Salt Lake City Estate Planning

Las Vegas Cop Arrested on Elder Abuse Charges

A police officer, who has been with the Las Vegas Metropolitan Police Department since March 1994, has been charged with 14 felony counts of theft, grand larceny auto, perjury, and exploitation of an older person.

The officer is identified as James Melton, according to a report in the Las Vegas Review-Journal, “Las Vegas police officer, 3 others indicted in elder abuse case.”

“We are disappointed the state made the decision to charge Mr. Melton,” Melton’s lawyer Josh Tomsheck said. “I say that based on the overwhelming amount of evidence which exists showing Mr. Melton violated no law and committed no crime. Mr. Melton, however, trusts the court system and knows we will be able to utilize the court process to bring to light the full version of facts which will exonerate him and restore the good name he’s spent a lifetime earning.”

Melton was most recently a member of the LVMPD’s homeland security division. Public records show he received more than $300,000 in pay and benefits in 2016. Melton has been on paid suspension since July 2017, when authorities launched the investigation. He’s now expected to be relieved of duty without pay, according to a statement from the LVMPD.

April Parks, a guardian appointed to care for the elderly, is already jailed in a separate case. Parks now faces a new exploitation charge, as well as five counts of offering a false instrument for filing or record and one count of perjury. Prosecutors said two others, Noel Palmer Simpson and Mark Simmons—office manager of Parks’ company, A Private Professional Guardian LLC—also were indicted.

Prosecutors claim that Melton worked with Parks, Simmons, and attorney Simpson to exploit an elderly couple. Between December 2010 and May 2017, Melton is said to have hired Parks, Simmons, and Simpson to act as the guardian for Beverly Flaherty and obtain control of more than $700,000 in Beverly and Jerome Flaherty’s assets.

Melton, Parks, and Simmons are accused of using Simpson’s services to file false and misleading legal documents with the court to obtain guardianship and name Melton as the successor trustee of Beverly Flaherty’s family trust.

“Protecting Nevada’s families and vulnerable populations is the overarching mission of this office, and one that I take very seriously,” Attorney General Adam Laxalt said in a statement. “Just a few short months after obtaining the most significant elder exploitation indictment in Nevada’s history, my office has once again teamed up with our local law enforcement partners to ensure justice is served against those seeking to exploit our elderly. These targeted crimes strike at the very heart of our tight-knit communities and will be pursued aggressively by my office.”

A Clark County grand jury indicted Parks last year on more than 200 felony counts that include racketeering, theft, exploitation and perjury.

Law enforcement at the time said Parks was the central target of their investigation and said she exploited at least 150 of vulnerable Nevadans and “systemically bilked them out of their life savings.” Parks is still awaiting trial on those charges.

Parks and Simmons are in custody on hundreds of previous charges.

Reference: Las Vegas Review-Journal (February 14, 2018) “Las Vegas police officer, 3 others indicted in elder abuse case”

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Elderly Houston Woman Falls Victim to Financial Abuse

Seventy-two-year-old Patricia Thomas recently sued the National Collector's Mint in federal court in Houston, claiming that one of its sales representatives, under the guise of "checking in" with her, persuaded her into purchasing $1.3 million in gold and silver coins—at a cost more than double what they were worth. Thomas alleged violations of federal telecommunications law that prohibits telemarketers from misrepresenting the risk and profitability of investments and Texas deceptive trade practices law for allegedly claiming the coins would increase in value.

The Houston Chronicle’s article, “Elderly woman says coin seller duped her into $1.3 million in purchases” reports that the lawyer representing National Collector's Mint claims no one was deceived and that Thomas could return the coins for a refund.

Some unscrupulous sales representatives will target older investors, preying on their anxiety of whether they've saved enough to retire and promising them above average earnings by investing with them.

Most of the investment fraud cases brought by the Texas State Securities Board against investment firms and advisors last year involved elderly investors. In these cases, sellers often describe the complicated investment vehicles as great opportunities to make extraordinary returns and claim that they're "risk free," "safe and secure" and "guaranteed.”

