Most Recently Updated Sept. 16, 2017.
From our “Ask a Question” mailbag: Protection From Elder Financial Scams.
“My mother lives by herself in Philadelphia and is having trouble managing her finances, and I discovered she wrote a check to some person who called her on the phone. It wasn’t much, but she was confused and in the future might get scammed out of a large sum by some telemarketer or criminal. She needs protection from scams.”
Trusts Can Provide Protection From Scams.
Although the Internet connects more of our elderly population to loved ones and the rest of the world, this connection has also opened up new elder abuse opportunities. You’re right to be concerned. As well, you should wonder if the person who conned her out of a small sum will not return for more.
Protection From Scams Using a Revocable Trust.
A Revocable Living Trust can help keep a person’s assets organized. Further, if she named you as co-trustee, you would have the power to monitor her accounts for fraud. Consequently, you can step in immediately if you saw an unfamiliar pattern of withdrawal or an unexplained check. In spite of this, if someone calls her and she writes a check, you probably still won’t know about it until the check clears. That might be too late. In the alternative, your mother could name you as the sole trustee. As a result, only you would have the exclusive power to write checks on behalf of the revocable trust. Although your serving as the sole trustee provides her more protection, your mother might object to surrendering that much control.
See my website for more details about Revocable Living Trusts.
Protection from Scams Using an Irrevocable Trust.
In the alternative, your mother can form an irrevocable trust naming you as the trustee. Your mom could transfer her assets into the trust effectively giving up all control. In this type of irrevocable trust, she remains the beneficiary. As trustee using the property for her care would be your sole responsibility. This kind of irrevocable trust provides maximum asset protection from telemarketers and fraud. The property is not in your mother’s name or are they in your name. You are the only person who can write a check. Further, your mother can never change that power, even if she later is convinced by someone to try. Therefore, you have the authority to verify each bill’s legitimacy.
Though some irrevocable trusts offer protection from creditors and provide tax planning, this type of trust would not—because your mother would remain the beneficiary.
See my website for more information about a variety of Irrevocable Trusts.
Various Tools Provide Protection From Scams, Let’s Talk!
The best way to use a trust to help your mother will depend on her comfort level in giving up control. Everyone is different, so I suggest that we talk. This way we can discuss her options and to see which, if any, she is willing to try. The suggestions I describe above are broad strokes, and trust terms can be crafted to fit her comfort level.
Protection From Elder Financial Scams:
In conclusion, in this Post, I tried to explain how trusts can provide protection from elder financial scams. So, let me know how I did, comments and questions are welcome!
Furthermore, I would be happy to answer your questions. If you have any other matters for a Philadelphia Asset Protection Attorney about what steps can be taken to protect the assets of a Philadelphia, PA resident, feel free to contact our office for a free consultation. We try to make the process painless!
Wills, Trusts, Probate, and Estate Litigation, It’s All We Do!
Author, Peter Klenk, Esq.