When Debt Collectors Come Calling After Death

Oct 18, 2012  /  By: Geoffrey H. Garrett, Estate Planning Attorney  /  Category: asset protection, Estate Planning, Financial Planning, Probate

It isn’t uncommon for people who have recently lost a spouse or close family member to be approached by a debt collector who is attempting to collect on the deceased person’s debt. Dealing with these debt collectors at such an emotionally difficult time is never pleasant, but there are some tips you can remember that will help make the process easier.

Tip 1: You are not responsible for someone else’s debt

Some debt collectors can be unscrupulous in their attempts to collect money. Even when a collector or creditor knows that the debt left behind by a deceased person is not the responsibility of other family members, that may not prevent the collector from trying to convince those family members to pay. Debt collectors can use tactics such as trying to persuade you that it is your moral responsibility to pay for the debt or by trying to pressure you to assume it. Never give in to these tactics. If you’re being pressured by debt collector to assume a debt you should demand they stop contacting you and refer them to the estate representative. If that doesn’t work, contact your attorney.

Tip 2: Joint debts are still your responsibility

It’s very common, especially for spouses, to have joint debts, such as joint credit card accounts. In this situation any debt left behind by a deceased person is still your responsibility if you entered into it as a joint debtor. However, not all debts that married couples have our joint debts, and you should never sign an agreement creditor since you asking you to assume a debt. Instead, review the original debt documentation and refer the matter to your attorney or the estate representative.

Byrd : Garrett, PLLC is a member of the American Academy of Estate Planning Attorneys.

Financial Traps Retirees Should Avoid

Oct 17, 2012  /  By: Geoffrey H. Garrett, Estate Planning Attorney  /  Category: Elder Law, Financial Planning

For retirees and those on a fixed income, financial planning is necessary to ensure you don’t run into financial problems. Because you’re retired, you cannot count on bringing more money in from work, so you’ll have to be doubly careful to avoid common financial pitfalls that can quickly get out of hand. Here are several of the most common.

Credit Card Bills

If you’ve used credit cards in the past and have maintained a balance from month to month, you’ll definitely want to stop this habit before you retire. A credit card balance, and its associated interest rates, will eat away at your retirement money without any good to show for it. If you need to get some credit card debt under control, you might want to find a personal loan with lower interest rates and focus on paying the loan off while not using the cards.

Reverse Mortgages

A reverse mortgage allows you to use the equity in your home to get an additional monthly income or a lump sum payment while agreeing to pay off the loan when you die. You need to carefully consider the various fees and other factors involved in a reverse mortgage before you agree to take one, though they can be worth it for some people.

Reverse Pension Plans

While reverse mortgages are sometimes a good idea, reverse pension plans are always a scam. If anyone offers you a reverse pension plan or reverse retirement plan, you need to walk away immediately.

Byrd : Garrett, PLLC is a member of the American Academy of Estate Planning Attorneys.

Marriage, Divorce, Estate Plans, and Prenuptial Agreements

Oct 17, 2012  /  By: Geoffrey H. Garrett, Estate Planning Attorney  /  Category: Estate Planning, Financial Planning, parents with young children, Retirement Planning

The numbers behind divorce statistics, though improving over the last 10 years or so, paint a somewhat bleak picture. Between about 45 and 50 percent of first marriages end in divorce, while second and subsequent marriages survive less than 40 percent of the time. With all these marriages breaking up, anyone creating an estate plan should give serious thought to including a premarital agreement, also known as a prenuptial agreement or ante-nuptial agreement, in your efforts. Here’s why:

Reason 1: You Want to clearly divide your property in order to create an estate plan.

With a prenuptial agreement, both spouses can specify what property they will each receive in the event of a divorce. This will greatly aid your ability to create a retirement or estate plan that will not have to be significantly changed should you divorce. Through the prenup you can direct who will keep property the couple currently owns, property the couple acquires during the marriage, as well as property either of you owned before getting married.

Reason 2: You want to ensure your children receive a good inheritance even if you don’t divorce.

Let’s be optimistic and assume your marriage will last. Even if you never get divorced, a prenuptial agreement can ensure you have enough property to leave your children a healthy inheritance. If, for example, you or your spouse have children from previous marriages, both of you can choose to waive your right to receive a spousal inheritance. Spousal inheritance laws exist in all states and give spouses the right to inherit a share of a deceased spouse’s estate. Depending on the state in which you live, this can be as much as 50 percent. Through a prenup you can choose to waive this right so each of you can leave your property to your children or to those you select.

Byrd : Garrett, PLLC is a member of the American Academy of Estate Planning Attorneys.

