John Lane Law

IRS to Use Private Debt Collectors to Collect Some Debts - John M. Lane Law, PLLC

“Consumer watchdogs are fearful that some of the nation’s most vulnerable taxpayers will be harassed and that criminals will take advantage of the system by phoning people and impersonating I.R.S. collectors.”

Starting in April, the IRS began using private debt collection agencies to collect past-due taxes. The new program could be confusing to seniors, who are vulnerable to scams.

Congress passed legislation in December 2015 that approved the IRS’s contracting with private debt collectors to collect certain debts. These private collection agencies can work on accounts where the taxpayer owes money and the IRS isn’t actively working on the account. That could be because the account is older or the IRS does not have resources to keep pursuing the debt.

The New York Times article, “I.R.S. Enlists Debt Collectors to Recover Overdue Taxes" notes that scammers have historically posed as the IRS to target vulnerable seniors in order to get personal information or money.

The IRS would never harass consumers over the phone. But this new program allows private debt collectors to contact taxpayers by phone. This may make it harder to know if a scammer is targeting the taxpayer.

Both in 1996 and 2006, the IRS tried to use collection agencies. However, both times, the programs failed, with the most recent attempt costing millions more than it took in. In addition, the program created thousands of complaints—one of which was the horror story about an older couple who received more than 150 phone calls in less than a month. Some changes were made.

The IRS will inform taxpayers by mail if it is turning their collection issue over to a private debt collector. The debt collector must also send a written notice, once it receives the taxpayer's information, and collection agencies are required to comply with all debt collection laws. These laws prevent debt collectors from harassing consumers. More information is found on the IRS website.

The IRS has contracted with these four debt collection companies:

• Conserve in Fairport, New York
• Pioneer in Horseheads, New York
• Performant in Livermore, California
• CBE Group in Cedar Falls, Iowa

In order to avoid scams, seniors should know that private collection agencies will only request payments to be made online at IRS.gov or by check. The checks should be made payable to the U.S. Treasury and sent directly to the IRS. They don’t go to the private collection agency. The collection agency won’t ask for payment on a prepaid debit card or gift card.

Contact John M. Lane Law, PLLC to discover the Simplified Solution to your estate planning needs. Everyone has an estate, no matter how large or small, complex or simple. For more information about how we can help you, visit our website at www.JohnLaneLaw.com.

Reference: The New York Times (April 20, 2017) “I.R.S. Enlists Debt Collectors to Recover Overdue Taxes”

Like Gene Wilder, Many Opt to Keep Alzheimer's Disease a Secret - John M. Lane Law, PLLC

“Because cognitive impairment is likely for most people as they age, advisers shouldn't wait for signs to start planning.”

Comedic actor Gene Wilder, who died last week at age 83 from complications of Alzheimer's disease, didn’t tell anyone about his illness for at least three years. That's common, reports Investment News in “Hiding Alzheimer's, like Gene Wilder did, is natural, so prepare for it with all clients.”

The star of Willy Wonka and the Chocolate Factory and many other successful comedies is said to have wanted his fans to keep laughing over his life's work instead of being sad about his failing health.

Most Alzheimer's patients will hide their symptoms as long as they can because they'll lose control of their lives if their family or friends are under the impression they can’t take care of things on their own.

The first thing to recognize is that cognitive impairment is a significant risk. Financial advisers and elder law attorneys should take steps to protect these clients' finances from the impact of debilitating conditions like Alzheimer's. This is best accomplished before they notice any changes in the individual’s behavior. With dementia and Alzheimer's so common in the elderly, criminals frequently target older individuals because they can more easily be swayed into releasing money or disclosing personal information.

The first thing elder law attorneys will do is have their clients execute a legal document that lists the family members or friends whom the attorney can contact to discuss private information if he or she believes the client is starting to have cognitive problems. Clients may need some time to consider this difficult issue. However, if they refuse to provide this information, financial planners will often require them to sign a different document that releases the adviser from liability if the client is harmed because of his or her cognitive decline.

Get the complete legal picture from an experienced elder law attorney.

Advisers may also have a checklist to complete each year about their clients to monitor changes and document them over time. When they see “red flags,” like a client with memory loss or difficulty understanding the consequences of decisions, advisers may ask that a trusted contact start attending planning meetings.

