anything but. The sender appears to be the "Social Security Administration," but it's not.

It's a new and devious phishing scam. The real Social Security Administration is warning consumers about it because the email looks so authentic. The email states that the Social Security Administration has new features that will alert you to unauthorized use of your Social Security number and help you monitor your credit reports. The email even refers to a piece of legislation called the "S.A.F.E. Act of 2015" - which doesn't exist.

If you get a phishing email like this in your inbox, don't click! If you do, malware will immediately get installed on your computer. And don't click on any links in the email. Those links will send you to a fake Social Security website that will prompt you for personal information.

Instead, forward the email to spam@uce.gov. Then delete it. You might also want to warn your family and friends about this new scam.

Feb 4, 2016

HIPAA developments, dilemmas

Recent reports from Pro Publica, the independent investigative news organization, reveal widespread violations of HIPAA (the Health Insurance Portability and Accountability Act) by large organizations, from Walmart to CVS to United Health Care to the Veterans Administration. Ironically, this sad state of affairs regarding patient's privacy rights does not mean you can ignore HIPAA in your own estate plan. The behemoths may be playing fast and loose with patient data, but your own providers are hopefully more judicious. If you're in the hospital, your attending doctor probably won't want to (and definitely shouldn't) discuss your condition with your adult son unless you have so authorized it. Don't count on the college infirmary telling you why your 19-year-old has been admitted unless your child has given you legal authority to get that information.  You should always discuss with your estate planning/elder law attorney who you want to access your privileged medical information, and your preferences should be put into the appropriate written documents.

Which brings me to another HIPAA-related irony: Patients can face obstacles getting access to their own medical records, even though the law guarantees them that right. In fact, difficulty obtaining records is among the top complaints handled by the Office for Civil Rights at the Department of Health and Human Services. 

Perhaps some health providers don't understand their obligations under HIPAA. Or perhaps they feel that the information will be misunderstood by the patient. No matter. Today, with so much health information available from authoritative sources, people want to be in control of their care and want to be able to get at their own medical records. And the law entitles them to do so.

To get the message across to health care professionals, the Obama Administration recently updated the guidelines regarding patient access to medical records. Under the revised rules, the patient need not furnish the provider with the reason he/she is requesting the records. Also, records cannot be withheld on the basis of a patient's unpaid bill. Providers may not charge for the retrieval and location of patient records, although a fee may be imposed for duplicating them. Records should be released to the patient within 30 days of the request, although extensions are possible under certain circumstances.  

There are a few exceptions to the rule. For example, a medical provider can refuse to provide copies of a patient's medical record if the provider believes doing so may endanger the life or physical safety of a patient. Psychotherapy notes also get special treatment.

You can read the Obama Administration's guidelines for releasing medical records to patients here.

Jan 31, 2016

Why aren't the presidential candidates talking about the long-term care crisis?

With so many families struggling with the financial and psychological stress of caregiving, why aren't the 2016 presidential candidates making this a front-and-center issue? NPR Commentator Cokie Roberts has said, "Candidates are crazy not to mention it, because it is what most families are dealing with. Fully a third of households in America are taking care of an elderly or disabled member."  

A recent article on the website www.nextavenue.org tries to ferret out the reasons for this lack of attention. One possible and rather depressing reason: no one sees any achievable solutions to a problem of this magnitude. Another reason offered by a prominent caregiver advocate: caregivers have so much on their plates that cannot spend the time and energy needed for grassroots organizing.

You can read the full article here.

Jan 18, 2016

Bank accounts, photos, even Solitaire: Fiduciaries may faceuphill battle accessing your online information

We consistently remind clients that their estate plans must include arrangements to enable the person(s) of their choice to access their digital assets should incapacity strike or death occur. Most of us have password-protected, encrypted online lives. And it's not just bank accounts; it's all manner of information. Online providers take privacy very seriously. If you fail to make appropriate arrangements in advance, your fiduciaries could find it hellishly difficult to access your on-line assets.