Elder Care Documents For Medical Emergencies

Oct 15, 2012  /  By: Geoffrey H. Garrett, Estate Planning Attorney  /  Category: Financial Planning, Powers of Attorney

As we get older, the likelihood that we’ll need medical care or need to be treated for a medical emergency rises dramatically. All elderly people need to be ready for this possibility by taking the time to prepare some specific legal documents which can come in handy in times of medical emergencies. Here are three of the most important.

Healthcare Proxy

Through a healthcare proxy, also known as a healthcare power of attorney, an elderly person gives someone else the ability to make medical decisions when the elderly person is incapacitated. For example, an elderly parent can make a healthcare proxy which names the parent’s adult child as the person doctors can speak to for medical decisions after an accident which leaves the parent unconscious or unable to express decisions.

Advance Medical Directive

You can also make a medical directive, commonly called a Living Will, so you can set down in writing what medical care you want, or don’t want, to  receive. A Living Will is often used in conjunction with a healthcare proxy so the person you name as proxy will have guidance when making medical decisions.

Financial Power of Attorney

If you are ever incapacitated, someone will also have to look out after your financial affairs. You can designate someone to do this through a financial power of attorney. Similar to a healthcare power of attorney, the financial power conveys the legal ability to make decisions so you can be sure your finances are managed if you can no longer do so yourself.

Byrd : Garrett, PLLC is a member of the American Academy of Estate Planning Attorneys.

Make Retirement Easier With Part-Time Work

Sep 06, 2012  /  By: Geoffrey H. Garrett, Estate Planning Attorney  /  Category: Financial Planning

Many of the 10,000 baby boomers will reach retirement age every day find that retired life is not everything they had hoped it would be. Some are not financially comfortable and need added income to make things a little easier. Others find that suddenly being at home every day with nowhere to go is incredibly stressful. If you are in either situation, you may be able to find part-time work that can help ease your way into retirement. Here are a couple of options you might want to consider.

Part-time seasonal work

One of the easiest ways to find part-time employment is to begin looking just before the holiday season begins. Most retailers do the majority of their business during the holiday season and they typically require additional staff at this time. Though these positions only last for a couple of months, you can use them to both earn additional income and help you decide if retail work is something you enjoy.

Bargain shopping

If you have extensive knowledge about specific products such as collectibles, sports memorabilia, furniture, or even automobiles, you may be able to turn that into a profitable side business. If you can find a good bargain that you know you can sell elsewhere at a profit, there’s nothing to stop you from doing this as a part-time job. You can try to find items at local auctions, yard sales, through classified advertisements, as well as through Internet sites such as Craigslist or eBay.

Byrd : Garrett, PLLC is a member of the American Academy of Estate Planning Attorneys.

Senior Debt and Bankruptcy Growing

Aug 08, 2012  /  By: Geoffrey H. Garrett, Estate Planning Attorney  /  Category: Estate Planning, Financial Planning

The confluence of the economic downturn, rising medical costs, and increasing debt pressures have led more seniors than ever to file for personal bankruptcy. According to the American Association of Retired People, the number of people age 65 and older who filed for retirement between 1991 and 2007 increased by 150 percent, while bankruptcies filed by Americans between the ages of 75 and 84 increased by 433 percent in that same time period.

The financial pressures many elderly people face are because of household and consumer debt. More and more people are entering into retirement age while still carrying a mortgage or significant amounts of credit card debt. According to a study recently released by the Employee Benefit Research Institute, the average household headed by someone age 55 and older has about $70,000 in debt. This represents a doubling of the amount of debt from 1991 to 2007.

The same households are also increasing the amount of credit card debt they have. In 2005, the average American age 65 and older had just over $8,100 in credit card debt. By 2008 that figure had grown to over $10,200.

Additionally, more seniors are having to pay back student loans that either they themselves acquire or were acquired by their children. With the economic downturn fewer people were able to find employment, and as many senior parents signed on as cosigners for their college-age children, they quickly found themselves having to pay back student loans because those same children were unable to find employment.

Byrd : Garrett, PLLC is a member of the American Academy of Estate Planning Attorneys.

Protecting Yourself From Gold-Diggers

Jul 12, 2012  /  By: Geoffrey H. Garrett, Estate Planning Attorney  /  Category: asset protection, Estate Planning, Financial Planning

For a single elderly person, the prospect of the new romantic relationship can be incredibly exciting and comforting. However, there is often danger in these relationships, especially when you have a significantly higher amount of assets than your new partner, or if the new partner is significantly younger than you. If you’re worried about protecting yourself from a gold digger, consider these two options as possible protections.