Hearing a professional tell you he or she thinks you might have dementia is never welcome news, but this may be the opportunity to get medical assistance and to plan ahead for potential issues in the future.   Contact John M. Lane Law, PLLC to discover the Simplified Solution to your estate planning needs. Everyone has an estate, no matter how large or small, complex or simple.  For more information about how we can help you, visit our website at www.JohnLaneLaw.com.

Reference: Investment News (September 1, 2016) “Hiding Alzheimer's, like Gene Wilder did, is natural, so prepare for it with all clients”

Elder Abuse Grows with Senior Population - John M. Lane Law, PLLC

“As the population of those older than 60 increases, so do instances of elder abuse.”

The Administration for Community Living says that hundreds of thousands of older persons are abused, neglected and exploited every year, reported The Hillsdale (MI) Daily News in “Understanding Elder Abuse.” They found that one out of every 10 people age 60 and older who live at home experiences elder abuse, including neglect and exploitation. Unfortunately, this statistic is probably underestimated as many victims are unable or afraid to report the abuse.

When it comes to scams, IRS phone scam are popular. A scammer calls a senior and threatens prison time because the senior owes the IRS money. In reality, the IRS doesn’t call people.

Unfortunately, many senior citizens are the target of scammers through phone calls, email and postal mail. Scammers can use charm, intimidation or scare tactics to convince their victims to hand over cash or credit card information.

Also, many seniors don’t look at their Medicare Summary Notices (MSNs), which are received quarterly. This provides details for all of the services received and what Medicare will pay. It’s not a bill. It’s a summary of services and Medicare payments. Keep a log of when you go to the doctor or have a test or treatment so you can compare what you actually received to what Medicare paid.

There also can be problems with seniors who become attached to a caregiver, whether paid or not. This can lead to poor choices, especially when a caregiver has financial or family issues and shares these problems with a sympathetic senior. Frequently the senior can’t afford to help financially but will still do so because of his or her attachment to the caregiver.

The stealing of prescription medications from seniors is also a big problem. Sadly, statistics show that family members or friends of family members are the most likely perpetrators.

Contact John M. Lane Law, PLLC to discover the Simplified Solution to your estate planning needs. Everyone has an estate, no matter how large or small, complex or simple.  For more information about how we can help you, visit our website at www.JohnLaneLaw.com.

Reference: Hillsdale (MI) Daily News (July 13, 2016) “Understanding Elder Abuse”

Guardianship Abuse Is Rampant

Guardians are supposed to look after and protect the interests of their wards. Unfortunately, it has become all too common for guardians to take advantage of their wealthy elder wards.

The purpose of court appointed guardians is a simple and noble one. When a person is not competent to handle his or her own affairs, then a court can appoint a guardian to act on the person's behalf. The guardian is supposed to act selflessly and in the best interests of the ward.

However, as the Wall Street Journal reports, in "Abuses Plague Guardianship Systems Across the Country," the financial abuse of elderly people by guardians is rampant throughout the United States.

Court appointed guardians with no family relationship to the elderly wards too often act in their own interests and deplete the wealth of the wards.

This problem is mostly avoidable through estate planning. Part of a good estate plan is planning for end of life issues and getting a general durable power of attorney and a health care power of attorney. With those two documents, you can appoint someone you know and trust to look after your financial and medical affairs in case you are ever not competent to do so. Doing that can often make the appointment of a guardian unnecessary.

Even if a guardian is necessary, a court will likely appoint the person you have already designated as trustworthy whenever possible.

Do not fall victim to an abusive guardian.

Schedule an appointment with an estate planning attorney and get the documentation that you need to make your own decisions about who should look after your affairs if you are not able to do so. Contact John M. Lane Law, PLLC to discover the Simplified Solution to your estate planning needs. For more information about how we can help you, visit our website at www.JohnLaneLaw.com.

Reference: Wall Street Journal (October 30, 2015) "Abuses Plague Guardianship Systems Across the Country"

The Latest on Mr. Cub’s Bench-Clearing Estate Brawl

The widow of Ernie Banks is scheduled to meet in person next month with the longtime caretaker named as the sole beneficiary in his will to see if they can come to a resolution on how to divide up the slugger's estate. The settlement conference set for September 25 will mark the first time Elizabeth Banks and the caretaker, Regina Rice, have come together since controversy erupted over Banks' will in the wake of his January death of a heart attack at 83. If no agreement is reached in the closed-door meeting with Cook County probate Judge James Riley, the case could be headed toward a protracted and expensive legal battle that would potentially drain Banks' estate of whatever assets are left.