How difficult? Well, this recent story from Canada demonstrates how high your family and fiduciaries can be required to jump to access your digital information - if they can get to it at all.

Peggy Bush, a 72-year-old British Columbia resident, shared an I-Pad and an Apple account with her husband. He passed away from lung cancer in August 2015. Following his death, Peggy could not download a card game she had long enjoyed playing on the couple's shared I-Pad. That's when she realized did not have the password to the Apple account. Evidently her husband had taken it to the grave.

Peggy and her family contacted Apple, furnishing the digital giant with a notarized death certificate and a copy of her late husband's will. After months of back-and-forth communication, Apple responded:  In order to reset the password, Peggy had to obtain a court order. Yes, a court order, with all the attendant hassle and costs. Incredulous, Peggy's daughter told the Canadian Broadcasting Company: "I was just completely flummoxed. What do you mean a court order? I said that was ridiculous, because we've been able to transfer title of the house, we've been able to transfer the car, all these things just using a notarized death certificate and the will." Watch a CBC video about the Bush family's experience here.

After the press got involved, Apple relented and allowed Peggy to change the password. She's now back to enjoying her card game on her I-Pad. But Apple, like many online providers, still doesn't seem to have a coherent policy regarding how deceased or disabled users' fiduciaries can access online information. "We'd really like Apple to develop a policy that is far more understanding of what people go through, especially at this very difficult time in our family's life, having just lost my dad," Bush's daughter told the press.

We would like that, too. And here in Florida, it looks like it may happen. As I reported in a post last year, the Florida Fiduciary Access to Digital Assets Act (Senate Bill 494) is now making its way through the state legislature. On January 14, 2016, it cleared the State Senate Committee on Fiscal Policy, with support from AARP, ATT, Facebook - and yes, Apple. The bill would establish a clear method by which someone(s) can be authorized to access and control an individual's digital assets, from electronic bank statements to photos, from text messages to Solitaire. You can read more about the bill and follow its progress here. It's a good start to end what can be a quagmire for many families.

Jan 12, 2016

Thieves can steal from you (and you don't even have to be alive)

If there's a way to make a dishonest buck, you can be sure someone, somewhere will find it and exploit it. And because scammers always zero in on the most vulnerable people, families dealing with the death of a loved one - and even the dearly departed themselves - are prime targets.

Scams can take many forms. Theft of decedents' identities is rampant; according to the fraud prevention company ID Analytics, more than two million decedents' identities are stolen annually. Credit cards accounts are opened and fraudulent tax returns are filed in this manner.

As to scams targeting bereaved families, here's a partial list:
  • Posing as a creditor of the deceased and demanding payment from surviving family members. (Unless you are on the deceased's account or have co-signed, you are not responsible for a decedent's debts.)  
  • Having an empty package delivered to a surviving family member's home and demanding payment for it, under the pretense that the deceased ordered it.
  • Contacting a family member and posing as a relative of the deceased, then asking for money to cover transportation to the funeral.  
  • Burglarizing the home when occupants are at a funeral.
How do scammers get access to the information they need to pull off their mischief? Obituaries are a prime source. Therefore, as much as you are tempted to sing the praises of your late loved one, it's prudent to keep obituaries to the point and omit unnecessary details. Don't publish home addresses or the decedent's mother's maiden name. You can mention the age of your late loved one, but leave out date of birth.

Here are some additional preventive steps family members can take as soon as they are up to it after a loved one's death:
  • Notify the Social Security Administration.
  • Notify banks, charge accounts, insurers, brokerages, mortgage companies and other financial institutions.
  • Carefully review all bills that may arrive for the decedent, and demand verification if contacted by a decedent's creditor.
  • Contact the three major credit reporting agencies: Equifax (800-525-6285), Experian (888-397-3742) and Transunion (800-680-7289). Ask that they flag the file as "deceased - do not issue credit."   
  • Remove the decedent's name from joint accounts.
  • Notify the Division of Motor Vehicles.