Powers of Attorney

As much as we don’t like to think about it, there will come a time when you may lose your ability to make wise financial choices. Even if you never develop a medical condition such as dementia or Alzheimer’s disease, cognitive decline is common as we get older. At some point, you may want to transfer your financial decision-making abilities to someone else through a financial power of attorney. With this document you can choose whomever you want to manage your finances on your behalf. This way, you will be less able to cause financial damage to yourself, if you enter into a new romantic relationship.

Prenuptial Agreements

If the relationship has progressed and there is now talk of marriage, it’s always in your best interest to use a prenuptial agreement, also known as pre-marital agreement. These contracts can protect both you and your would-be spouse by clearly defining what would happen in the event you would divorce. You can also protect your children’s inheritances by having your new wife waive a spousal inheritance right, or at least a portion of it.

Byrd : Garrett, PLLC is a member of the American Academy of Estate Planning Attorneys.

You May Not Get an Inheritance

Jul 11, 2012  /  By: Geoffrey H. Garrett, Estate Planning Attorney  /  Category: Financial Planning, Inheritance Planning

According to recently released survey data, Americans expecting to receive an inheritance from their wealthy parents may be in for a bit of bad luck. The recently released study conducted by Bank of America’s private wealth management division, U.S. Trust, reports that 32% of parents of high and ultra-high net worth say that it isn’t important to them to leave an inheritance to their children. Of the baby boomers surveyed, 45% of them say the same.

The most often cited reason for the desire not to leave money to children was that the parents stated they believed each generation should be able to earn their own wealth. Others stated that they would rather use their money to donate to charities or to help solve various social problems.

About 25% of those surveyed said they would prefer to give their wealth to a charitable organization, while another 25% said they wanted to use the money themselves to enjoy life. A very small percentage, 7%, said they probably wouldn’t have any money left over to leave to either charity or their families.

Others surveyed stated that though they planned on leaving an inheritance to their children, they did not plan on leaving their entire estates to them. Many of these respondents stated that they did not inform their children how much money they have because they believed that doing so would negatively impact the child’s work ethic.

Byrd : Garrett, PLLC is a member of the American Academy of Estate Planning Attorneys.

Elderly Increasingly Victimized by Financial Abuse

Jul 06, 2012  /  By: Geoffrey H. Garrett, Estate Planning Attorney  /  Category: Elder Law, Financial Planning

According to a recent survey conducted by a Washington-based nonprofit financial education organization, professionals who work in finance and with elderly Americans are becoming increasingly concerned that financial elder abuse is a significant problem.

The Investor Protection Trust recently surveyed 762 workers in various fields, such as state securities regulators, social workers, and medical professionals. Of those surveyed, 58% of them say they deal with financial exploitation of the elderly either somewhat often or quite often. A large majority, 70%, say that they believe the problem of financial elder abuse is very serious.

The survey results released early in June bolster previous survey data the organization released in 2010. At that time, survey results showed that about 7.3 million Americans age 65 and older, about 20% of the senior population, reported that they had already been subjected to financial abuse of at least one type. This includes outright financial frauds or cons, higher fees for financial services, as well as inappropriate or misleading investment advice.

The 2010 survey results also showed that about half of all senior citizens have shown at least one significant warning sign that could lead to potential or current financial victimization. Warning signs include not being confident in being able to understand financial choices, giving more loans than the elderly person can afford, or being subjected to repeated inquiries for money lending, lotteries, or other financial scams.

Byrd : Garrett, PLLC is a member of the American Academy of Estate Planning Attorneys.

Washington State Creditor’s Claims Procedures for Insolvent Estates: Part 3 of 3

Feb 03, 2012  /  By: Geoffrey H. Garrett, Estate Planning Attorney  /  Category: asset protection, Estate Planning, Financial Planning, Probate

Continuing the three-part blog series covering Washington State’s law allowing personal representatives and executors to expedite the allowable statutory limitations period in which creditors can file claims against a decedent’s estate, this final blog covers the mechanics of the Washington State Creditor’s Claims Law.

The Washington Legislature passed the Creditor’s Claims Law that allows creditors to receive their debts within a relatively short period thereby allowing heirs to receive their inheritances quicker. Without the statutory provision, creditors would have 24 months to make their claims for unpaid debts after a decedent’s death. With the statutory provision, creditors have only four months to claim their debts after the estate publishes a Probate Notice to Creditors in a local newspaper of general circulation. Whereas before the state passed this statute, heirs had to wait at least 24 months to receive their inheritances, they are only required to wait four months after the state passed this statute. Creditors have up to four months to perfect or make their claims for unpaid debts against estates.

You can contact our office to schedule an appointment to discuss your estate planning options and potential claims from creditors. We can help you determine if you can take advantage of the Washington State Creditor’s Claims Law.

Byrd : Garrett, PLLC is a member of the American Academy of Estate Planning Attorneys.