The Chicago Tribune, in “Ernie Banks case: Two sides to try to settle dispute about Cub great's will,” reports on the latest in the battle over Ernie Banks’ estate.

Elizabeth Banks, who was estranged from Ernie when he died, alleged in a recent court filing that her husband had been diagnosed with dementia days before Rice had him sign a will in October 2014. The new will cut out his family and left the whole ballgame to Rice. Rice said that Ernie entrusted her to execute the will and that he wanted to make sure his fourth wife didn't get any of his estate. Court records show that Ernie sent her a "cease and desist" letter in 2013 requiring her to stop claiming any right to his personal or business dealings.

Despite both sides pitching heated accusations, Rice’s attorney told the judge that she wanted to go ahead with a settlement conference due to the limited assets in the estate. The attorney said that it was in everyone's best interest to resolve the estate in "a peaceful manner."

Rice filed an inventory of Ernie’s personal property earlier this year. This consisted primarily of things from his rented condo and storage containers in Chicago and California. The list included Banks' original Negro League contract from 1950, a Rolex watch, his Hall of Fame ring, and the Presidential Medal of Freedom. There are also other assets in a private trust set up in Rice's name under the terms of the will.

Banks' twin sons, Joey and Jerry, were not present for the legal proceedings. The two publicly accused Rice of taking advantage of their father's frail condition and vowed to fight her in court when the will became public.

The probate judge said the deadline for them to file the paperwork to be participants in the case was approaching. However, if the case settles before that time, Ernie’s sons wouldn’t be able to contest any award they were given. The judge also approved a spousal award of $20,000 for Elizabeth Banks, which is the minimum amount allowed under the state's probate law. Rice's attorneys objected because she hadn’t shown that she relied on Ernie for financial support at the time of his death, but the judge said the law was clear.

Estate contests are messy. You can help avoid them by getting quality estate planning advice and a sound strategy from an estate planning attorney.  Contact John M. Lane Law, PLLC to discover the Simplified Solution to your estate planning needs. Everyone has an estate, no matter how large or small, complex or simple.  For more information about how we can help you, visit our website at www.JohnLaneLaw.com.

Reference: Chicago Tribune (August 6, 2015) “Ernie Banks case: Two sides to try to settle dispute about Cub great's will”

New Protections for Elderly Investors - Texas Estate Planning

Two years after New York socialite Brooke Astor died in 2007, her son, Anthony Marshall was convicted of bilking her of millions of dollars. The heiress suffered from dementia, and did not know that her son, charged with her care, was paying himself from her assets. The Astor story is surprisingly common: a growing number of Americans suffer from Alzheimer's or another form of dementia and a sizeable percentage of those patients will fall victim to scams.

A recent Reuters article, titled “Protecting dementia sufferers from scammers gains ground in U.S,” says that states are now trying to provide greater protection for elderly investors. Three states have enacted laws that permit retail brokers to help deter scams against people with dementia.

The laws, which are being examined by other state legislatures, allow brokerages to halt an older client’s request to transfer money to others (at least temporarily) if a wealth manager suspects that his or her customer may have dementia and may be unknowingly be the victim of a scheme.

More than 5 million Americans over the age of 65 have Alzheimer's disease, which is the most common form of dementia, the article says. Citing the Alzheimer's Association, that figure accounts for roughly 1.5% of the U.S. population. Experts say this could grow to 7.1 million by 2025. 

The elderly are often easy targets for con artists and unscrupulous family members. In fact, U.S. seniors lose approximately $2.6 billion annually to financial exploitation. And more than half of this financial exploitation is committed by friends, family members, or caregivers.

 Elder financial abuse is frequently hard to detect, but the article explains that requests for large, "questionable" sums of money can often be a clear sign.

Philip Marshall (Anthony's son and Astor's grandson) commented that these new laws might have helped protect his grandmother. The younger Marshall is a professor of historic preservation in Rhode Island who recently went on sabbatical to devote more time to elder protection issues.