The above are steps you can take to prevent identity theft and other scams after someone dies. What about before? If you are establishing an estate plan and are concerned about privacy, you may want to consider establishing a trust instead of a will. A will becomes public record once filed and thus, can be mined by would-be thieves for information about the decedent, beneficiaries, distributions, etc. A trust, on the other hand, is a private document and thus affords your family greater privacy. You can read more about wills and trusts at my website.

For more information on decedent identity theft from the Identity Theft Resource Center, click here.

Jan 6, 2016

Can someone with dementia sue for divorce? Palm Beach County Court says no

Estate planning is as much about planning for life's curve balls as it is about what happens when you are gone. A recent Florida case demonstrates how failing to anticipate those curve balls can plunge a family into chaos.The key question in this case came down to whether a person with dementia can sue for divorce, but there were many preceding legal twists and turns along the way. For simplicity's sake, I'll break down the case to its essential elements:

Palm Beach resident Martin Zelman, a wealthy real estate investor with three adult children from a prior marriage, married his second wife, Lois, in 2000. Under the terms of the couple's prenuptial agreement, if they were married when he died, Lois would get $10 million in cash and property, be allowed to continue residing in their New York and Palm Beach homes, retain their club memberships, and keep their cars and artwork. But if they were divorced, Lois was to receive nothing from his estate - provided that Martin initiated the divorce proceeding.  Here's the catch, though: The prenup made no mention of what would happen if either became cognitively impaired.

And that's just what happened to Martin. As his dementia worsened, his son, Robert, petitioned the Palm Beach County Probate Court for guardianship, claiming that his stepmother was not giving his father the necessary care and was agitating him. Many of the couple's friends, and even their rabbi, testified that the Zelmans appeared to be a loving couple. Yet testimony from caregivers seemed to support the notion that Lois was abusing Martin. Ultimately the court sided with Robert, appointing the children as Martin's guardians and ordering Lois to vacate the couple's Palm Beach condo.

As a ward, Martin lost many rights, including the right to sue and be sued. This is a crucial point, because in order for the children to get $10 million more from Martin's estimated $50 million estate, Martin had to be divorced from Lois prior to his death. And the prenup stated it was necessary for Martin himself, not the guardian, to sue for divorce. Unsurprisingly, his son later petitioned the court, successfully, to restore his father's right to sue and be sued.

Still with me?

Now the divorce saga began. As Zelman v. Zelman worked its way through the court system, Zelman's children and their stepmother accused one other of being more interested in Martin's money than his welfare. The children contended that their father had told them he was miserable with Lois. They claimed they didn't even know about the terms of their father's prenup when they first petitioned the court for guardianship. "It was never about the money," Robert said. For Lois' part, she claimed she still loved her husband of fifteen years, the children were trying to push her out of the picture out of pure greed, the children were manipulating the courts, and her rights were being trampled on. “What makes it so sad is they broke up a love affair,” she said. 

In the end, it all boiled down to this question: Can someone with dementia sue for divorce? That's the question the court had to answer. In November 2015, Judge Charles Burton decided the answer is no. Burton found Martin to be incompetent, unable to understand what he was seeking, and therefore, not legally entitled to file for divorce. With that issue resolved, a settlement was hammered out by the lawyers for each side. It awarded Lois $9.75 million of her husband's assets, with the children continuing to serve as his guardians.  

As one of the lawyers on the case said, it must have been a fair settlement - because no one was completely happy with it.

While the Zelman case is unusual, our longer life spans, greater risk of experiencing diminished mental capacity, and more and more instances of blended families all mean we are likely to see more cases of families being plunged into this kind of legal minefield, particularly when significant money is involved. In other words, those curve balls are no longer quite so unusual. We must adjust by carefully planning for all the curve balls life can throw at us.