National Collector's Mint makes and sells coins and collectibles, advertising on television, magazines, its website, and through telemarketing, according to the Federal Trade Commission. The mint settled the action, without admitting any wrongdoing.

Thomas suffers from rheumatoid arthritis and requires full time care. She sees her children infrequently and anticipated the calls from Randy T. Perry, the mint's sales representative, according to court documents. She came to believe that Perry, who was also named in the suit, was a close friend whom she could trust, the lawsuit alleged. As a result, she made significant purchases, including many coins that cost more than $30,000 each.

Thomas is an unsophisticated investor and had no clue that rare coins are bought and sold in coin marketplaces and that information on value is readily available, according to court filings.

"They lured her in with some low-priced coins," the lawsuit said, "gained her trust, then pushed very expensive coins on her, knowing full well she had no idea about the true value of the coins."

If you would like more information, give our office a call for a FREE consultation today 801.438.7120!

Reference: Houston Chronicle (February 15, 2018) “Elderly woman says coin seller duped her into $1.3 million in purchases”

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Children of Entertainment Legends Fight for Right to Visit Aging Parents

 

Kerri Kasem, Kelly Rooney, and Travis Campbell were recently joined by other supporters, in testifying before the Michigan Senate Judiciary Committee to get state legislators to pass a law to protect aging parents by ensuring visitation rights for their loved ones.

The Detroit News reported in its article, “Hollywood legends’ children push elder visitation bill,” that Kerri Kasem was involved in several heated court battles with her stepmother, Jean Thompson Kasem, for the right to see her father, Casey Kasem—the “American Top 40” host who died in 2014 of complications of Lewy body dementia at age 82.

Since the death of her father, a Detroit native who began his radio career at Wayne State University, daughter Kerri has been working to guarantee that family members can visit ill or incompetent relatives with the help of laws, like the one being considered in Lansing.

“What it would allow the judge to do is to just rule on visitation. It would put the burden of proof on the caretaker,” said Kerri Kasem. “If they’re not allowing visitation, they have to prove why instead of hearsay.”

Travis Campbell, the son of Glen Campbell, said he was restricted in his visits with his father, when the musician began to decline. Campbell died of Alzheimer’s disease in August of last year at age 81.

Travis said he helped get lawmakers in Tennessee pass an elder visitation bill two years ago. He commented that toward the end of his father’s life, he was only permitted to see him for a few hours twice a month. Campbell said he was concerned about his father’s health because his dad was made to perform 151 shows over three years—even though he felt he couldn’t perform that many shows.

Kelly Rooney said her isolation from her father was slow and gradual and that he had complained of emotional and other forms of abuse before his death in 2014 at the age of 93. She claims that her father’s caretakers withheld medication and food from him.

Mickey Rooney testified about elder abuse before Congress in 2013. Kelly said her father was forced to continue to work and he was “demeaned” when he flubbed his lines or couldn’t read cue cards.

Kelly said her father’s caretakers would lie and say he wasn’t home when she came to come see him. She said that they held him hostage and stole time from the family.

Kerri Kasem said 11 states have passed similar visitation legislation.

Reference: Detroit News (February 13, 2018) “Hollywood legends’ children push elder visitation bill”

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Retired and Planning to See the World? Be Sure You Plan Ahead!

Many people see retirement as the ideal time to travel, with all their work-related time constraints gone.  However, because most seniors are on a fixed income, paying for those trips is often easier said than done. Add to that the fact retirees don't usually do a good job of budgeting for travel, and it's no shock that many find themselves financially stressed.

CNN Money recently published an article, “How to budget for travel in retirement” in which it notes that some retirees realize that travel expenses are 40% higher than expected, but 58% of seniors don't budget for travel in retirement at all. Here are some tips on budgeting for travel ahead of time.

