What Seniors Can Do to Protect Themselves From Identity Theft (Part 2)
Last week I told you about what you can do to monitor your credit report to keep an eye out for identity theft that may have occurred as a result of the recent Equifax data breach. This week we’ll talk about a more proactive approach, trying to stop theft before it occurs. There is something called a security freeze, also known as a credit freeze. First let’s be clear about what thieves can and want to do with the information taken from Equifax. With your Social Security number, birth date and other identifying information, thieves can apply for loans, credit cards or other types of credit in your name. They receive the money or make purchases in your name and leave you with the unpaid debt. Financial institutions look to you to pay back the money and when you don’t place black marks on your credit and take legal action against you to collect on the debt. If I place a security freeze on my credit file, when someone applies for credit in my name the request cannot move ahead without “unfreezing” it, using a personal identification number (PIN) which I have chosen. Thieves can’t proceed because the financial
What Seniors Can Do to Protect Against Identity Theft
You may have heard about the most recent data breach that occurred earlier this month. The credit reporting agency, Equifax announced that their supposedly secure computer system was hacked. As many as 143 million Social Security numbers, names and addresses were accessed. Odds are that you and/or your family members were affected by this widescale breach. Security experts explain that whoever stole this information will likely sell it to identity thieves who will then use it to establish new credit and bank accounts in the names of the people whose Social Security numbers were compromised. Once these accounts are established then the thieves can make purchases and obtain loans which, of course, won’t be paid for or paid back, all negatively affecting credit. It is a real mess to fix. Seniors are particularly vulnerable to fraud since many may not be able to detect the theft as readily as younger people. So, what can you do to protect yourself and your loved ones? After announcing the data breach, Equifax set up a website to answer questions and disseminate information, www.equifaxsecurity2017.com. To check whether you are affected by the breach you can type
Preparing for a Natural Disaster
With all the news stories about Hurricanes Harvey and Irma, the destruction caused to Texas, Florida and Caribbean islands, and their aftermath, one story caught my eye. The deaths of 8 nursing home residents in Hollywood, Florida highlights the especially vulnerable position that the elderly face in times of crisis and public upheaval. In case you missed it, the Florida nursing home lost power along with many other businesses and homes. Temperatures in the facility soared without air conditioning causing the deaths of the elderly residents, who have less ability to handle temperature extremes. There were some reports that the home was located across the street from a hospital and that the facility did not immediately ask for assistance from either police or the hospital until it was too late for the residents who died, although other news articles made no mention of a delayed response by the nursing home’s administration. What can we learn, if anything, from these tragedies? Something that I always tell clients and prospects about long term care. It is better to plan ahead then to react in crisis. Frequently we have had clients who retired years earlier to
Medicaid and Annuities (Part 2)
In last week’s blog, I started to tell you about annuities and how unique they are when we are considering Medicaid. In order to achieve Medicaid eligibility, I must spend down my assets to below $2000 (married couple rules permit assets up to, in some cases, $120,900). Remember that an annuity in its basic form involves taking an asset and turning it into a stream of income. Is it possible, then, that an annuity is not an asset for Medicaid purposes, but instead is really income? If true the annuity would not need to be spent down. The answer, as with much surrounding Medicaid is sometimes yes and sometimes no. There are Medicaid regulations that address the question and provide that certain types of annuities are in fact treated as income and not assets. They are commonly referred to as Medicaid compliant annuity. The requirements are that the annuity must be an immediate annuity. It must also be noncancelable, nonassignable and actuarially sound. Let’s break it down. Remember from last week that an annuity can be immediate or deferred. If I buy an annuity from the insurance company for $100,000 and
Medicaid and Annuities (Part 1)
The topic of annuities comes up regularly when we get a call regarding the need for Medicaid benefits to pay for long term care. Sometimes the caller has questions about whether it is a good idea to buy an annuity in anticipation of Medicaid. Other times someone has been sold an annuity years before and now we must figure out what to do with it so he/she can qualify for Medicaid. Before we get into specifics, let’s define an annuity. Very simply, an annuity is a contract which exchanges an asset in return for a stream of income paid over a set period of time. These contracts are typically sold by insurance companies who offer a rate of return depending on how soon one starts receiving that income stream and how the assets entrusted to the insurance company are invested. Annuities come in many shapes and sizes but can be classified in a few ways. For example, there are fixed annuities and variable annuities. Fixed annuities provide a guaranteed amount based on the terms of the contract entered into. On the other hand, payments from a variable annuity can vary because some or
What to Do with Your Pet After You’re Gone (Part 2)
Last week I was talking about options when considering estate planning for pets. One is to leave your pet to someone or some organization along with a sum of money to provide for the pet’s care. I leave my dog Casey to my friend George, for example, with $15,000 to care for her. But, what if I want some assurances that George won’t give Casey away and keep the money? In that case it would be better to set up a “pet trust”. A written document establishes the purpose of the trust (ie. who it is to benefit) and how the assets held in the trust are to be administered for the beneficiary. You might remember Leona Helmsley, the hotel heiress who left $12 million to her dog. She actually left the money in trust, managed by a trustee for the life of her Maltese. The trust should also provide who receives any money left in the trust when the pet dies (a remainder beneficiary). New Jersey law expressly allows for the creation of a trust for the care of an animal alive during the settlor’s (the person creating the trust) lifetime. The trust terminates at the death of