Elder Abuse: How to Spot it, What to do About it

Just typing the words "child abuse" makes me sick, and just plain mad. As I'm assuming it does for most. But what about "elder" abuse? Do you even know what it is?

We treat children specially because we have determined, as a society, that they are not responsible enough to be left alone, make their own decisions on important matters, or handle finances. Thankfully, the Texas Department of Family and Protective Services is there for the old folks too.

The department offers services for "any adult who has a disability or who is age 65 or older over that is in a state of abuse, neglect, or exploitation." Lets break this down into what this means, and how to look for it.


Scenario 1.
You have a (neighbor/friend/family member/parent hereafter "Papa") who is getting on in years and/or suffering from a disability. As a result, they require home health care. You have never really paid attention to Papa's finances, but have noticed that home health care attendant (hereafter "Anna Nicole") is coming around more often, and Papa is speaking about them more. You notice one day that Anna Nicole is driving a new, different car, and generally looks like she has new jewelry.

Then you ask Papa, and he tells you they are getting married.

What to do:

You can take a guardianship out on Papa to control his finances, but they are expensive. If he is competent, get a Power of Attorney over Papa. You likely just need to sit Papa down, tell Anna Nicole to get lost, and hope she hasn't done too much damage. Check Papa's bank accounts, insurance policies, and any brokerage or financial accounts, and see if Anna Nicole's name is there or if she has somehow become a beneficiary. Tell the police, but usually the best bet is to get Papa away from the damage and stop the bleeding. Also, report Anna Nicole to the Texas DFPS at 1 800 252 5400 so they will have her on record.

Scenario 2.

You have a (neighbor/friend/family member/parent hereafter "Nani") who lives alone and has no kids. Nani passes away, and leaves you, the favorite niece, in charge of the estate. You start going through Nani's finances and realize that something is amiss. You find in her personal papers, amongst her will, is a Power of Attorney naming someone you are not familiar with (hereafter, "John"). You do a little more digging and check the banking records, and realize that John has cleared out a significant amount of money from Nani's accounts. For a real life example, see here.

What to do:

Call the police. They prosecute this stuff. Hopefully you can try and get some of the money back, but you never know. The best way to fight it is prevention: talk with your elderly friends and make sure they have their estate and powers of attorney in order. You can't stop all fraud and exploitation, but you can prepare and try to limit the potential damage.


Conclusion:

I try and bring levity to most topics, but elder abuse is not funny on any level. Often, the above scenarios are much worse, and physical abuse, threats, and emotional abuse are going on as well. The point is that abuse is abuse, and we all deserve a voice. There are resources out there to stop this terrible practice. Lets educate ourselves, know the warning signs, and do something about it.
 

Its all about Trust

Who can you trust?  What can you trust? Can you trust your assets to a Trust?

People hear the word "trust" and think lots of things. Trust me. Trust fund. Trust fund baby. Bank and trust. Trust account.

I have previously written on the perils of the probate avoidance "living trust" and how people get scammed into making one.

So I will not belabor that. What I will focus on is a growing problem of choosing your trustee.

Scenario 1.
You are your own Trustee.

Ok, you out smarted the system. Who needs to trust anyone except themselves? Well, the government has figured that one out. They look at someone who created a trust, for their own benefit, who named themself as a trustee...as a nothing. You just put your wallet from your back pocket to the front, as you still have control. Your trust is pointless, and you probably were convinced you needed one by someone who didn't know what they were talking about.

Also, as an individual taxpayer, you have to earn $400k in 2013 dollars to hit the top, 39.6% tax rate. Got your business in a trust? You get there at $11,950.  That is a huge, huge tax hit, and that applies to all of these scenarios.

Scenario 2.
You pick a close family member as Trustee.

Ok, a little better. Don't pick a beneficiary, or their share loses any creditor protection like in scenario 1. Further, if you picked your wife/brother/son, what happens if they get mad at you? What if they get too busy? What if, they decide to invest all your assets in a great stock tip they heard, only to have it turn out to be a bust? Do you have any recourse? Are you going to sue your wife/son/brother? I didn't think so. Choose wisely here, and make sure they are not a beneficiary of the trust.

Scenario 3.
You pick a bank or institutional Trustee.

A pro trustee, banks are a safe bet. They are insured, know what they are doing, and have access to investment leverage and knowledge that most do not. However, they do not know your family (likely) and are not emotionally invested, so you might not be able to call them at midnight or on the weekend for an emergency. Also, they cost.

