Everyday Estate Planning

From the Wall Street Journal comes a tale of how an elderly, well-educated man fell victim to fraudsters who lured him into writing checks for a variety of scams. In less than one year, he'd sent out $23,000 worth of checks -- despite repeated efforts on the part of his family to get local law enforcement and others involved. Finally, the victim granted his son a power of attorney to manage his finances -- but even then, he kept writing checks for scams.

Scammers were extremely effective in gaining his trust, preying on his isolation to gain access to his confidential financial information. Worse, once he had gotten involved in a few of them, his name ended up on a "Sucker List" that was sold to other scammers, leading to an avalanche of other fraudulent offers.

One scam, in particular, has gained in popularity: a fake check, purporting to be an advance payment for winnings to come. The victim cashes the check, sends the cash to the scammer, and then is on the hook when the check bounces a few days later.

If your elderly relative is getting such calls and offers, here are some helpful tips from the article:

• Put their cell phone and landline on the FTC's Do Not Call Registry at https://www.donotcall.gov/.
• Call the AARP's Fraud Fighter Call Center at 1-800-646-2283.
• Put scam mailings into an envelope and forward them to the Postal Inspector-Suspected Mail Fraud -- no postage is required.

As if things aren't hard enough right now, the New York Times reports this week that collection agencies are now working to collect debts owed by the dead. They're banking on the fact (no pun intended) that most people don't know that they AREN'T personally liable for these debts all. Jeez, how low can you get?

Specially trained agents are calling the heirs of the recently departed and politely asking them to pay up the outstanding balances on credit card debt, car loans, and the like. If an estate is filing an official probate proceeding, creditors have a process for filing claims against the decedent's property. But that's not who these collection agents are calling.

They're calling the relatives of people who have died who aren't in formal probate proceedings either because they had created living trusts during their lifetime or because the estate was too small for a probate proceeding.

Here's my advice: No matter how nice these people are (or well-trained), simply ask them why they think that you're legally responsible for the debt. In the vast majority of cases, you aren't obligated to pay them a nickel.  It's true that married people can be jointly liable for debts, and creditors can try and get repaid from the property you've inherited from the decedent depending on your state's laws -- but that's their problem, not yours.

In fact, most estate planning attorneys can successfully get credit card companies and the like to accept a fraction of the outstanding balance on those debts that the survivors are responsible for, because these companies know just how hard it really is to collect anything on the dead's debts.