Brooke Astor was an heir to the Astor family fortune that started back in the 18th century. She passed away in 2007 at age 105, and had a $200 million estate. Most of this was earmarked for charities. Unfortunately, her son exploited part of her estate that was to be used for her personal expenses. He paid himself roughly $1 million for managing her affairs in 2006, as was revealed in a court proceeding.

Some have concerns about these laws and think that perhaps the government could empower wealth managers to interfere with legitimate transactions and keep elderly people from their investments, the article reports. FINRA, an industry watchdog, is also developing guidance on the issue, with input from the SEC, as brokerages have asked for clarity on this because of rules that require them to execute a customer’s transaction.

Roughly half of the states have laws that require employees of financial institutions to contact state agencies if they suspect an elder customer is being financially exploited. However, many of these laws do not include retail brokerage employees or allow those institutions to delay withdrawals.

Brokerages are often put in a tough position when this situation arises. Contacting concerned family members to question an elderly client's instructions could run afoul of laws about protecting privacy, as well as rules that require processing transactions on time. That said, following the client's instructions can help the customer who otherwise may fall victim to a con or abusive caretaker. As it stands in most states, brokers could be liable for taking action or honoring such a transaction.

Contact an experienced estate planning attorney for guidance on how trusts may be used to help curb this abuse.  John M. Lane Law, PLLC can help you discover the Simplified Solution to your estate planning needs. Everyone has an estate, no matter how large or small, complex or simple.  For more information about how we can help you, visit our website at www.JohnLaneLaw.com.

 Reference:  Reuters (July 1, 2015) “Protecting dementia sufferers from scammers gains ground in U.S.”

Tips to Avoid Elder Financial Fraud and Abuse

The costs of elder financial fraud and abuse are more than financial. In fact, for elderly citizens who are financially exploited, the impact is more emotional than financial, a survey from the AICPA shows. This is because elder fraud frequently involves family members. What's more, fraud cases involving elderly clients are on the rise, with nearly half of the CPA financial planners who participated in the survey, around 47%, saying they have seen an increase in financial fraud in the last five years.

 According to a recent On Wall Street article, titled “Elder Fraud: 9 Tips to Protect Clients,”there are two reasons for this increase.One is the fact that fraud is more likely to be reported these days with greater awareness in our country. Also, retiring baby boomers haven’t all been the most tech-savvy—scammers see them as easy targets with sophisticated frauds to steal their money.

 The AICPA survey showed that the elderly are being scammed via phone and online scams, capitalizing on their inability to say no and falling victim to confusing or too-good-too-be-true representations. Here are some tips from the survey that elderly individuals can use to protect themselves:

 Create your financial plan and review it twice a year. Your estate planning attorney can help you make sure that the assets on hand are the same as what is detailed in the plan.

• Have a system of Checks and Balances. Contact information regarding your support team should be given to your estate planning attorney. These include bankers, accountants, clergy, and any designees with authority over health-care concerns, as well as family members and loved ones. Fraud is stifled with open communication among the members of the team, so that others are aware of actions and decisions.
• Communicate regularly. The article reminds people that it’s important to communicate any changes in their situation to their estate planning attorney.
• Allow your estate planning attorney to speak with family members. It is helpful to have your estate planning attorney be able to talk to family members or a professional on your team. Again, communication is important and can help recognize and stop fraud from occurring.
• Designate a co-trustee. This will help prevent an unscrupulous family member from taking advantage of an elderly individual by imposing their will and signing away their assets. The article suggests that if this is an issue, talk to an estate planning attorney about a revocable living trust and assigning a co-trustee for the account.
• Require double signatures for larger dollar amounts. This is a great way to make sure that a large chunk of money doesn’t walk out the door without your say-so. Thus, the reason for a co-trustee: to ensure that all checks are reviewed and approved by the co-trustee if more than a pre-determined amount. This can help reduce the risk of fraud, the article advises.

 These are but a few examples. Your estate planning attorney can help you with other strategies and techniques to help prevent financial fraud and exploitation.

Contact John M. Lane Law, PLLC to discover the Simplified Solution to your estate planning needs. Everyone has an estate, no matter how large or small, complex or simple.  For more information about how we can help you, visit our website at www.JohnLaneLaw.com.