Conclusion:

Picking a trustee, like picking an executor for your will, is a big decision. If you are in over your head and know a family member or friend would be too, then trust a professional. If it doesn't make financial sense to pay someone, then pick someone whom you trust, who has the time, and will do a good job. Finally, unless you have talked to a professional about the limited instances you should be trustee over your own trust, don't. Just don't.

The Holographic Will

Sounds spooky, right? Sound eerily similar to the Smash 1995 hit, Hologram Man? Does it make you think of the resurrection of Hologram Tupac at last year's Coachella concert? (warning, explicit lyrics coming from Hologram 'pac. However, it was pretty amazing.)

Well, it's a lot like that. Kinda.

In Texas and many other states, there are a variety of things that pass for a will. According to the Texas probate code, a "holographic will" can pass for a valid last will and testament if it is written, and signed, "wholly in the handwriting" of the testator. They changed the handwriting part because the old statute just said writing, which led to the case where a fully typed out will being deemed valid, with even the signature typed out. Those are easy to forge, so they changed it.

What this really means: You can take a crayon, and write your will on a napkin. Really. According to a bunch of people and what I still cannot track down as a relevant source, a guy wrote "all to wife" on a bedroom wall, and this counted as a holographic will. A farmer in Canada allegedly scratched his will into the fender or a tractor, as he knew he was going to die. This worked.

I have also seen a husband and wife try to do a "joint" holographic will. You can do a "joint" will, if it is executed with all the formalities of a witnessed, attested normal will, but this does not work for a holographic will. Think about it: whoever did the writing of the "joint" holographic will and signs their name has made a valid will. However, the extra signature of the spouse makes the will fail because it is not "wholly in the handwriting" of the testator. (see Roberts v. Drake (Civ.App. 1964) 380 S.W.2d 657 if you want to read about the story there).  Then you're stuck, and your estate passes by intestate succession. (see my earlier post for what that means.)

But don't do this. I don't recommend holographic wills, mainly because they end up being more expensive for your estate than if you just paid someone (a lawyer) to do one. You have to "prove" the will in Court after you die, which requires witnesses, and usually a lawyer to quarterback everything. However, sometimes you just can't wait.

IF you must do a holographic will, take out a nice pen and paper, and do it right. Sign your name, and date it. Write out "this is my last will and testament, and I revoke any other prior wills by this writing." Then say what you want to happen.



 

Gun Trusts

Guns are a hot topic right now. Probably too hot, actually. I think we can all agree, whatever side of the fence you are on, that some sort of reform needs to be done, while respecting the Second Amendment. Either with background checks, closing the private seller loophole,  funding for mental health, or something else. But enough politics.

That said, guns are still legal to own in Texas, and many of my clients have guns. Some of these guns are already required to be specially registered with the Bureau of Alcohol, Tobacco, and Firearms (ATF) as they fall into a special class of items under the terms of the National Firearms Act (NFA).

Background:

The 1934 National Firearms Act was essentially a tax levied by Congress, but the real purpose was to thwart and curtail possession of "gangster" type weapons, some thought to be a specific response to the St. Valentine's Day Massacre allegedly orchestrated by Al Capone. All sound suppression devices, short barreled rifles and shotguns (less than 18 inches in length), machineguns, and a catch-all class of "other weapons" were listed, and a $200 tax stamp was imposed on any transfer.  That was a lot in 1934 dollars, and it worked. Weirdly,  it has not changed since.

The registration also required detailed data that the government then used to prosecute registrants who lived in states where possession was illegal, or that could not possess the items for other reasons. Sound like entrapment? Well it was.  This lasted until the Supreme Court held that using the self-supplied information for prosecution violated the 5th Amendment protection against self-incrimination.

A 1968 amendment fixed the problem, and you now cannot be prosecuted for a violation prior to or concurrent with your application to register an item. However, after a 90 day moratorium, this also took away the mechanism to register a currently unregistered NFA item, interestingly enough. So, if you have, or come upon, an unregistered NFA item, run away. You're breaking the law. And call a lawyer.

Current Status:

The NFA is still in effect. You still have to go through this process if you want any of the above listed items. Recently, Texas, along with a number of other states, has approved the use of sound suppression devices/silencers for hunting use.  This has been met with some controversy, as many people think of "silencers" as something assassins use in movies to kill people. Hence, why they are included in the same category as a machine gun. Others, (such as the Finnish Government, where you can apparently purchase a silencer at any hardware store) think that silencers/sound suppression devices should be mandatory,  due to the noise associated with firearms and the potential for hearing loss of those nearbye, and are very much different than machine guns. With that, and the current rush to try and buy any and all firearm related items before any new legislation, many individuals are purchasing items listed under the NFA.

