This month we will discuss the subject of powers of attorney. In week one, we will discuss how to name a financial power of attorney. This is also known as a durable power of attorney.
There are many things to consider when appointing a financial power of attorney (aka an attorney-in-fact). This is an important position. Whoever you appoint would have the ability to make decisions regarding how you manage your finances. While it may seem obvious, it’s important to focus on choosing someone who is organized, trustworthy, and financially responsible.
What powers does an agent have when they have a financial power of attorney?
As stated earlier, the agent with a financial power of attorney can handle your finances just as you can. An agent will have the ability to go to your bank and handle banking transactions. They can contact your investment account broker and manage those funds. They can handle your insurance and sell your house. Of course, you want your agent to only make financial transactions in your best interest while you are incapacitated.
Can things go horribly wrong? Yes! Your agent has the power to clean out all of your bank accounts and sell your home. Heck, if they wanted to, they could take your assets, move to Fiji, and set up a little beach bar! I want to reiterate: It’s important that you choose someone who would never even think of doing something like that. You need to choose someone who will only have your best interest at heart.
Who should be your financial power of attorney?
When considering who should serve as a financial power of attorney, a lot of people are compelled to choose someone close to them. A lot of times this will be a relative, such as your children or possibly a sibling, but it doesn’t have to be. The agent could also be a close friend or even a professional if that is who fits that role in your life. In our practice, we like to make sure that our client acknowledges this very important point: the person you name as your agent in a financial power of attorney will have the ability to handle your finances pretty much the same as you will.
Choose an agent who can communicate effectively
Not only do you need to trust your agent, but we also recommend that you find someone that other people trust! While this element is not completely necessary, it may be important to you that your agent be relied upon to communicate important information effectively with the people in your life.
For example, if one of your relatives says to your agent: “Hey, my Aunty saved a lot of money and invested it well, how much does she have now and what has the spent money been used for?”. Ideally, you would have an agent that relatives intuitively trust to spend your funds in your interest. However, it would be really awesome if your agent took the time out of their day to respond thoroughly to your relative’s questions.
Your agent should be good at bookkeeping
In a perfect world, your agent with financial powers of attorney would be held accountable for the transactions coming out of your assets. A good agent can effectively answer questions about spending and back it up with good bookkeeping!
An agent with power of attorney does not have to live in your state
As we mentioned before, the era of digital banking is here and it allows us the option to choose from a larger pool of agents, regardless of their location. Now, many people think that their agent under a power of attorney cannot be someone who lives out of state. And that is simply not true. Sometimes it helps to have somebody who lives in the state, but that is not a requirement in Tennessee. We do so many things by email and telephone, texting, and online business transactions that your financial power of attorney person, your agent, will likely be handling any business transactions online.
Choose an agent who will outlive you
While this is not a requirement, it is a good idea to think about someone who will outlive you. Generally, when you are using your power of attorney, it’s when you’re incapacitated. While there are times when a durable power of attorney is used on a temporary basis, such as during a medical event, it is more likely going to be during a period when we are at the end of our lives and are experiencing some type of ongoing health condition that is not likely to improve. We recommend that you look for an agent who can help on a continuing basis. A well-suited agent allows everyone to relax and enjoy the time you have left on this earth.
Who should NOT be your durable power of attorney
Again, while it may seem obvious, it is important to reiterate that anyone who is untrustworthy, unlikeable, terrible with money, incapable of balancing a checkbook, or unable to effectively use online banking might not be the best choice for becoming an agent of financial power of attorney. The goal is to find someone who can keep good accounting records and knows exactly where your money went, down to every last penny! A good agent is someone who is willing to communicate with everyone without hesitation. The main point is that no one in your circle should be concerned that your agent is taking advantage of you if you are incapacitated.
Now, if you are not incapacitated, your agent should only be acting if you are telling them to do so. Even if you have your power of attorney take effect immediately, your agent can and should only act under your direction. If you find that the agent acts otherwise, there are legal actions you can take against them in court.
A power of attorney is a useful tool for organizing the “adulting” part of your life, especially in incapacitation. A financial power of attorney should be someone that you absolutely trust; someone who will not give pause to others in your life. Someone who is financially responsible and organized, and someone who is familiar with handling online transactions. It does not matter if your agent lives in your state. In short, find an agent you believe will always have your best interest at heart.