 Reference: On Wall Street (July 1, 2015) “Elder Fraud: 9 Tips to Protect Clients”

Watch Out! Grandparents Targeted in Scams

The voice on the other end of the phone line sounds sweet and concerned. There has been some trouble, so he or she wanted to reach out to your beloved grandparents. Junior, who has been traveling, needs some cash fast. Maybe there was a police incident or fender bender. What a good pal! And a friend indeed, because the caller knows things like what sports teams your grandkid roots for, where he goes to school and what bands he listens to. Grandma and Grandpa are happy to send some money via a wire transfer, a bank routing number or a prepaid money card. And of course, they'll keep it a secret from Mom and Dad, who would just overreact. Once the cash is handed over, the truth comes out: The whole thing was a con.

A recent article from the Detroit Free Press tells us that in many instances, the victims don't see their money again, particular when it’s a wire transfer. The article, titled “Loving grandparents target of latest 'send money' scheme,”says that some Michigan grandparents were out $33,000 after being told their grandson was caught fishing without a license in Canada and had drugs and alcohol on his boat. This happens quite often, and many grandparents might be too embarrassed or scared to report it to relatives or police.

The National Council on Aging says that this Grandparent Scam is one of the top 10 cons targeting seniors. The FBI cautions grandparents to resist the urge to act quickly. Make sure you confirm the caller's story, as well as the grandchild's travel schedule.

The article explains that real selling point in this scam is the personal information fraudsters retrieve from Internet and social media that convince seniors that the caller knows their grandchild. Combine this with the fact that grandparents love their grandchildren and are eager to help them out.

The scam is kicking into high gear now that we’re in the summer travel season. The article warns that the scam can also come in various forms: like the caller posing as the grandchild, as a police officer, or as a lawyer. The call often comes late at night, waking grandparents and catching them off-guard. In other instances, scammers reach out via e-mail.

Grandchildren can do their part by educating grandparents about social media and all of seemingly "private" info anyone can find out about you; telling your grandparents about your travel schedule; and making an emergency contact plan (like who you would call first if something happened while you were away or choose a code word to use to prove that the caller is really your friend). And grandparents should remember the following:

Be suspicious if the caller doesn't use your grandchild's name, instead saying, for example, "I'm Nancy, your granddaughter’s friend." They likely are waiting for you to fill the blanks with a reply, like "You mean Lisa?”

Test the caller by asking a question only your grandchild would know.

Pay attention to the caller's voice and words, if he or she claims to be your grandchild. Does it really sound like your grandchild?

• Don't react immediately;
• Beware of phone calls in the middle of the night or ones in which you're asked not to tell the grandchild's parents about this;
• Double-check all information the caller gives you. Contact the parents or other relatives, even if the caller asks you to keep it a secret;
• Don't use a wire transfer, because if it's a scam, you won't be able to get it back; and
• If you’re scammed, report it to your law enforcement.

Contact John M. Lane Law, PLLC to discover the Simplified Solution to your estate planning needs. Everyone has an estate, no matter how large or small, complex or simple.  For more information about how we can help you, visit our website at www.JohnLaneLaw.com.

Reference: Detroit Free Press (June 8, 2015) “Loving grandparents target of latest 'send money' scheme”

The Estate of Mr. Cub Already in Foul Territory

Widely beloved in Chicago and the baseball world, Ernie Banks — a/k/a Mr. Cub — rose from humble beginnings.  He began his career earning seven dollars a day in the Negro Leagues, before crossing the color barrier and becoming the Chicago Cubs’ most popular player ever.  After his playing career, Banks has been widely respected as a positive role model in baseball and beyond.  He continued to break new ground, becoming the first black Ford Motor F -0.18% Company dealer ever and being actively involved in charity work throughout his life after baseball.  In 2013, President Obama awarded Banks the National Congressional Medal of Honor. Ernie Banks died on January 23rd at age 83 from a heart condition.  Interestingly, his death certificate listed dementia as a “significant condition contributing” to his death.  Why is that important?

Just a few months before he died, Ernie Banks signed a new set of estate planning documents, including a power of attorney, healthcare directive, new will, and a trust. These documents left his caregiver and talent agent, Regina Rice, in control of everything. This new will and trust totally left out his family members and named Rice as his sole beneficiary. Rice would stand to inherit not only whatever assets and wealth Ernie Banks accumulated during his life, but the right to control (and profit from) his name, likeness, and image. 

