News & Resources: Blog

Safety Act for Seniors

Published: April 20, 2023

As of May 24, 2018, the Senior Safe Act was signed into law to make it easier for financial institutions and regulators to report cases of potential financial exploitation of senior citizens.

Those who are covered by this law include financial institutions, investment advisers, transfer agents, broker-dealers, and their properly trained employees. Any reports of suspected exploitation must be made in good faith and with reasonable care.

Financial Exploitation

According to the National Council on Aging, older Americans lose between $2.6 billion and $36.5 billion each year to financial abuse and fraud. It is difficult to ascertain accurate figures because much of the abuse goes unreported. Financial exploitation takes many forms, such as:

  • Family members, friends, or caregivers siphoning money from the senior’s financial accounts
  • Scams involving someone posing as a government official, financial professional, or something similar
  • Fraud involving home repairs or utilities
  • Scams by people posing as charity organization workers
  • Extortion

Senior Safe Act

Under the Senior Safe Act, financially oriented companies and entities, such as credit unions, banks, investment advisers, broker-dealers, insurance companies and agencies, are protected from being sued for reporting suspected fraud targeting senior citizens. To qualify for protection, though, these entities must properly train the employees to recognize warning signs and handle the potential victim’s information securely and appropriately. 

More than 36,000 reports of suspected financial elder abuse were filed with the Financial Crimes Enforcement Network in 2020. This was a 49% increase since the law was enacted in 2018.

Detecting Financial Abuse

Since there are many types of financial abuse, there are many red flags to watch for, including:

  • ATM withdrawals at unusual times
  • Checks written to strangers or companies that the senior hasn’t made payments to before
  • Newly created financial documents that the senior doesn’t know about or understand
  • Fraudulent signatures on financial documents
  • Unusual or sudden changes in spending habits
  • Unpaid bills

Preventing Financial Abuse

Awareness of the types of financial abuse and the red flags that can indicate the abuse is the first step in prevention. Talking with your elderly loved one about the risks of financial abuse and assuring them that it’s not something to be ashamed of will help them feel more at ease when reporting suspicious activity.

If a family member or friend is managing a senior’s finances, it’s a good idea to have another family member or friend checking in on the senior’s accounts to provide a system of checks and balances.

Reporting Financial Abuse

Reporting financial abuse is vital to help protect the abused and prevent the same abuse from happening to others. To learn more about reporting financial elder abuse, visit the Consumer Financial Protection Bureau.

Our law firm is dedicated to keeping you informed of issues that affect seniors who may be experiencing declining health. We help you and your loved ones prepare for potential long-term medical expenses and the need to transition to in-home care, assisted living care, or nursing home care. If you have questions or would like to discuss your legal matters, please do not hesitate to contact our office at 215-364-1111 to schedule a consultation.

CLIENT Testimonial

It is important to plan your estate to ensure that your assets, interests, and those you love will be protected after your death. However, without proper guidance and advice from a qualified estate planning attorney, many individuals make costly mistakes. Beyond undermining your intent and diminishing your financial legacy, poor planning can create additional stress to your heirs in their time of grief.

Six common errors frequently happen during the estate planning process. These mistakes often occur because the complete financial picture was not fully considered. It is easiest to avoid estate planning mishaps by knowing what they are before you begin or looking for these errors when reviewing and updating your plan.

Financial procrastination causes problems. While examining your mortality and making end-of-life preparations is not a particularly fun activity, try viewing it as helping and enhancing your loved ones' future lives while creating a sense of peace during your own. 

The need to protect your finances using wills, trusts, and power of attorney (POA) documents is not solely the domain of the elderly. Putting off the drafting of legal documents necessary to protect yourself and your inheritors can lead to disastrous outcomes.

By far, failing to create an estate plan is the most common mistake. Even if you do not have a lot of money, you need a will to protect any minor children you have by naming their guardians. Your will also ensures your asset distribution to heirs is carried out according to your intentions when you die and names a representative to handle debt obligations, final taxes, and other estate administrative duties. Dying without a will or "intestate" can lead to dire consequences.

Outdated wills, forms, and POAs create problems. If you made a will twenty years ago and have not reviewed and updated its contents, chances are many of the details no longer reflect current assets or beneficiaries. Estate planning is not a "set it and forget it" proposition. Reviewing estate planning documents and beneficiary forms every two years is generally adequate, barring a major life change such as divorce, birth, death, remarriage, or relocation to another state.

Beneficiaries without coordination can create expensive oversight. Beneficiary forms for retirement accounts like 401(k)s and IRAs, annuities, and life insurance policies may constitute a significant portion of your estate's assets. These beneficiary forms are legally binding and will supersede the contents of your will. Failure to update beneficiary forms can lead to an ex-spouse receiving assets that preferably would go to your heirs. Routine checks of all beneficiary designations are best practices for estate planning.

Failing to title trust assets properly can lead to probate. While not everyone requires a trust, those who do must carefully retitle their assets into the name of the trust. Forgetting to add more recently purchased property or opening a new account requires you to title them into the trust to receive trust benefits. Whether real estate, cash, mutual funds, or stocks, if you fail to move the asset into the trust, they become subject to the probate court, possible tax consequences (depending on the trust type), and a public record of these assets.

Life insurance can trigger estate tax. Life insurance can provide heirs with liquidity without the sale of assets and tax consequences when handled correctly. However, if a wealthy individual dies while maintaining ownership of their life insurance policy, they may inadvertently create a tax event for their heirs. Although life insurance death benefits are not subject to state or federal income taxes, any "incident" of ownership by the decedent can create an inheritance tax.

An estate planning attorney can help shelter life insurance proceeds from high-value estates by gifting the policy to an Irrevocable Life Insurance Trust (ILIT) or draft a new trust to purchase a new policy where the trust is the owner and beneficiary. A policy owned by the trust does not create a taxable situation to death benefits. Your attorney's careful structuring of this trust type is complex but can provide proper protection.

Joint ownership of assets with your children can lead to disastrous consequences. Naming your children as co-owners of assets, even digital, permits their creditors to access your money. The better way to address the situation is to give your adult child power of attorney and assign them as a beneficiary to a payable on death bank or brokerage account. This tactic permits them to access your funds if required during your lifetime. However, it keeps your assets from your child's estate and away from their potential creditors.

Ultimately the biggest error you can make is not finding the right estate planning attorney to guide you. This specialized attorney receives training on avoiding probate, tax implications, and asset protection if you require long-term care. Proper planning with the right guidance will help you avoid costly estate planning mistakes and protect your family's future financial well-being.

If you have questions or would like to discuss your legal matters, please do not hesitate to contact our office at 215-364-1111 to schedule a consultation.

- Estate Planning Mistakes to Avoid

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CLIENT Testimonial

Scott Bloom is one of the most caring, responsive, elder law attorney you can find in central New Jersey. He has been a great support not only for my parents but also for me and my siblings. We are deeply grateful for everything he has done over the past 3 years. I am thankful ever day that he came into our lives. In the past year, we lost our father to the terrible disease of dementia, but we are relieved to know that our mother is still in good hands with Scott by her side. Our entire family highly recommends Scott Bloom and his team!
- Annette B., Allentown, New Jersey

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