1. Calculate what you can spend on travel annually. You need to plan your trips with a strong sense of how much money you have available to spend. As a general rule, you can withdraw about 4% of your nest egg's value each year without having to worry about running out of money in retirement. However, you'll need to deduct for taxes (unless your savings are in a Roth account) before you do anything else. Remember that 401(k) and IRA withdrawals are considered income, so the IRS will tax that cash. You also must estimate your basic living expenses, like housing, food, clothing and healthcare. Once you've accounted for these essential costs, you can then see what you can spend each year for travel.
2. Prioritize your trips and appreciate their costs. Once you get a feel for how much you can afford to spend on travel, you next need to maximize that money. Identify the trips most important to you and get a good sense of how much they'll cost. Don’t just guess!
3. Add a cushion. Once you see how much your dream trips will cost, you’d be smart to look for any senior discounts. That may be savings on car rentals, meals or even hotels. It's also important to build a buffer into each trip's budget to account for the unknown.

There will also always be incidentals, like taxis and tips. They will end up costing more than expected.

Finally, purchase travel insurance to give yourself some degree of protection, if your plans are disrupted or you encounter a health issue that makes you cancel or change your itinerary.

Reference: CNN Money (February 5, 2018) “How to budget for travel in retirement”

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Financial Industry Watchdog Enacts New Rules to Help Seniors

FINRA, the Financial Industry Regulatory Authority, has instituted two new rules to help thwart elder financial abuse:

1. Financial advisors must now make every reasonable effort to get the name and contact information of a trusted person for a senior customer; and
2. Financial advisors must now place a temporary hold and not disperse funds, if the adviser thinks that the senior investor may be the victim of financial exploitation. If this happens, the adviser must contact the trusted contact, while the funds are on hold.

Wealth Advisor says in its recent article, “These new rules will help protect seniors against fraud,” that the regulations are now in effect.

FINRA’s Securities Helpline for Seniors was the impetus for the enactment of these rules. More than 12,000 calls were made to the helpline on fraud and exploitation in the past three years, the self-regulator said. They recovered $5.3 million in voluntary reimbursements to customers.

Research shows that financial abuse is the second most frequently-reported type of abuse against the elderly. The most common is psychological abuse, according to a recent study of people 60 and older published in the journal Lancet Global Health.

The new rules should have a great impact on the safety of the elderly and their assets, because it may reduce the risk of the elderly losing funds they won’t be able to get back.

Advocates for the elderly say still more needs to be done, such as mandating that the financial industry develop personnel training, so staff know what to look for and can be proactive before a possible breach.

The FINRA rule stipulates that the absence of a trusted contact person’s name or information doesn’t keep an adviser from opening or maintaining an account, provided he or she has tried to obtain the information of a trusted contact. The advisers will also have to update the contact information regularly, along with the customer’s records.

There are other ways advisers can help fight elder financial abuse. One is to know the signs: the elderly may seem more submissive or fearful toward new people, or aggressive family and friends. Another is a senior who may make abrupt changes to financial documents, like their will or deed, or they have unusual changes to their financial management habits—like trying to wire large sums of money or establish new joint accounts.

Reference: Wealth Advisor (February 12, 2018) “These new rules will help protect seniors against fraud”

If you would like help protecting your Elders, give our office a call for a FREE consultation 801.438.7120!

Can You Afford to Make These Retirement Mistakes?

On a scale of one to ten, how prepared are you for retirement? A five? An eight?

Do you know the amount of money you really need to retire?

Do you understand all the rules concerning your pension (if you have one)? What about your 401(k), IRA, and other retirement accounts in your nest egg? You also need to have a grip on when to claim Social Security benefits. These are some of the issue you need to address in the days and months ahead of your retirement.  However, don’t wait too long to do your research and ensure that you’re making the right moves.

Kiplinger’s recent article, “Retirement Planning Mistakes You'll Regret Forever,” compiled a list of the greatest retirement planning mistakes and how to avoid making them.

Spur-of-the Moment Relocation. If you’re thinking of moving to Arizona or another warm weather spot to get out of the cold, test the waters before you make a permanent move. Consider renting before you buy a home.