There are many types of powers of attorney. Many powers of attorney are used when creating a well-thought-out estate plan. Do you think you could use a durable power of attorney in Nashville? Schedule an initial call to see if we can help you with your situation.
There are many ways that seniors are preyed upon by scammers. Some ways are more common than others. In each instance, a scammer seeks to gain control of the elderly person’s finances or property for their own benefit. However, in order to stop fraud, it’s important to know the specifics. The following post will discuss how to help your aging parents avoid scams and fraud.
Educate Seniors About Suspicious Phone Calls
Swindlers often cold-call seniors to get personal information. Here are a few common phone scams you can look out for:
Inform your elder to be suspicious of phone calls stating that they have “won” a sweepstakes. These scams will try to get the senior to provide bank account information for direct deposit. They may also try to convince the senior to send a check to pay for the taxes on their “winnings”.
In this scam, an elder will receive a call from someone stating that they are a grandchild who is in trouble and in need of help. When the senior answers the phone they will hear something like this: “Grandma, it’s me… please don’t tell my parents.” The caller will then claim they are out of town and need to be wired money to make bail or to pay for travel expenses. Have a discussion with your loved ones about what to do if they receive a phone call like this. Many families create a “code word” for everyone to use. If the scammer doesn’t know the code word, then they are not who they say they are. A code word is a quick and effective way to vet emergency phone calls.
Voter registration scams
The voter registration scam is when someone calls about registering the elder to vote, asking for their address, birthday, Social Security Number, or a password or PIN code.
An elder may get a call offering discounts on health insurance or a call from someone claiming they work for the government and need a Medicare number or Social Security Number to issue a new card.
How to Help Seniors Avoid Being Scammed on the Telephone
We cannot stress how important it is to encourage seniors to never give out their personal information to strangersover the phone. Even if the people on the phone are claiming to be friends or loved ones!This is one of the best ways you can help your seniors avoid getting scammed. If your loved one is getting an exorbitant amount of phone calls from people they don’t know, consider asking them if you can change the settings on their phone to only allow notifications from numbers already found in their contacts.
If you suspect your aging parent has already been a victim of a fraud crime, report it to the National Elder Fraud Hotline 833–FRAUD–11. This hotline is a free resource created by the U.S. Department of Justice (DOJ), Office for Victims of Crime for people to report fraud against anyone age 60 or older.
Help Aging Parents Avoid Scams by Talking Openly About Finances
Ask your aging parents if they would consider allowing you to join them on their next visit to financial advisors, accountants, attorneys, and other important service providers. If you are welcome to join them, you will have a unique opportunity to prove to the providers your relationship and good intentions towards the senior. If the service provider believes that you have the senior’s best interest at heart, they may contact you when and if they believe something suspicious is going on with your loved one’s accounts.
We must warn you that becoming too involved in a loved one’s financial life may create the appearance of undue influence. It is important to help keep loved ones from being exploited, but you also don’t want to find yourself the subject of a lawsuit claiming that you are the one committing financial exploitation. Please be careful in how you approach discussing finances with the seniors in your life.
Stay Up to Date on Changes Made to Their Estate Plan
Check to see if a non-relative has been included as a representative or beneficiary, or if any relatives have been cut out of the estate plan since the last time you reviewed it. There may be perfectly reasonable explanations for these changes. However, they could also indicate that someone is trying to manipulate your loved one.
Ask Your Senior About Caretakers or Sudden “Best Friends“
These developments could be a sign that someone is trying to work their way into an elder’s life in order to exploit them, financially or otherwise. It might seem innocent enough (and even generous!) for a new friend to “hang out” with an elder and take care of their medical and financial needs. But because of the potential for abuse, we recommend hiring caregivers through a reputable agency. Obtain reviews and make sure they have the proper licensure and training.
Making new friends and meeting people is fine, and even encouraged to minimize the isolation that many older adults face. However, it’s important to communicate with your loved ones to make sure they are not giving un-vetted people undue control over their life.