NFA Application process:

Should you decide to purchase a NFA item, there is a process to go through. A long process. Once your item arrives from a licensed dealer, you must complete an ATF form 4 transfer.  It is not very complicated, but you will need the serial number of the item, a valid description, and some more identifying information.

If you decide to apply for the item in your name, then after your dealer fills in the required info, you have to submit a photo, fingerprints, and have the chief law enforcement officer (sheriff or police chief) sign off on your application. This can be a pain. Further, only you can possess the NFA item. If you let someone borrow it, they are breaking the law. If you pass away, then your heirs might be breaking the law if the proper structure is not in place.

Here is where a "gun trust" comes in. With the trust format, you apply as settlor/trustee of a trust. This way, you do not have to give your photograph, fingerprints, or have the chief law enforcement officer sign off. This saves a little time in the application process. The real benefit, however, is that it allows any of your named trustees to possess the item outside of your presence. This allows your family and hunting buddies to share in your item and not break the law. Further, many trusts set out a beneficiary designation, so you can dictate exactly who the item will go to, instead of just to your estate. All good things.

Regardless of what route you take, the background check process is extensive. A gun trust will not, I repeat, WILL NOT, allow someone who would otherwise be disqualified from possessing an NFA item to acquire it. They still run a background check on you. Either way, several months or more are common wait times to hear back.

Conclusion:

A "gun trust" is what it sounds like, and it is also not what people think. It is not an asset protection device, and it is not a place to put all your guns. I get lots of calls asking for both of these, but that is not the purpose of this specific trust. The best use, until the law changes one way or the other, is for the responsible use and acquisition of NFA items. Nothing more. That said, it is a very useful tool for those who have that specific need.

Protect your ASSets.

Pun intended. Watch Nightline lately? Or most any other news program or paper?  Who do you trust with your privacy? Yes, I'm talking about racy photos you send to your paramour(s). Be careful with these (see the links above). But I am also talking about your passwords to digital accounts.

The point here, is not just to protect your ASSets, but all your assets.  Where we have discussed in earlier posts the ways to attempt to safeguard your real, physical assets, we have seldom taken on discussing your digital ones.

Ever been locked out of your email? Its a pain. What if your parent/partner/sibling passed away, and had essential information on their email? How would you access it? What about accessing their social media profiles? Banking records and accounts? Ever thought about this?

Like so many things planning related, a checklist is usually the best way to go about things.

• Financial and business accounts passwords. Seems obvious, but do you have these written down somewhere? And have a backup to these? How will anyone know about your online stock account, if you don't tell someone, or have a list written down?

• Email Account passwords. You should change these regularly, but also have them written down, just in case. Gmail, for example, offers some recourse, but like anything you have to mail or fax a request in to, don't hold your breath.

• Social Media. Some people live on social media, others make their living from it. This can be a real estate asset. Facebook will memorialize an account for you, but I think that is a little creepy. Twitter has a similar policy for deleting an account.

• Itunes, music, pictures, etc. Bruce Willis did us a favor. Anyone every read those ten page contracts you AGREE to when you buy something on Itunes? Yeah, me either. I guess we should have just gone to the local music store and purchased a CD though, because when you die your song library is going to be worthless. WORTHLESS. How many millions/billions of dollars has itunes made, only for a life estate in the music? What a joke. I get it, from a business standpoint, similar to how, originally, you couldn't just transfer your itunes to someone else's computer or ipod. Now, they charge you $0.30 more. Genius? Maybe, but now when I die, my family has to pay for the same bad one-hit-wonder again at inflation adjusted, 2067 prices? Criminal. In all seriousness, this is the easy one. Back up your hard drive. Then back it up again. Keep the backups in different locations. (Houses burn down. Trust me).

Take Away: The easiest way to accomplish all this is have a pen and paper and a couple of extra hard drives. Every month, back up your stuff, update it, and keep one (or more) off site. Keep it in a safe deposit box. It is not that hard, and it is not that expensive. There are online companies you can pay to have real time, online access and storage, but you probably don't need that. I thought that would be a great business idea: maybe it is, but I was convinced my malpractice insurance wouldn't go for it.

Like any good boy scout/doomsday prepper/zombie apocalypse afficionado, the motto is the same. Just be prepared. Same goes in estate planning.

Also, Valentine's day is coming up. Remember, if you want to forever memorialize your most private and itimate moments via digital media, just make sure you trust who is on the other end. It could come back to haunt you, and you could end up in a class action lawsuit.