Q: What is financial exploitation of seniors?
A: Financial abuse of seniors includes the taking of assets, whether illegally or improperly, which belong to the victim. The definition of this crime continues to evolve among the professional disciplines that are tasked with its prevention. Seniors are often the victim of financial exploitation. Major financial exploitation was self-reported at a rate of 41 per 1,000 surveyed, which was higher than self-reported rates of emotional, physical and sexual abuse or neglect.
Q: How can we use estate planning strategies to reduce the potential of financial exploitation of vulnerable older adults?
A: Legal protections begin with voluntary legal planning while an individual has the mental capacity to execute legal documents. It then moves along the full spectrum to involuntary court proceedings or conservatorships.
Q: How else can I protect an older person against frauds and scams?
A: Unscrupulous people target seniors and will abuse or take advantage of them. Consider doing the following:
- Learn about the types of abuse and associated warning signs.
- Get on the National Do Not Call Registry to reduce telemarketing calls. Visit www.DoNotCall.gov or call 888-382-1222 to register your phone number.
- Don't sign any documents that you don't completely understand without first consulting an attorney, family member or close friend that you trust.
- Do not provide personal information over the phone unless you initiated the call and know with whom you are speaking.
- Tear up or shred credit card receipts, bank statements and financial records before disposing of them in the trash.
Source: National Center on Elder Abuse, Administration on Aging
Q: My parents are thinking about selling their home they have lived in for many years but are worried about capital gains. What do they need to know?
A: If you sell your home at a significant profit, some or all of that gain could be taxable. However, in most cases, if the home you sold counts as your main home, the first $250,000 of gain is not taxable - $500,000 if you are married and filing jointly. The home would qualify for exclusions if the following is true:
- You owned the home and used it as your main home during at least two of the last five years before the date of sale. If you have a disability and a physically or mentally unable to care for yourself, you only need to show that your home was your residence for at least 12 months out of the five years leading up to the date of sale. In addition, any time you spend living in a care facility counts toward your residence requirement, so long as the facility has a license from a state to care for people with your condition.
- You did not acquire the home through a like-kind exchange, known as a 1031 exchange, during the past five years, and
- You did not claim any exclusion for the sale of a home that occurred during a two-year period ending on the date of the sale of the home.
Source: irs.gov publication 523
For almost 20 years, the Elder Law Practice of Timothy L. Takacs has been helping families respond to the legal, financial, physical and psychological challenges presented by long life, illness and disability. As an elder law practice that specializes in Life Care Planning, we help families protect assets and coordinate care. Founder Timothy L. Takacs, Certified Elder Law Attorney, one of the most respected elder law attorneys in the nation, leads an interdisciplinary team of care coordinators and other professionals who work together to enhance the quality of life for elders. "Like" Elder Law Practice of Timothy L. Takacs on Facebook and see the latest from Elder Law Practice in your Facebook newsfeed each day. To learn more, call 615-824-2571.