Investigate Sudden Missing Items or Extravagant New Purchases
It is important to talk with your elderly loved ones about finances so that, if they consent, you can regularly review their statements and stay up to date on other financial developments. One easy way to do this is to have the senior grant you view-only access to their bank accounts. You may also consider a paid subscription monitoring app such as EverSafe or LifeLock. These companies provide constant monitoring for any unusual activity on the accounts. This makes preventing suspicious transactions much easier.
Make sure to ask questions about weird financial transactions. Have there been any large cash transfers? Vehicles suddenly missing or new ones showing up unexpectedly? Heirloom household items that have disappeared? Fancy or expensive new gadgets showing up that are out of character for your loved one to buy? This can indicate that someone has convinced the elder to give them assets or that they have duped the elder into buying something they don’t need.
Recruit Friends, Family, Social Groups, and Neighbors to Keep a Watchful Eye on Your Senior
Keep an open dialogue with neighbors, friends, and advisors who are connected with your aging loved ones. The more people you have looking out, the less likely it is that someone can take advantage of them without your knowledge. Elder abuse is less likely when a senior has a variety of people checking in on them.
A Strong Estate Plan Can Help Aging Parents Avoid Scams
Finally, encourage your aging parents to meet privately with an experienced Elder Law Attorney to determine what they can do to protect themselves from bad actors. Having a legal document in place naming a trusted advisor, or agent, to help handle finances can protect them. An experienced Elder Law Attorney also knows what questions to ask and the warning signs to look for in suspected elder exploitation.
Other Ways You Can Help Aging Parents Avoid Scams
The main point you should take away is that it’s important to have an open dialogue with your aging parents about the variety of scam tactics out there. Send your loved ones this article about how to protect themselves. It has a lot of great tips that can be implemented right away.
Do you want help creating a Financial Power of Attorney or other legal support? Give us a call. You can schedule your free 15-minute Initial Call online. It’s easy! We are here to help.
Elder fraud and financial exploitation have become an epidemic. As a Nashville elder law attorney, I am seeing more than ever before, con artists and family members alike taking advantage of their elderly relatives, friends, or neighbors. The numbers have only gotten worse with the Covid-19 pandemic and a larger aging population.
The best defense against elder fraud is having caring friends or family with the senior’s best interests at heart. But those friends and family can only prevent elder fraud if they know how to spot it.
What is Elder Fraud?
Broadly defined, elder fraud is when someone improperly (or illegally) uses or steals a vulnerable senior’s assets. Every state has a different definition of “elder fraud” or “financial exploitation” of an elderly person. In Tennessee, financial exploitation of elders or other vulnerable adults can be prosecuted under criminal and civil laws. Edler fraud is a form of Elder Abuse.
The 3 Common Financial Scams that Victimize Seniors
A recent survey identified the three most common scenarios of financial exploitation:
Theft or diversion of funds or property by family members.
Diversion of funds or property by caregivers.
Financial scams perpetrated by strangers.
In the two most common scenarios of financial exploitation, the fraud is committed by someone who knows the elderly person. Most people think of fraud as emails from Nigerian princes or telephone scams. In reality, however, financial exploitation is commonly perpetrated by family and friends.
Another common misconception is that adults are only susceptible to elder fraud if they have a condition that can affect memory and reasoning skills. According to the Alzheimer’s Association, 15-20% of elders 65 and older have some type of mild cognitive impairment. But it is important to recognize that any senior can fall victim to elder fraud, and many do.
How Can I Help a Senior Avoid Being Scammed?
There are a number of things you can do to help prevent your loved one from being taken advantage of. Start by educating them on the tell-tale signs of elder fraud and how to protect themselves.
Most importantly, if you are concerned that a loved one is being targeted by a financial predator or a loved one with bad intentions, you should seek help as soon as possible. That may mean calling the police, your loved one’s attorney, and in some cases, even the FBI.
As an Elder Law Attorney in Nashville, I am here to guide you through any of the issues that you may be facing. To schedule an appointment, simply call schedule a free 15-minute Initial Call and we’ll see if we can provide you with some guidance on what to do to help you avoid common scams that victimize seniors.