Not Saving for Retirement. The single greatest financial regret of Americans surveyed by Bankrate was waiting too long to start saving for retirement. Those who responded who were age 50 and older expressed this regret at a much higher rate than younger respondents. Many people don’t begin aggressively saving for retirement, until they reach their 40s or 50s. While these investors may still have enough time to change their savings behavior and achieve their goals, they’ll need to take action quickly and be extremely disciplined about their savings. Morningstar calculated the amount required to save each month to reach a goal of $1 million saved by age 65. Assuming a 7% annual rate of return, you’d need to save $381 a month if you start at age 25; $820 monthly, starting at 35; $1,920, starting at 45; and $5,778, starting at 55.

Taking Social Security Too Soon. You can start taking retirement benefits at 62. However, you should  consider delaying this if you can afford it. Most experts recommend that you wait at least until your full retirement age–67 for anyone born after 1959–before tapping Social Security. If you can wait until 70, it is even better.

For example, if your full retirement age (when you’d get 100% of your benefit amount) is 67, but you claim Social Security at 62, your monthly check will be reduced by 30% for the rest of your life. If you can wait, it’s an 8% boost in benefits each year between ages 67 and 70 because of delayed retirement credits. Talk with an elder law attorney, because the strategies can differ for couples, widows, and divorced spouses.

Avoiding Estate Planning. It is not just for the super-rich. Estate planning is for you. This is true, even if you just own a car, home and bank account. Your estate plan will instruct who you want to want to get what and who will be in charge of dispersing your money and possessions (the executor). If you pass away without a will, your estate is subject to your state’s probate laws. You should also have a durable power of attorney that names someone to manage your financial affairs, if you become incapacitated. There are also advance directives such as a living will, which spells out the treatments you do and don’t want, if you become seriously ill, and a power of attorney for health care, which names someone to make medical decisions for you, if you can’t make them yourself.

Reference: Kiplinger (February 12, 2018) “Retirement Planning Mistakes You'll Regret Forever”

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What You Need to Know About Funeral Decisions

Did you know the state will name your funeral director, if you don’t do it for yourself? In most states, your spouse also has the right to make all funeral decisions.

Investopedia’s recent article, “Estate Planning: Why You Need a Funeral Directive,” says that if a spouse doesn't intend to carry out your wishes or if he or she has other plans for your funeral, your wishes will most likely be ignored.

Of course, your family can ask the court to have your wishes respected.  However, it’s an expensive and stressful experience. In fact, your body might be cremated or buried before your family can get to the courthouse!

To avoid this situation, use a funeral directive and select the person you want to make these decisions for you. This document lets you grant someone the legal authority to carry out your funeral plan. This can be a stand-alone document, but most people include it in their will. A funeral directive allows your agent to arrange memorials, restrict the guest list and decide how you’re laid to rest. It doesn’t have to be your spouse.  It can be any person with the strength and diplomacy to order your cremation, despite any family objections.

Work with an experienced estate planning attorney to memorialize your wishes and grant your nominee adequate legal authority. This may avoid unnecessary conflict and expensive litigation.

After you sign your funeral directive, make certain to provide sufficient funds to carry out your plans. Don't put your heirs in the position of deciding between paying for your funeral or inheriting the money. If you have something specific planned, your agent must have access to enough funds to pay the funeral bill.

In addition to executing a funeral directive, work with your estate planning attorney to arrange your estate plan, so funds are available.

Reference: Investopedia (February 8, 2018) “Estate Planning: Why You Need a Funeral Directive.”

If you want more information or would like to draft your Estate Plan, give our office a call for a FREE consultation, 801.438.7120!

 

How Does My Estate Plan Work After a Divorce?

A divorced man with two adult children is still working.  He plans to work at least another 10 years. He did his will a few years before he divorced and hasn’t made any changes. As it stands now, the will leaves everything to the spouse and, if she predeceases him, then to his two children.

Should he change his will now that he’s divorced or is his wife automatically excluded because of the divorce?

Hometown Life’s recent article, “After divorce, examine all aspects of estate planning,” says that this gentleman definitely should redo his estate plan.

If he leaves his estate plan as it is, it could mean a fight over interpretation.

