Identity Thieves Continue to Aim at Seniors

We are all vulnerable to identity thieves but much of the action seems to focus against seniors, according to My Prime Time News in “Senior Identity Theft: How to Stay Safe.”  More than a third of complaints to the Federal Trade Commission in 2017 were from seniors.

Why are seniors more vulnerable to theft? There are a number of reasons. One is that you are a far more interesting target for thieves now, than you might have been earlier in your life. You’ve got a lifetime of savings set aside for retirement. While you’ve got that nice nest egg, it’s possible that you may not be up to date on all of the latest ways that thieves use technology to scam people.

Not all seniors know that caller ID can be fooled into showing that a call is coming from Social Security, when it’s really coming from overseas. Email design is so sophisticated that it is easy for an email to be created using logos and typefaces that make it appear like it does come from a big bank—but it’s from a spammer.

Prevention is the best medicine when it comes to identity theft. There are several steps you can take to protect yourself:

  • Be smart about your personal information. Never give your personal information out to anyone, don’t answer calls from phone numbers you don’t recognize and don’t reply to emails from unknown senders.
  • Prevent checks or personal information from falling into the wrong hands, by ensuring that Social Security benefits, pension funds and any other retirement income checks are direct deposited into your accounts. All it takes is one paper check from the mailbox for someone to do serious financial damage to your life.
  • If you are the caretaker of a family member, proactively protect their finances from fraud. If you have power of attorney, monitor their credit reports to ensure that no new accounts are opened in their name.
  • If a loved one has accidentally given out personal information, have an initial fraud alert placed on their accounts for one year. If they’ve already been a victim of identify theft, have an extended fraud alert place on their accounts.

Identity theft is rampant in this brave new world, and can happen even when we are watching for it.

Reference: My Prime Time News (June 2, 2019) “Senior Identity Theft: How to Stay Safe”

Planning for Digital Assets as Part of Estate Planning

As technology continues to advance and we are increasingly living more of our lives online, it’s time to think about what our digital legacy will be, says The Scotsman in the article The ghost in the machine—what will happen to online you after death?” In our increasingly digital world, we’ve shared the news almost immediately when a celebrity dies, grieved when our online friends die and been touched by stories of people online who we have never met in RL — Real Life.

Most of us have digital assets and online accounts. It’s time to think about what will happen to them when we die.

Estate planning attorneys are now talking with clients about their digital assets and leaving specific instructions about what to do with these online accounts and social media, after they pass.

There’s a trend of creating video messages to loved ones and posting them online for the family to see after they pass. Facebook has a feature that allows the page owner to set a legacy contact to manage the account, after the account owner has died. Other technologies are emerging to allow you to gather your digital assets and assign an individual or individuals to manage them after you die.

It is now just as important to think about what you want to happen to your digital assets, as it is to your tangible, earth-bound assets when you die. What’s also important: considering what you want to happen to your data, how accessible and enduring you want it to be and how it will be protected.

People in their older years have seen amazing leaps and changes in technologies. We’ve moved from transistor radios to VHS to DVD to Blu-Ray. We’ve gone from land line home phones to smart phones that have the same computing power or more than a desktop. The first social media site was launched in 1997, and websites like Myspace have come and gone.

Will the current websites and software still be available and commonly used in five, ten, fifty, or one hundred years? It’s impossible to know what the world will look like then. However, unless a plan is made for digital legacies, it’s unlikely that your digital legacy will be accessible to others in the near and far future.

Here’s the problem: even if your executor does succeed in memorializing your Facebook page, will there be things on the page that you don’t want anyone to see after you’ve gone? There’s a wealth of data on social media to sift through, including items you may not want to be part of your digital legacy.

Consider the comparison to people who lived during previous ages. We may not be able to see their lives online, but they have left behind physical artifacts—letters, diaries, photographs—that we can hold in our hands and that tell us their stories. These artifacts will survive through the generations.

A digital estate plan can ensure that your data is managed by someone you trust. Talk with your estate planning attorney to learn how to put such a plan in place, when you are creating your legacy. Your last will and testament is a starting point in today’s digital world.

Reference: The Scotsman (May 16, 2019) The ghost in the machine—what will happen to online you after death?”

Should I Leave an Inheritance to My Kids?

Some retirees make a big mistake and give their retirement savings away without considering their own income needs. Before you make gifts to others, take a look at how much to spend on yourself. Determine how much you need to save and how much you can withdraw each year, when you retire.

Investopedia’s article, “Challenges in Leaving Inheritance to Children,” says to consider the effect of inflation and taxes and maintain a diversified portfolio of growth and income investments to help your portfolio keep pace with inflation.

The biggest unknowns with retirement income and children’s inheritance are unexpected illness and high healthcare costs. Government programs are frequently not helpful in paying for nursing homes and other forms of long-term medical care. Medicare covers nursing home stays for a very limited period. Medicaid mandates that you spend nearly all of your own money, before it will pay for long-term care. You can’t just move assets to family members to qualify for Medicaid, because the program restricts benefits, if asset transfers were made within five years prior to applying for Medicaid. The rules are tricky, when it comes to eligibility.

You can protect your assets from the costs of catastrophic illness with a long-term care insurance policy. However, these policies can be very expensive and have coverage limitations. Consider them carefully.

What happens if you outlive your retirement funds? With longer life expectancies, it’s crucial to try to manage retirement-plan withdrawals, so you do not deplete all of your assets during your lifetime.

You could purchase an immediate annuity with some retirement money to ensure a guaranteed amount, for at least as long as you live. Some pension and retirement plans may allow you to stretch payments over single or joint life expectancies, rather than receive the proceeds as a lump sum.

If you expect to inherit assets from your parents, you may be in a better position financially than someone who doesn’t expect to receive an inheritance. Note that certain inherited assets, like stocks and mutual funds, are eligible for a favorable tax treatment called a step-up in basis. If you are leaving assets to others, this could mean significant savings for heirs.

You may also want to set up a trust to control distributions from the estate to the surviving spouse and children. If you or your spouse have children from previous relationships but don’t have a prenuptial agreement, trusts can ensure that specific assets are passed to designated children.

You may share your wealth with others by gifting assets, creating a trust, deferring income or purchasing life insurance or tax-deferred variable annuities.

Talk to an estate planning attorney to determine the best options for your circumstances.

Reference: Investopedia (November 26, 2018) “Challenges in Leaving Inheritance to Children”