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Minnesota’s attorney general became the third attorney general to file suit against two California companies that allegedly sold inappropriate living trusts and annuities to seniors. Last year, state attorneys general in Pennsylvania and North Carolina filed suit against the same companies. In 2006, the North Carolina attorney general won an order preventing the companies from selling products in the state while the lawsuit against it is pending.
According to the lawsuits, the two companies, both run by a father and son from California, convinced seniors they were receiving impartial investment advice when in reality the companies were pushing their own products. The lawsuits allege that sales agents convinced seniors to purchase living trusts that were not necessarily in their best interest and were not tailored to their individual needs. After consumers agreed to purchase the living trust plans, the agents allegedly persuaded them to exchange or convert their investments for annuities, even if the annuity would have a negative financial impact or tax consequence.
In one case, an 85-year-old Pennsylvania man was allegedly sold a 10-year deferred annuity with his first payout not coming until he turned 95. In North Carolina, according to the attorney general’s charges, an agent convinced a couple in their seventies to cancel an insurance policy, cash in their investments, and put all of their savings into an annuity that he promised would earn 7 percent interest. The agent didn’t tell them the interest rate was guaranteed for only one year and they would face steep penalties if they needed to withdraw their money. Another North Carolina woman cashed in an IRA to purchase an annuity after the sales agent allegedly told her the IRA would run out of money in five years. He allegedly didn’t tell her that the annuity would cut her monthly income from $1,700 to less than $300. There are a number of steps you can take to avoid getting scammed, including avoiding high-pressure sales tactics and highspeed sales pitches, not trusting companies that say the AARP is selling or endorsing their product, and making sure a living trust is properly funded. In addition, to help older adults and families make better decisions about annuities, the Healthcare and Elder Law Programs Corporation (H.E.L.P.) has created a Web site, www.annuitytruth.org. The site features H.E.L.P.’s new seven-part “Special Report: Annuities and Older Adults,” as well as a list of federal and state agency contacts for making complaints if a person has been sold an annuity in unsuitable circumstances.

Of course one of the most important things you can do is make sure you get estate planning advice from a qualified elder law attorney.

http://www.ctseniorlaw.com/download/pro_news_mayjun07.pdf

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Figuring out how to plan your estate can be a big job. Here are some common questions and answer that may help you.

What is an estate plan?

An estate plan is a systematic plan for the accumulation, conservation and distribution of an estate. A good estate plan minimizes taxes and accomplishes the owner’s goals efficiently and effectively. When the owner dies, the estate plan distributes the estate with minimum administrative costs. The sooner an estate plan is made, the more effective it can be.

Should I have a will if I don’t have children?

Everyone should have a will, including you and your spouse. Believing that everything the two of you own will pass automatically to the surviving spouse when one of you dies is a risky proposition. Your property could be distributed according to the state’s inheritance laws instead of going directly to the surviving spouse.

Should I set up a trust, or do I even need one?

It depends on the size of your estate and the purpose of the trust. If your estate is under the current estate tax exemption amount ($2 million for 2006 through 2008, and $3.5 million for 2009) and small enough to qualify for quick and inexpensive probate in your state, you might not need one. However, a trust can help you avoid a court hearing if you become incompetent or unable to provide for yourself, or if you want to provide for grandchildren, minor children, or disabled relatives. What happens to my 401(k) account when I die? If you designated beneficiaries when you signed up for a 401(k) account, they receive the money in your account when you die. Otherwise, your estate automatically becomes the beneficiary. If your beneficiary is your spouse, he or she has most of the same options that you would have if you were leaving your company to take another job.

 http://ocelderlaw.org/blawg/index.php?itemid=72

With the enactment of SB 1018 (Simitian), which requires all bank employees to report all suspected cases of elder financial abuse going into effect today, the California Bankers Association has compiled a list of tips to help consumers be more vigilant in keeping seniors safe.

“More and more, California’s seniors have become the targets of unscrupulous fraudsters who want nothing more than to part seniors from their hard-earned money,” said CBA president and CEO Janet W. Lamkin. “While law enforcement, along with California’s financial institutions, work hard to make sure that suspected cases of elder financial abuse are reported and investigated, we want to remind all Californians that we all have a role to play in keeping our seniors safe.”

Elder financial abuse is a somewhat unique crime in that, oftentimes, it is a member of the family, close friend or caregiver who ends up perpetrating the crime, making it that much more difficult to detect.

http://ocelderlaw.org/blawg/index.php?itemid=84&catid=4 

By Mary Frances Gurton Staff Writer
San Gabriel Valley Tribune

PASADENA - Tommie Brown said he worked hard, paid his bills on time and kept his credit clean all his life, only to fall victim this year to a $350,000 mortgage fraud scheme.

The longtime Pasadena resident said he became aware of the scam after a mortgage lender who had befriended him used his personal information to purchase two homes in Georgia unbeknownst to him.

“I went to purchase a used car in El Monte last July,” said Brown, 60, sitting in the dining room of his modest Pasadena home. “When they ran the credit check, I found out there are loans in my name on two houses in Georgia.”

Embarrassed and uninformed as to how to handle the problem, Brown said he has yet to contact police and avoids calls from creditors at Washington Mutual and other financial services corporations asking for payment on the notes.

“I told them I had no part in stealing the money,” said the retiree, who spent 27 years in the shipping and receiving department of a local Vons market. “I just want to get through this and come out the way I was before.”

Various types of identity fraud, ranging from bait-

and-switch scams, pyramid schemes, variable annuity sales, online escrow fraud and charity scams, are perpetrated against seniors each year - and are continually evolving, according to experts.

In 2005, there were 8.9 million identity theft cases reported nationally, with about 1 million of those in California, said Melanie Bedwell of the Department of Consumer Affairs.

Seniors are especially vulnerable, according to Petra Niles, director of the Elder Abuse Prevention Program at Wise Senior Services in Santa Monica.

“On a day-to-day basis, we get several calls on all kinds of cases,” said Niles. “This is happening all over the state.”

Niles said it is common for perpetrators to build relationships with numerous seniors, all the while testing for those who may be easy prey for a tried-and-true scam. Continue Reading »