Watch Out For The Latest Tax Scam That Could Snare Your Aging Clients

Watch Out For The Latest Tax Scam That Could Snare Your Aging Clients

Jun 20, 2016 | aging, aging investor, elderly, finances for elders, scammers, senior citizen investor, senior investor, seniors finances


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Carolyn L. Rosenblatt, is a nurse and elder law attorney, along with blogging for Forbes.com and author of 4 books on aging. She is a co-founder of AgingInvestor.com and AgingParents.com
The Fraud Watch Network sent out a press release detailing a new and fast moving telephone scam targeting taxpayers across the country. As many of us are aware, our aging loved ones are quick to fall for these phone scams. Thousands of victims have already lost more than $1million.  Please caution your aging parents and others as well.

Here's how it works:

Fake IRS agents call taxpayers, claim they owe taxes, and pressure them with demands for payment using a prepaid debit card or a wire transfer. They threaten their targets with arrest, deportation or loss of a business or driver's license, said J. Russell George, Treasury inspector general for tax administration.

The fake agents mask their caller ID, making it look like the call is coming from the IRS. In some cases, even more frightening, fake agents know the last four digits of Social Security numbers.  They go so far as to follow up their targets with official-looking emails.

The reports about the scam describe how immigrants were targeted first, and threats of deportation were very effective.  It has since spread to thousands of other victims in most states.

Imagine your aging parent getting one of these calls.  Unsuspecting, intimidated and wanting to comply.  You, as the adult child with more of a fraud antenna might wonder why a supposed IRS agent would call you, as the IRS always communicates with a taxpayer via mail. Your aging loved one might not think of that.  When a second call comes in, once again with caller ID masked and faked to look like the police department or the Department of Motor Vehicles, it looks even more like the threat  of consequences for not paying is real.

What if your parent really does owe back taxes? They can call the  IRS directly at 1-800-829-1040 and get the truth.  The IRS never demands wire transfers or debit card payments nor do they use license suspension or deportation as a threat.

Most of us understand that when someone demands payment over the phone by wire transfer or debit card that you should simply hang up.  But not everyone knows this, particularly the 20,000 or so people who have been tricked so far with just this scheme.

So, keep your loved ones safe, especially your elderly family members. Warn them about this latest scam and follow up with questions as to whether they have gotten any calls like the ones described here, from anyone posing as an IRS agent. These scams escalate around tax time.

In consulting with families who have elderly loved ones as we do here at AgingParents.com, we often find that adult children want to believe that their parents are still competent and that such a thing could never happen to them because their parents are intelligent, or well educated, or they had work experience in finance, etc. But these clever scum with the fake IRS calls can probably fool even a smart, well educated person because the scheme gets past "filters" like caller ID and knowing the last digits of a person's Social Security number.  This is too scary to ignore.

Not only am I going to warn my 91 year old mother in law about this, but I'm going to ask her to tell all her friends at the seniors' community where she lives.  I'll let my own adult kids know about this scam too. I hope you will do the same.

Until next time,
Carolyn Rosenblatt
AgingParents.com & AgingInvestor.com

 

Watch For The 6 Warning Signs of Diminished Financial Capacity

Watch For The 6 Warning Signs of Diminished Financial Capacity

Jun 18, 2016 | aging, aging investor, diminished cognition, elder investor, elderly, financial capacity, senior investor

Most of us probably think we know what to look for in an aging client who has diminished capacity. But have you every studied the subtle signs that should serve as red flags for you?  Now is the time to learn more.  Too many older clients are among us to ignore the probability that some of them will be too impaired to do business safely.
Indicators of diminished capacity will not always be so obvious to you, particularly if you are interacting with a an aging client and you as a professional are doing most of the talking.  You are probably directing the conversation with that client If you have specific questions about a transaction, whether it involves a real estate matter, a legal transaction or case or accounting matter.  You could miss the signs that your client is beginning to develop cognitive problems.  If you are asking your client, “Do you understand?” and he says “yes” that is not a way to test whether he really did understand or not.  You will need to do more if any warning sign pops up when you interact with your client.

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Why You Need To Act When Your Client Has Serious Memory Problems

Why You Need To Act When Your Client Has Serious Memory Problems

Jun 17, 2016 | aging, diminished cognition, elderly, financial capacity

Have you ever found yourself in a situation with an older client who can't seem to remember anything anymore. You may have known the client over a number of years and feel responsible. But you are at a loss now. What are you supposed to do with this client? He's pleasant and just loves you. But you are worried.

You are pretty sure your client is experiencing a slow, but steady cognitive decline. He has a daughter in another state but maybe she isn't paying attention to what is going on. He has a son she's not close to, though he lives in the same area she does. You asked him once if he had someone to be his agent, his power of attorney. He hadn't gotten around to that yet.