Many of our Nashville elder law clients wish to remain in their own homes for as long as possible. With the advances in medications, treatments, and home healthcare options, more people are able to stay in their own homes. Whether you are looking for a home healthcare provider in Middle Tennessee for yourself or a loved one, here are some great guidelines to follow:
1. Determine what level of care is needed.
The level of care that you need is the most important determination when you want to hire a home healthcare provider. This factor will affect many other decisions. For example, are you or your loved one dealing with a specific ailment? If so, it may be preferable to choose a provider or agency with experience in that field. Additionally, do you need round-the-clock care, someone to come a few hours a day, or something else entirely? There are adult day programs that can provide an outlet for social activities and certain therapies. Adult day programs can be used on their own or in conjunction with a home healthcare provider. You may wish to ask your elder lawyer for a list of possible facilities in the greater Nashville area or you can access statewide resources on the Tennessee Department of Human Services website.
2. Understand the difference between Home Healthcare and In-Home Care.
Home healthcare is provided to those recovering from surgery or hospitalization, or those needing continuous medical care. These services include skilled nursing care, physical therapy, occupational therapy, speech therapy, and administration of medication. In-home care on the other hand provides ongoing non-medical assistance following illness or surgery or for chronic disease or disability.
3. Decide if you want to hire someone on your own or if you want to go through an agency.
There are advantages and disadvantages to both options. If you choose to do it on your own, you will likely have more say in who will be providing the direct care, as well as what services he or she will provide, but you will be responsible for handling payroll and taxes. On the other hand, an agency will be able to screen applicants thoroughly and can handle payroll and other paperwork for you.
4. Ascertain how you will pay for the home healthcare services.
An experienced elder attorney can point you toward various resources, depending on your needs. You or your loved one may have long-term care insurance set up for just this situation, or you may be looking to Medicare, Veterans Administration, and/or TennCare/Medicaid to assist with the costs. Medicare will only pay for home healthcare, but not in-home care.
One step at a time
Deciding to hire a home healthcare provider in Middle Tennessee is a big job. Break things down into manageable objectives and avoid becoming overwhelmed. At any point in the process, an experienced estate planning and elder law attorney in the Nashville area will be able to offer practical advice and suggestions. If you are unsure about what to do consider scheduling an hour-long Strategy Session and get legal advice from our attorney. We also have a planning tool called the “Care and Savings Assessment”. We use this tool to help our clients qualify for TennCare.
Many people have sufficient income to maintain a regular lifestyle but are unable to afford the high cost of long-term care. With the average cost of long-term care around $7,000.00 a month, it is incredibly difficult for most families to afford it, even more so after retirement. That’s why it’s a good idea to plan for qualifying for TennCare, also known as Medicaid.
Evaluate and restructure your assets to qualify for TennCare
As we discussed in our blog last week, there are certain criteria you need to meet to be eligible for TennCare. As an elder law attorney, one of my jobs is to help families get their loved ones qualified for TennCare while maintaining resources available for the rest of the household.
One of the ways that we do this is by restructuring a family’s assets. We do this by turning resources that are countable for TennCare purposes into items that TennCare does not count as part of its eligibility assessment
This process is known in the elder law community as a spend-down. The goal of the spend-down is to make you or your loved one eligible for TennCare as far as your assets are concerned. If you are overqualified for income-based criteria, we can use a special type of trust called a Qualified Income Trust, or a Miller Trust, to reduce your income. The goal of a spend-down is to maintain the quality of life for all family members including those who need long-term care.
What is a “spend-down”?
Bob needs to go into long-term care. Bob is eligible based on his income. He makes $2,000.00 a month of social security retirement income. Bob also has a house, a car, and $50,000.00 in the bank. Bob is widowed and his children are adults.
We need to do something with at least $48,000.00 from Bob’s bank account in order to make him eligible for TennCare. His house and his car are not countable for TennCare purposes in most cases. What can we do?
Make improvements to his home that would improve his quality of life and access to the things that he needed in the home. This might include:
Grab bars in the shower or hallway.
A ramp into the main entrances.
