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.

In what's starting to seem like a series on the ways in which powers of attorney can cause heartache -- or worse, elder abuse -- comes a story out of St. Louis. The heirs of one of the last surviving Munchkins from the film The Wizard of Oz, Mickey Carroll (real name, Michael Finocchiaro), are suing his caretaker, Linda Dodge, claiming that she and others took advantage of the actor in his final years.

The heirs claim that Mr. Carroll, who died Thursday, May 7, signed powers of attorney transferring power over his property and health care decisions to Dodge when he was unable to understand what he was signing. They further claim that Dodge then kept him isolated, spent his assets, and kept the money that Carroll made from appearing at events.

Dodge counters that the dispute is just a "family squabble" and that she took good care of Carroll.

People often ask me what to do with their estate plans when they move to another state. Here's the answer: if you think you're going to be in that new state for a while, it makes sense to update your estate plan to reflect that state's laws.

It's not that your estate plan will be invalid in another state. With the exception of gay marriage (in some states), contracts signed in one state are valid in another. But it can create inconvenience for your heirs if they have to administer an estate under, say, California law, if a parent died while residing in Georgia -- especially if the kids live in Georgia too.

Also, powers of attorney, which are important legal documents granting another person the right to act on your behalf with respect to property and health care, are created by state law, and your rights, especially with respect to health care decisions, vary from state to state. For that reason, and additionally because banks and doctors like working with forms that they know, it's a good idea to at least create new powers of attorney if you move to a new state.

The Seattle Times reports today that a man stands accused of systematically draining his 93-year old mother's bank accounts, racking up charges on her credit card, and mortgaging her paid-off condo. All after his mother had had been hospitalized following a stroke.

While she was in a nursing home, he was, the prosecutors allege, spending her money on trips to casinos, country clubs, tanning salons, and his own health insurance, while leaving her nursing home bills unpaid.

How did he pull this off? Simple: She'd named him as her agent under a durable power of attorney the week before her stroke. With it he was supposed to be making sure that she was well-taken care of. But because that document gave him access to all of her accounts and no one was watching over how he used that authority -- allowing a nursing home bill of $37,000 remain unpaid -- he was able to, or rather stands accused of being able to, use that money for himself instead.

And the moral to this sad story? Be careful who you name to act on your behalf in the event of your incapacity. You really are giving that person a blank check.