No one acts. No one insists that your client choose a relative or friend and sign the Durable Power of Attorney document. He says he doesn't want to talk about it and you just back off and never mention it again. You suspect he may have Alzheimer's disease, from your experience with your own family member.

Here is what can happen to your client.

He steadily loses judgment about what is a good thing to spend money on or invest in; therefore, bad decisions happen. We have observed clients who were once financially comfortable start falling for obvious scams. They buy worthless coins or stamps or fly-by-night property investments that take their money and disappear. Perhaps no one knows because the elder is in the secrecy habit. Time passes and the client's cognitive ability declines even more. There is no stopping dementia caused by Alzheimer's disease.   The predators find an easy mark. As long as there is cash to spend or credit cards to run up, the elder keeps getting into deeper and deeper trouble. Unquestionably, financial decimation can result.

These situations are real. We have talked to the families of elders who have probably been impaired for years, hearing them say they wished someone had done something sooner. No one but the financial professional knew what the client had nor where his money was going. The family thought the elder's finances were fine. Now, with too much drained out by excessive giving, the family may well end up having to support their aging relative just at the time when extensive care is needed and the expense of it skyrockets.

How do you prevent the worst? By engaging in discussion with your client's family or appointed other early in your relationship. If you have an ongoing connection with that trusted person in your client's life, you stand a better chance of protecting her from dumb and destructive decisions if her mind starts to go, later on in life. Even if you can't imagine how a perfectly alert, intelligent person could get dementia, it happens to millions of people as they live longer. The risk rises with age.

If you have never had conversations with your older clients' families now is the time to start. You need to educate your client about the importance of having someone else named by her for you to reach out to if she gets sick or has an accident.

You need to develop the skill of conducting family meetings while each client is fully competent. Even if a client has a few memory lapses now it is not too late to have a meeting with family to figure out the path forward in case of trouble ahead. This is a "soft skill" every advisor needs. If you want to learn how to conduct a family meeting or get better at this, you can learn the techniques in an hour.

Putting these skills to work takes some practice. It is especially important to know what to do when a client's family is difficult, or there is a history of conflict among them. That's tricky and you will need some outside help. Get smarter about conducting successful family meetings in our new book, Succeed With Senior Clients: A Financial Advisor's Guide to Best Practices. There's a great chapter entitled "Your Client's Family: An Open Book or Pandora's Box?" Click HERE for your copy today!

The Art of Communication With Aging Clients

The Art of Communication With Aging Clients

Jun 17, 2016 | aging, aging investor, diminished cognition, elder investor, elderly, finances for elders, financial capacity, investor, senior investor, seniors finances

Have you ever had an older client who didn’t want anyone, not even family, to know what his assets were? Did you find this secrecy about money to be a problem with a few of these older folks? It’s not so rare.

Everyone is entitled to privacy, of course, and the rules mandate that you not share a person’s private financial information. But what if your client begins to decline in his health? What if he starts to appear as if he’s “losing it”? Then are you supposed to just let him make mistakes and feel constrained that you can’t call a family member or anyone about his health? It does seem that most advisors do nothing until things reach a crisis point.

As aging experts, we think things should be handled differently. When you open every client file, you are not required to get the name of someone to call in case of emergency or in case of need. That is precisely what needs to change. Let’s consider common sense. If people are living longer than ever, their chances of developing cognitive impairment are consequently greater. With impairment, people lose their financial judgment. If you have a client’s trusted contact in the file, you may need it. And you can’t wait until your client is really, obviously impaired. If you do, she probably won’t want to give you anything. That puts you in a bad position. Your client is vulnerable to big mistakes and even to financial abuse. You don’t know what to do. You can’t call anyone and you wouldn’t know who to call even if you could.

Here’s the sensible solution: get the names and contact information of two trusted others for your client when you open any file. And with existing clients, ask them for the contact for two trusted people in their lives at the next portfolio review. Do it across the board for every single client. That way, when any one of them goes on to develop cognitive impairment, or dementia or has a stroke or anything disabling, you are not caught flat.   And how do you ask that secretive client for the names and for permission to call when, in your judgment, the need arises? You start by making it your problem. You let the client know that it is now office policy. You politely insist and you get it done.

Not every single client will immediately cooperate. Some will need your patient persuasion and tact to coax them to do this. That is one of those “soft skills‘ you absolutely need with your older clients. A few may refuse your request and you can’t force it on them. But for most clients, the encouragement from you to look to the future may be considered part of your job.

Senior clients can pose a number of communication issues with you besides being secretive about finances. Hearing loss, vision limitations and mobility issues can all make conversation more difficult. What you need to know to hone your skills and keep on top of these challenges is all spelled out for you in our book, Succeed With Senior Clients, A Financial Advisor’s Guide to Best Practices. Check out the chapter, “Tough Talk: Communication Challenges With Aging Clients”. You’ll get those soft skills down in no time! Get your copy today by clicking HERE.