Moynihan Lyons PC

Single Women often Need to Play Catchup in Retirement

 
Retirement can be a challenging time for unmarried women.

The retirement savings for single women can be lower than married, or even widowed, women. That should be taken into consideration, when planning retirement, according to Barron’s in “The Single Woman’s Guide to Retirement Planning.” Married women may face a steep decline in income when their spouses dies. However, their single peers don’t have the opportunity to inherit a partner’s assets and spousal benefits from Social Security.  

Most retirement advice is geared toward couples. There needs to be a different plan for singles, because no one is going to save with them. They need to save and plan more.

Retirement security for Gen Xers was the topic of a study from the Employee Benefit Research Institute. This is the generation that was born between 1961-1981. The study found that only in one group of Gen Xers — single women — were 50% at risk of not having enough money to cover retirement basics. The average expected shortfall was as high as $73,000. That’s twice the estimated average shortfall for single men and more than triple that of widows. The gap continues into the highest income levels.

Americans are staying single longer and marriage rates are declining. Those trends, and the relatively new phenomenon of “gray divorce,” points to more women facing this scenario in the near and distant future. A little more than half of millennials, have never been married. When today’s older retirees were the age of today’s millennials, they were mostly married — only 17% were single.

Because the risk of running out of funds is higher for women, some advisors favor a more conservative approach, with lower expected returns on an investment portfolio. Add to that, the fact that women provide much of the caregiving to others and afterwards end up having to look after themselves. Perhaps that’s why so many occupants of nursing homes are women.

Advisors to women also recommend that they purchase insurance to help with the cost of long-term care. The first phase tends to come from family members. However, if you don’t have children or family living nearby, you have to be more careful about planning for long-term care costs.

About two thirds of people living alone at home over age 85 are women, according to a 2017 study from the Society of Actuaries. Living at home brings its own challenges and costs. Advisors tell single women that they should consider continuing-care retirement housing earlier than married couples.

Estate planning is especially important for single women. It’s crucial to be sure that documents, including a will, possibly a revocable trust, powers of attorney for both finance and health, and a HIPAA waiver, are in place, while they are well. For those who have trouble naming a proxy (substitute decision-maker)  due to a lack of family, an estate planning attorney can help to identify a private professional fiduciary or financial institution that can serve as a proxy and act as a co-trustee.

Finally, single women need to check on the beneficiary designations on their accounts. Some pensions do not allow for non-spousal beneficiaries, so it might be better to roll the pension into an IRA.

Reference: Barron’s (March 4, 2019) “The Single Woman’s Guide to Retirement Planning”

What If the Children are Not Independent – Yet?

At what point does asking for loans, become elder financial abuse?

It is often a challenge for a child to grow up and become an adult. Perhaps more importantly, for the child to become independent from the parents, according to Newsday in “Good to Know: Are your grown-up children taking advantage of you?”

Plenty of parents don’t know what to do when they are asked too many times for too many financial favors. They may feel pressured to agree, worried that they may see their grandchildren or their children less, if they say no. That’s a bad reason for generosity. If the parent is asked to co-sign for a large purchase, like a home or a car, they need to put the brakes on and discuss this thoroughly with their child. It may also be a good idea to speak with an estate planning attorney, for an objective viewpoint.

There needs to be recognition of the child’s creditworthiness. Have they borrowed money from their parents or other family members and failed to pay it back completely, or made only partial payments, and only after being reminded repeatedly? Don’t expect behavior to change. Parents facing this example also need to discuss this between themselves. They should only “lend” money that they can afford to lose.

If the child has been turned down for credit through regular financial channels and the bank of Mom and Dad is the only option, find out why. Ask them for a credit report and be transparent about your concerns. Can you afford to pick up the mortgage payments, if the child fails to make them? What about car loan payments?

Taking advantage of parents can extend past money. Some families welcome their grandchildren with open arms for unlimited times. However, if you find yourself babysitting on weekends and several week nights during the week, it’s time for a discussion. For one family, whose son was interested in spending time with a new fiancé more than with his two toddlers, the situation went on for nearly a year, until the parents gathered the courage to speak up.

They added up all the time they were spending each week taking care of the children. It has turned out that they were watching the children for fifteen hours or more each week. This was discussed calmly. They then made it clear that they were happy to continue caring for the children, but for a far more reasonable period of time.

If you feel that your children are taking advantage of you, you’ll need to have a discussion in a calm and reasonable manner. If there are financial matters that are spinning out of control, speak with your estate planning attorney about how to create a plan to stop the flow of money.

Reference: Newsday (April 14, 2019) “Good to Know: Are your grown-up children taking advantage of you?”