Dec 17, 2015

The scoop on U.S. government savings bonds

Do you have old paper U.S. savings bonds sitting around? Introduced in 1935, paper bonds were once the go-to gift for weddings, birthdays and other occasions. There are three things you need to know about those old bonds to determine what they are worth and whether you should redeem them: the type of bond, the maturity date, and whether they have matured or are still gathering interest.

There are three basic types of bonds:  
  • E bonds, and EE bonds issued more than 30 years ago, have matured and are no longer paying interest.
  • I Bonds: Those issued more than 30 years ago have matured.
  • H/HH: All H bonds, and HH bonds issued more than 30 years ago, have matured and are no longer paying interest.
To determine if your bond is still paying interest, go to the Treasury Department's  Savings Bond Wizard.  If it is still earning interest, you can keep the bond until it matures, or, if you think you could get a better return elsewhere, cash it in and put the money into a different and presumably better investment. If you decide to cash in the bond, whether mature or not, the interest is subject to federal income tax. However, if you are going to college or graduate school, you may be able to avoid the tax consequences and use the interest from EE and I bonds to pay for your educational expenses. Read more about that here.

Not every bank will cash savings bonds, so call around first to find one that will. The Treasury Department website does not maintain a list, unfortunately.  

Today, paper bonds are no longer issued. They can be purchased electronically only. If you don't plan to redeem your paper bonds, it's a good idea to convert them to electronic format using the Smart Exchange program. 

What about bonds that are inherited from a decedent, such as Series E bonds, which grow tax-deferred and therefore no income tax has been paid on the appreciation? (Unlike H bonds, which pay interest semi-annually). Since E Bonds are income tax-deferred, not tax-exempt, income tax must ultimately be paid. And unlike stocks with capital appreciation, there is no step-up in basis, which would provide income tax-free passage of the appreciation. The income tax can be paid as income with respect to the decedent (on the the decedent's final income tax return), or may be paid by the beneficiary of the bond. 

There are a numerous other rules that apply to purchasing, passing on and redeeming bonds. I suggest you check out TreasuryDirect.gov if you have additional questions: click here. (This link takes you to the section on EE bonds, but there are also clickable links for other types of bonds.)

Dec 9, 2015

IRS eases up on ABLE account regulations

As I reported earlier this year, Congress passed legislation in 2014 authorizing the establishment of tax-free ABLE accounts (acronym for "Achieving a Better Life Experience"). The ABLE program permits a disabled individual to maintain assets above $2,000, the current limit in order to qualify for federal benefits such as SSI and Medicaid

Up to $100,000 may be placed in an ABLE account. Funds must be used for services and items not covered by federal programs. Anyone can contribute to the account. To qualify, the individual must have developed the disability before the age of 26. Read my original February 2015 post for details on eligibility rules.

Since the law's passage, the IRS has been drafting regulations that will serve as guidelines for the states to implement their own programs. Some of the proposed regulations have come under fire from the states and disability advocates as being overly burdensome and impractical, and the IRS has backed off. For example:
  • The IRS originally required the financial institution housing the ABLE account to procure the taxpayer ID of each person who contributed to the account. This requirement has been scrapped, although the institution must put controls in place to prevent overfunding of the account.
  • The initial regulations required a disabled person seeking to establish an ABLE account to provide a doctor's note documenting the individual's diagnosis. The revised rules require that the individual must sign an oath, under penalty of perjury, indicating that he/she possesses such a note and is eligible to open an ABLE account. 
  • The financial institution housing the account will not be required to document distributions, as the original regulations required. Instead, the beneficiary must provide documentation that the funds have been used for disability-related expenses.

Read the IRS' revised interim regulations here. 

Read the Social Security Administration's detailed program instructions (POMS, Program Operations Manual System here.) 

Update 12/20/15: Under the new federal budget bill just signed into law by President Obama, the residency requirement for ABLE accounts has been abolished. This means that you may establish an ABLE account in any state that authorizes such accounts. The states may differ in their fee structures, investment options, etc., and thus, you will be able to select the states where ABLE regulations best suit your needs. The Florida ABLE program should be up and running sometime in 2016.
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