In most states, the probate court typically may find that because he failed to make a change after his divorce, it was the man’s intent to continue to have his ex as his beneficiary.

He should speak with his estate planning attorney—and soon—to make things crystal clear and to remove the risk of fights and costly legal battles.

At the same time when he’s redoing his will, he should also review his medical and durable powers of attorney.  People often forget to change their beneficiaries on insurance policies, IRAs, or investment accounts. These also need to be updated.

For individuals, whenever you have a change in your family situation, like a birth, adoption, death, or divorce, you should review your estate plan.

Whether you need changes to your estate plan depends upon your individual situation. If a person is divorced, it’s a dead giveaway that his estate plan needs to be redone.

Reference: Hometown Life (February 7, 2018) “After divorce, examine all aspects of estate planning.”

If you need help setting up your Estate Plan, give our office a call for a FREE consultation, 801.438.7120!

 

Help Me with the Rules for an Inherited Roth IRA

The rules for an inherited Roth IRA are based on who the beneficiary is. That's because there are different rules for distributions, when the beneficiary is a spouse or a child or a charity.

You need to understand the rules to avoid the getting hit with a severe penalty for failing to make a required distribution, advises nj.com in its recent article, “The rules for Inherited Roth IRAs.”

One of the attractive features of a Roth IRA is that while the original owner is alive, there are no Required Minimum Distributions (RMDs). As a result, the Roth IRA can continue to grow tax-free for a very long time.

However, when the beneficiary dies, the rules change. If a spouse is the beneficiary of an inherited Roth IRA, the spouse can roll over the Roth into the spouse's name and continue to allow the funds to grow tax-free with no RMDs during the inheriting spouse's lifetime. 

If the spouse doesn’t rollover the Roth IRA, but rather treats it as an inherited Roth IRA, he or she must make required distributions as soon as the spouse reaches age 70½.

If a child or grandchild is the beneficiary, he or she must withdraw the funds over his or her lifetime.

With a younger beneficiary, such as a grandchild, he or she will enjoy more time before he or she must withdraw the money, increasing the value of the Roth.

Unlike a traditional IRA, a distribution from a Roth IRA doesn’t trigger an income tax.

If the beneficiary is a charity or the owner's estate, or if the owner fails to name a beneficiary, the entire Roth IRA is subject to the five-year rule. That means that the entire Roth IRA must be distributed over the five years, following the death of the owner.

There's one more issue to look at: if, at the death of the Roth IRA owner, the funds haven’t been held in the Roth IRA for at least five years, the earnings on the funds will be taxable to the beneficiary.  However, there’s no penalty for an early withdrawal.

Reference: nj.com (February 2, 2018) “The rules for Inherited Roth IRAs.”

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How the Changes to the Death Tax May Affect You

The changes to the federal estate tax law or “death taxes” went into effect on January 1. MarketWatch’s recent article, “Watch out for the gift tax trap in the new tax law,” reports the new law significantly  increases the amount allowed to calculate taxes on estates, where no federal tax would be applied.

A single person could now die owning up to $11.2 million without paying an estate tax, and married couples now have double that amount (if a timely portability election was made after the first spouse’s death).

Failing to pay attention to the new details in the law can lead to misapplication of the changes.  This could result in significant tax consequences for the beneficiaries of the estate, as it relates to gifting.

The new law leaves in place the rule that says when a person dies, the cost basis of the assets (not including IRAs and retirement plans) would be increased to the value of the asset at the date of the owner’s death. That’s a step up in basis. As a result, the capital gain or profit created in the assets over time is wiped out at the owner’s death.

Remember, the asset only qualifies for gain forgiveness—and the new cost basis—if the owner still owns the asset at his or her death.

It can’t be gifted during the life of the owner or there’s no benefit of step up in basis at the death of the person who previously made the gift.

If you’re considering making lifetime gifts, you should be educated on the consequences of gifting and apply the correct estate planning strategies using current estate tax law. Talk with an experienced estate planning attorney before proceeding with any proposed gifting action.

Reference: MarketWatch (February 1, 2018) “Watch out for the gift tax trap in the new tax law.”

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