Beware of New Social Security Number Scam (and Don't Send Anyone Gift Card Pins)

As an Elder Law attorney, I am always on the lookout for scams that target seniors.  Here's one that hit home this week. - Maureen Lyons

I just got a phone call from one of my clients.  She was a bit shaken as she told me  about a call that she had just received. Caller ID indicated that the Social Security Administration was calling. It was a recording telling her that there was some suspicious activity associated with her Social Security number and that the number had been suspended.  She was told to respond immediately. The caller was asking her to confirm the number.  Thankfully,  she  hung up, and called me immediately.

I knew that it was a scam, but I didn't know how prevalent it is. I did some research via Google. According to the FTC, more than 35,000 people reported the scam to them in 2018.   Here's what the FTC has to say about the scam: This is what a Social Security scam sounds like.  There is even a recording of one such call.

Apparently, in addition to obtaining your Social Security number, scammers often advise you to drain your bank accounts before you account is frozen and use that money to purchase gift cards to hold your funds.  Next, they ask you to provide them with the pin numbers on the cards.  If you fall for this, say good-bye to your money.  It's gone.

The FTC said that most consumers don't fall for the scam.  But they do worry that someone has their social security number.  

Here's what you should know:

1. Never give out your Social Security number over the phone.
2. Don't trust Caller Id. Scammers can make your Caller Id show the name and number of the SSA.
3. Social Security is never going to call you and threaten to suspend your Social Security number.
4. They won't ask you to wire funds.
5. It is always a scam if you are being asked to buy gift cards.

 

Estate Plan Isn’t Finished until the Very End

Put away the estate plan when it is completed. However, take a good look at it frequently.

There are many reasons why an estate plan needs changing, because your life changes as do your goals, according to the Times Herald-Record in “5 steps to securing your elder estate plan.”

What might be some of those changes? It could include your divorce, your marriage or even the marriage or divorce of your children. It can also be that your financial situation has changed, and you need to make changes.

The process of review may seem challenging but here are some steps to consider:

Step One: gather up all your documents, which may take some time. This includes your will, powers of attorney, health care proxies, living wills, any trusts and any other documents.

For clarity, here are some definitions. A will is the document that states where you want your assets to go when you die. It is reviewed by the court in a proceeding called probate, but only after your death. Assets in a living trust (or other types of trusts, depending on your situation) do not go through this process. Creating a trust results in a legal entity that owns the assets it contains. The trust assets go to beneficiaries upon death, as directed by you to the trustee. In many instances, trusts save time, money and avoid litigation over inheritances.

Powers of attorney name the person you appoint to make any legal, business or financial decisions for you, should you become incapacitated. A health-care proxy names the person to make your medical decisions, if you are unable to do so. Living wills are used to express your wishes for end-of-life care.

Step Two: review your documents. Make sure that everything is signed. You would be surprised how many important documents aren’t signed. Read the documents to see who was named as the executor of your will and who is the trustee of your trusts. Are those people still able to undertake these responsibilities? Do you still want them making decisions for you?

Step Three: make a list of all of your assets. Note how they are titled—what names are on the accounts—and what are the values of each. Include retirement accounts like IRAs, 401(k)s, insurance policies and annuities and check to see if you named a beneficiary. Do you still want that person to be the recipient of the asset? Make sure that you have also named a contingency beneficiary.

Step Four: what information would your loved ones need should you become unable to communicate? They’ll need information about your medications, the name and contact information for your primary care physician, your estate planning attorney, your CPA and your financial advisor. You may want to arrange for a “family meeting” with your healthcare team and your legal and financial team (two separate meetings), so everyone in your family is familiar with your professional teams. A list of where your documents can be found and who you want to receive personal items, may also be helpful.

Step Five: don’t forget to tell your trusted family members where your important information is located and what lists exist. You don’t have to review everything with them, but they should know where things are.

Reference: Times Herald-Record (Dec. 1, 2018) “5 steps to securing your elder estate plan”

Attorney Guilty in $11.8 Million Fraud Case

Attorney successfully schemed to take millions from couple that was intended for charity.

A New York state attorney found a way to steal millions from a couple, who wanted their money to go to charity and their heirs. The attorney instead transferred ownership of their property to himself, according to The United States Attorney's Office Northern District of New York in "Albany Attorney Admits to Stealing from Elderly Clients in $11.8 Million Estate Fraud."

The good news is that this attorney was caught and prosecuted. He has admitted his guilt and faces a potentially long prison sentence for his crimes. This is good because elderly clients should be able to trust that their attorneys will not attempt to cheat them out of their money.

Estate attorneys who would do this type of thing are a small minority. Elderly people, however, should be aware that these things happen and they should make sure they hire attorneys who are trustworthy.

Reference: The United States Attorney's Office Northern District of New York (June 11, 2018) "Albany Attorney Admits to Stealing from Elderly Clients in $11.8 Million Estate Fraud."

Fate of Doctor-Assisted Suicide Law Unknown

A stay is issued against lower-court ruling in California’s doctor-assisted suicide law.