Banks’ children say they will take her to court to keep that from happening.

Forbes reports in a recent article, titled “Estate of Ernie Banks In Turmoil As Caregiver Claims To Be Sole Heir,” that the Banks children are claiming Rice coerced their father to sign the new estate planning documents, by controlling and manipulating him, using her position of trust and confidence to take advantage of his dementia to their detriment.

The parties already have been slugging it out over Mr. Cub’s wishes. Banks said in multiple past interviews that he wanted to be cremated when he died and have his ashes spread over Wrigley Field. His ex-wife, along with his children, sued to stop the cremation and won the right to have Banks buried. Interestingly, even though the couple was estranged and in the middle of divorce proceedings, Banks’ wife still was considered his next of kin, which gave her the right to control his burial arrangements.

As far as the fight over controlling his image and inheriting his assets, the Forbes article points out that it will certainly be much more complex and drawn out than the duel over how to bury the baseball great. Individuals can leave their assets to whomever they want, but they must be of sound mind and free from what the law calls “undue influence.” Families often fight over whether a will truly represented the decedent’s wishes, or whether it was signed under coercion, manipulation, fraud, or other improper influence.

Since Rice was in a position of trust over Banks, the law says that it is assumed on a preliminary basis that she did exercise undue influence. She’ll need to show that she did not commit undue influence, instead of the children being required to prove she did.

Although it remains to be seen how this will end, it’s already certain that this is a tragedy for the legacy of a baseball icon. Unfortunately, this isn’t uncommon. This type of fighting and court action occurs frequently up and down the economic ladder.

You can prevent an estate battle in your family with the help of an experienced estate planning attorney long before a loved one has dementia or is possibly mentally incompetent.

Reference: Forbes (February 19, 2015) “Estate of Ernie Banks In Turmoil As Caregiver Claims To Be Sole Heir”

Special Elder Abuse Prosecutor Proposed in Oregon

Older Oregonians who are vulnerable to financial and physical abuse would have a new ally if the Legislature agrees to finance a new state prosecutor who would focus on assisting county district attorneys with prosecuting elder abuse cases. The elder abuse resource prosecutor would be in the Oregon Department of Justice's Criminal Justice Division. The person named to the proposed position would be the third full-time resource prosecutor in the state, alongside those for domestic violence and driving under the influence of intoxicants.

A recent article in The Oregonian, titled “State prosecutor for elder abuse is proposed for Oregon,” says that in recent years the number of suspected and confirmed cases of elder abuse has been steadily increasing in that state. In fact, in 2013, the Oregon Adult Protective Services received 28,449 reports of potential abuse involving older adults and people with physical disabilities.

Funding for the new full-time position is being requested as part of the Oregon Department of Justice's appropriations bill, which is moving through committees.

The director of consumer education and outreach for the Department of Justice said in the article that "[t]here's a gap there and we want to fill that with the prosecutor and the two investigators."

Likewise, a former county elder abuse prosecutor in Georgia told The Oregonian that it makes sense to create a position at the state level if a state has a significant rural population. "Then you've got the resources that could reach out to a small rural area that would never ever be able to afford a specialty prosecutor," the former prosecutor said.

The article explains that victims of elder abuse are two times as likely to die within a year of the abuse being reported than those elders who haven’t been the victim of abuse, citing research published in the Journal of the American Medical Association.

In the more than 28,000 complaints of potential abuse in Oregon in 2013, the state deemed 14,250 worthy of investigation. It confirmed 5,024 victims of abuse, wrongdoing, or self-neglect. The number of abuse complaints has been increasing as Oregon's senior population grows, according to the report. Growing awareness of the issue of elder abuse also is a factor.

The senior population is growing in many other states as well. Talk with a qualified elder law attorney if you have questions or want to take action to protect a loved one.

Contact John M. Lane Law, PLLC to discover the Simplified Solution to your estate planning needs. Everyone has an estate, no matter how large or small, complex or simple.  For more information about how we can help you, visit our website at www.JohnLaneLaw.com.

Reference: The Oregonian (April 3, 2015) “State prosecutor for elder abuse is proposed for Oregon”