Wednesday, December 10, 2014

Seniors Living Alone are at Risk

I recently heard about something very scary in relation to an 80 year old man living alone. A couple knocked on the door saying they were friends of a neighbor and wanted to come in and see his antiques. Once inside they scoured the home for valuables. They questioned the man about what was going to happen to his antiques and other possessions once he died, which is totally inappropriate. They kept asking probing questions about how much the antiques were worth, where do the family members live and who is he leaving these to in his will. After he finally got them to leave, he called the neighbor and asked if she knew them and she said she wasn't sure, but their name seemed familiar.

The next day, the man received a call from someone claiming to be his granddaughter who wanted money of course. The man realized it was a scam and hung up, since he didn't have any granddaughters.

There are several things to be aware of here. One is that those people could have knocked this elderly man in the head and taken whatever they wanted, or worse killed him. He should have never let them inside since he didn't know them.

Second, they could be setting him up for a break-in later, now that they know the layout of the home. They could be watching his house looking for him to leave and swoop in and steal whatever they wanted.

Further, these scammers could easily find out who lives in the neighborhood and pick out an equally elderly neighbor that they might rely on for a faint memory. They simply act as if they know the neighbor when in fact they just "googled" the neighbor and got their name figuring the elderly man would know the close neighbor. In reality, the neighbor doesn't know them at all.

Finally, they could be in cahoots with the supposed granddaughter who called the next day. The fact that this call was the very next day after this couple's visit was pretty suspicious.

It is hard to believe that there are people like this who prey on the elderly, but sadly there are way too many of them. If you have elderly family of friends, then make sure you check on them often and report any suspicious activity to the police.

Monday, December 8, 2014

Just Like I Wrote It

The other day, I went into one of the major banks where I had opened an estate account for a client who passed away. We took care of everything for the client and their beneficiaries and I needed to close the account. I had originally considered opening this account with Schwab, but their review process would have taken three weeks and we needed to close on some real estate sooner than that, so I was forced to go to one of the major banks.

Just so happens, we have some personal accounts at this bank and when I sat down to close the account, the lady tried to sell me everything under the sun. This major bank doesn't do personal loans any more, but they will gladly give you a credit card. She tried to get me to open a credit card account.

I said "No thanks."

Then she tried to get me to take cash out of one of my credit card accounts.

"Why the hell do I want to run up my credit card bill?", I thought to myself.

I said "No thanks."

Then, she tried to get me to refinance my home equity loan for about 1.5% higher than my current rate.

Again, I said "No thanks."

Then, she tried to get me to refinance my home loan which was about 1% higher than my current rate.

"No!", I said.

She finally gave up and closed the account after wasting about 10 minutes of my time. She could tell I was getting perturbed.

This is the typical experience at a major bank today. I hate the damn bank and everything it represents. I would not even have the credit card at this bank if it wasn't for the bank buying my former credit card company. I never even opened the credit card with this bank. They just forced me into their devilish den. I may have to move that credit card account now after that fiasco.

While she was giving me this sales pitch, I couldn't help but notice an older man in the back office with a young stockbroker from a major brokerage firm that just so happens to be owned by the bank. Imagine that. This poor man was around 70 years old and he was doing business in the absolute worst place possible.

Hadn't he read my book? Of course he hasn't. Otherwise, he would have never set foot in that guy's office.

Doesn't he know that these stockbroker's are in business to generate the most revenue possible from him?

Why on earth would you ever do business with a bank owned brokerage firm?

It is so asinine. I am sure that if I reviewed this guy's investment statements, I would see variable annuities, loaded mutual funds, non-publicly traded REIT's and UIT's. Why? Because these are the products that make the bank the most money!

If you do your investment business with a bank or a bank owned brokerage firm, then STOP IT!!! They are ripping you off. For proof, all you have to do is look at your own statements. If you own variable annuities, loaded mutual funds, non-publicly traded REIT's and UIT's, then congratulations you been had. I'm sorry to be so blunt, but you need to wise up and quit letting these people rip you off.

When I went into this bank to close it out, I knew what to expect. I knew they would try and sell me everything under the sun. The poor old man was getting his head taken off in commissions and lack of liquidity and for what? I will tell you for what. The profits of the bank. They don't give a flying you know what about their clients. I don't care what line of BS you hear or what frilly commercials you see on television. They are in business to make as much money as they can off of you. Don't you ever forget it.

The only place to do your investment business is with an Independent Registered Investment Adviser who is not affiliated with a bank, brokerage firm or insurance company.

Of course, when little unknown guys like me write books, it is so hard to get any traction on book sales unless you are somebody famous. In my opinion, if a book does something to help you, then it doesn't make a hill of beans who wrote it. What may surprise people to know is that my book, "Meet Wally Street. The Reason You're Stupid." would have warned the 70 year old gentlemen never to do business with a bank owned brokerage firm period. In other words, it would have helped him!

I described this exact scenario to watch out for in my book. This is how it always is with me. I will write about something and read about other people's horror stories describing it later. Except in this case, I saw it with my own two eyes. It was sad to see let me tell you. I feel sorry for that elderly gentleman.

If you want a Christmas gift idea, then give people my book. You will save them a lot of money and headaches. It is only $3.99 on electronic devices and only $19.99 if you are old fashioned and want a real book. That's a bargain compared to the money that you will save them.

Merry Christmas to you and yours.

Tuesday, September 30, 2014

What's Your Viewpoint?