A group of doctors and religious-affiliated people fought hard against California’s recently-passed doctor-assisted suicide law. In May 2018, the opponents of the law won a major victory, when a district court judge declared that the law violated the state's constitution. The ruling, however, was a partial victory, because the judge did not rule on the merits of the law but declared that the manner of the law had been passed unconstitutionally.

That ruling is now in doubt, because an appeals court has issued an immediate stay of the lower court's order, according to KVOA in "Court reinstates doctor-assisted suicide in California."

The California law is being closely monitored by interest groups on both sides of the debate over doctor-assisted suicide. Interest groups are also following the law, because it included several provisions mandating that the state collect data about how the law was working and to issue regular reports about it.

Reference: KVOA (June 16, 2018) "Court reinstates doctor-assisted suicide in California."

Comic Book Writer May Be Victim of Abuse

Restraining order issued against man who takes care of Stan Lee.

Stan Lee, 95-year-old writer of comic books, is known as a friendly, beloved creator of superheroes that transfer easily to film and bring in millions of dollars. However, police are investigating whether he is the victim of elder abuse, according to Time in "L.A. Police Investigate Reports That Marvel Comics' Stan Lee Is a Victim of Elder Abuse."

After Lee's wife passed away, a man named Keya Morgan stepped in to assist Lee with his affairs. Morgan is on probation for an unrelated matter. It is claimed that Morgan moved Lee out of his home and will not let friends and family visit Lee.

Police and a social worker were sent to Morgan's home to conduct a welfare check on Lee. However, Morgan called 911 on them and reported that he was being burglarized. Morgan now faces criminal charges for filing a false police report. A restraining order against Morgan has also been issued by a court prohibiting him from contacting Lee.

While it is not yet known whether Lee is a victim of elder abuse, a common sign is when a caretaker isolates an elderly person from other friends and family.

Reference: Time (June 14, 2018) "L.A. Police Investigate Reports That Marvel Comics' Stan Lee Is a Victim of Elder Abuse."

AARP Concerned about Student Debt

Should the financial world be allowed to attach Social Security?

The concept of student loans in the U.S. is to take the loans out early in life, go to work after college and then pay off the debt load. However, it does not always work that way. It has become a big enough problem, that the American Association of Retired Persons is starting to worry about it, according to Politico in "Why the AARP is worried about student loans."

The AARP has two basic issues with the current student loan situation. The first is that an increasing number of elder Americans have defaulted on their loans. As a result, their Social Security benefits are being garnished. The organization is trying to get a law passed to end the garnishment of Social Security benefits.

More generally, the AARP is worried that the increasing amount of debt graduates are carrying is making it difficult for them to save for retirement. Americans generally do not save enough for their retirements. If the student loan situation gets worse in a few decades, elder Americans could be even more unprepared to retire.

Reference: Politico (June 7, 2018) "Why the AARP is worried about student loans."

Explore Social Security Sooner Rather than Later

Social Security is a simple concept when you are paying. However, it can get complex when it comes to benefits.

Social Security is actually a very complex system with all sorts of different rules that people can use to get the most out of it. However, they need to understand those rules, according to the Financial Advisor in "Nearly Half of Americans Still Don't Understand Social Security."

In a recent survey, 47% percent of respondents over the age of 50 were unable to correctly answer a series of true/false questions about Social Security benefits. This could be a potential problem, because it means that they might not get what they need out of the system, when they retire. The Social Security Administration is supposed to assist people with this. However, it can do little more than tell people what their options are, when asked.

An elder law attorney can advise you on getting the most out of the program, when it comes to your lifetime benefits.

Reference: Financial Advisor (May 18, 2018) "Nearly Half of Americans Still Don't Understand Social Security."

Elder Law Attorney Can Help You Prepare

It is important to create some legal arrangements BEFORE you need them.

Elder law attorneys help people make legal arrangements ahead of time, to avoid some problems as you become older, including who can make decisions for you, if you are unable. Therefore, anyone can benefit by visiting an elder law attorney, especially those who are nearing retirement, according to Tipp News Daily  in "Top 10 Questions to Ask Your Elder Law Attorney."

For example, if an elderly person develops dementia or a terminal illness that incapacitates them, then they will need someone else to handle their affairs for them. If they wait until such a person is needed, a court will likely have to appoint someone.

An elder law attorney can prepare the legal documents necessary to avoid having to go through court and help the elderly person to decide ahead of time who to appoint as an “incapacity” decision-maker. Elder law attorneys offer many other services, as well as including planning for long-term nursing home care, assistance with estate planning documents, retirement plan legal advice and help understanding Social Security.

Meet with an elder law attorney to prepare for problems that may arise later in life.

Reference: Tipp News Daily (May 26, 2018) "Top 10 Questions to Ask Your Elder Law Attorney."