Paving the driveway or expanding it closer to the door
Buy some things for Bob that his Medicare did not cover, such as:
Top of the line mobility devices
There may be other things that would improve Bob’s quality of life. There are things we can spend money on or convert into income. I am also going to suggest to everyone that they use the money to make arrangements for end-of-life needs if they have not done so already. Since at some point Bob’s children will need to make arrangements for his burial or cremation, paying for it now from his excess funds is a great way to make those funds unavailable for TennCare purposes and meet a future need.
Bob might want a Care and Savings Assessment
It’s not easy getting approved for TennCare / Medicaid, and we know it! That’s why we offer help in planning your steps to qualify. It doesn’t matter what your starting point is, we’re here to help you navigate the process with one goal: get our clients the quality of care that they need. Contact us if you would like to make plans for qualifying for TennCare.
Last week we defined TennCare and how it applies to our clients. This week I want to go more in-depth with how TennCare serves Tennesseans with long-term care.
Many people believe that Medicare benefits will cover nursing home care once an individual is 65 or older, but this simply isn’t true. While Medicare covers the first 100 days, it doesn’t cover long-term assisted living. Read more about Medicare here.
Back to TennCare/Medicaid…
My Mom doesn’t have long-term healthcare insurance. What are my options?
Payout of pocket until you run out of cash – This is an unrealistic option for most families. Nursing home care is expensive. Not a lot of people have an extra $7,000-$11,000 a month in their bank accounts.
Do a reverse mortgage on her home.
Qualify for the TennCare / Medicaid program called “CHOICES”.
As you can see, options 1 and 2 are very unpleasant and leave nothing left for a loved one’s legacy. However, option 3, CHOICES, is definitely something worth looking into.
What is CHOICES?
CHOICES is the category of TennCare that provides Long-Term Services and Supports (LTSS) such as nursing home care.
What is the process for getting qualified for CHOICES?
In order to be eligible to receive benefits from TennCare/Medicaid your loved one must first qualify within these three categories:
How does someone become medically eligible for TennCare CHOICES?
The state of Tennessee will determine who is medically eligible to receive TennCare Long-Term Services and Support (LTSS) by using a pre-admission evaluation (PAE). This PAE is used to determine if the applicant can do basic life skills on their own without help. The PAE will also determine if the applicant is safe in their current environment.
The PAE is a strict evaluation and it is performed on a case-by-case basis. An applicant must receive a score of 9 or higher on a 26 point scale in order to be considered medically eligible for TennCare Long-Term Support Services.
For example, a caregiver or healthcare provider may be asked about a patient’s level of ability to do things and how much assistance is needed.
The following Activities of Daily Living (ADLs) are covered in the PAE evaluation:
If you or your loved one is unlikely to get to a nine or higher on the PAE, it is always appropriate to ask for a “safety determination” evaluation as an alternative route of becoming medically eligible for Choices.
How can someone become financially eligible to receive CHOICES?
You must be able to prove that the applicant has a low income and little assets. As of January 2022, an individual applying for TennCare CHOICES cannot have an income exceeding $2,523.00 per month. Additionally, the applicant cannot have more than $2,000 in assets. This includes any money in the bank and investment accounts but also requires consideration of retirement accounts, life insurance policies, real estate, artwork, jewelry, and any other valuables. When we talk about the assets for a couple of things get a little more complex. The most important thing is that both the applicant and their family are taken care of, both medically and financially.
My Mom is over the limits for income and assets? What do we do?
If the applicant is in excess of the amounts we can plan for that! We have a tool to help people who have excess income and assets yet need to qualify for TennCare/Medicaid called the “Care and Savings Assessment”. With this Care and Savings Assessment, we work to determine the best way to structure you or your loved one’s finances, either now or in the future. We plan so that our clients have the peace of mind knowing they can qualify for TennCare if and when they need it!
It is often helpful to have an attorney assess your financial situation and offer recommendations on how those finances may be restructured to qualify for TennCare Long-Term Services and Support (LTSS). As an experienced TennCare planning attorney, I can help you evaluate your risk and create a plan that takes care of everyone in the family.
Are you ready for help with TennCare planning? Contact us and we can discuss your plan. Next week we will go over some examples of how we restructure an individual’s finances to meet their needs for long-term care.