The other day, I was thinking about something that has never happened to me personally. I have never been fired from a job in my life. Going all the way back to my first job slopping food at the local hospital through today. What struck me about it was the fact that I have no idea what it is like to be fired. I have been on the other side of the table however. I have been the one doing the firing. In fact, over my lifetime, I have fired several people. Of course, I am sure that I was the villain in each of the firings from the point of view of the person being fired. However, they would be wrong, because I never fired anyone who did not deserve to be fired. Most of the time, it boiled down to two or three issues.

  1. They failed to show up for work regularly;
  2. They failed to come anywhere near their performance metrics; or
  3. They were stealing something from the company.
Of course, there are those people who are victims of corporate downsizing, too. I have never been involved in one of those personally, but know people who have been subject to it. In fact, quit a few people that I know have been downsized. Some have a hard time with it and others accept it and move on.

For what it is worth, I wanted to give some advice on this subject of being fired or laid off. If you believe in God, then you have heard the quote from the Bible that "God has a plan for you". Forgive me for paraphrasing. The burning question is do you believe this? I mean do you really believe this?

If you were fired or laid off and if you immediately get mad, blame others, refuse to accept any responsibility for it, then you do not believe that God has a plan for you. It is a question of faith. You lack faith. There is no disputing it either.

On the other hand, if you look at it as part of God's plan for you, then you will realize that there are other things that you are meant to do. If so, then why spend another day at that old job? If your faith lends you to believe in God's plan for you, then you will never get mad, blame others, nor refuse to accept responsibility for your actions. Instead, you will rejoice at the new opportunity in front of you.

There are really just two ways to handle being fired or laid off. Dwell in the house of despair and dysfunction or look forward to great things.

Wednesday, September 24, 2014

Legal Zoom Effect

Did Legal Zoom replace estate planning attorneys? Not hardly, but they did make life difficult for them. I can remember about 10 years ago when attorneys were getting as much as $5,000 for a revocable living trust with all the ancillary documents. Today, I think most attorneys will charge somewhere in the $1,000 to $2,000 range for the same services. A lot of attorneys will not waste their time for anything less than $1,000. It is simply not worth it to them. Legal Zoom had a fee compression effect on attorneys' fees.

I have a story in my book, Meet Wally Street, The Reason You're Stupid about people who use online legal document preparation firms. What most people do not think about when they use these online legal document preparation firms is that all they are doing is part of the equation. Yes, they are creating the documents at a discounted price from most attorneys, but they are failing to consider a lot of factors in their decision. One of those being...

Is this going to work?

How do you know the documents that you created online are going to work in your state and county? You can never be sure until you actually try and use them in a legal situation. I cannot tell you how many times that I have seen people prepare legal documents via some online legal document preparation firm and fail to dot an "i" or cross a "t". Most all of the mistakes that I see are in two main areas.

1) They fail to give the trustee the right powers; and
2) They fail to update their legal documents due to their death or disability of their trustees, successor trustees or beneficiaries.

Let me give you an example to ponder as to why you should always use an estate planning and an elder law attorney to draft and update your legal documents. This is an example of a lady who only had a will that she created online and never updated it.

In this example, an elderly man's unmarried adult daughter passes away with only a will that she created online. Her beneficiaries included her elderly father in addition to her two siblings. At the time the will was written, the elderly father was in good health. Fast forward a few years and the adult daughter gets ill with cancer and eventually succumbs to it and dies. While she was dying of cancer, her elderly father goes into a nursing home with dementia. The elderly father had a will leaving everything to his three children one of which just passed away. Now what?

Well, since the elderly father is now not legally competent and he doesn't have someone appointed by the court to handle his affairs, then someone has to go hire an attorney for him to obtain his share of his adult daughters estate which will have to go this route to get back to the two living siblings. Since the elderly father is in the nursing home with dementia, he is burning through all of his cash and runs out of all his cash. He didn't believe in Long Term Care Insurance. He sure could use the proceeds from his adult daughter's estate to help pay his nursing home costs, but unfortunately he has to have a legal guardian or conservator appointed first.

Meanwhile, while that is going on, the elderly father suddenly passes away. So, now the money from the adult daughter cannot be paid until her elderly father's estate goes through the probate process. The nursing home had to advise the family that they needed an attorney to get him qualified for Medicaid towards the end of his life. Nursing homes cost around $6,000 to $7,000 per month. If Medicaid pays it, then they want their money back when they can get it. In this case, Medicaid wanted their share of the proceeds of the adult daughter's estate! You see the elderly father ran out of funds while he was in the nursing home and had to go on Medicaid for about a year.

Now, the other siblings who thought they were the beneficiaries of their sister's and their elderly father's estates are going to get nothing from their father's estate. It is all going to pay back Medicaid and the probate attorney who had to step in and clean up this mess. Plus, they had to use some of the money that they inherited from their sister to pay for the attorney for their dad's guardianship, then later his estate and his burial, too. He didn't believe in life insurance either.

The moral of this story is that there are several things that could have happened to preserve family assets. The adult daughter could have hired an attorney to update her legal documents with a revocable living trust and keep them updated. In that document, it would have provided for contingencies. Anytime someone gets a serious illness, then those legal documents should be reviewed immediately. In addition, an elder law attorney could have saved most of the elderly father's estate with proper planning in advance. Further, the money from the sister's estate could have bypassed her elderly father's estate entirely once he went into the nursing home and gone directly to the two remaining siblings instead. However, one-third of their sister's estate which should have ended up with the two surviving siblings was gone like the wind to Medicaid.

Like I say in my book, estate planning and elder law attorneys are worth every single cent you pay them. The same cannot be said for doing your legal documents online and never updating them.

Do you realize that I may have just saved your family tens if not hundreds of thousands of dollars by telling you this? And, you thought that I was just another financial advisor.