You may have seen the commercials. Medicare fraud costs the taxpayers billions of dollars every year, and the government is working to crack down on fraud.

A recent New York Times article gave highlights from some of the more outrageous and costly Medicare scams: a crime syndicate engaged in identity theft billed the government for more than $100 million in services supposedly rendered by over 100 bogus health clinics; and a chain of mental health clinics claiming $200 million in group therapy sessions that authorities say were either unnecessary or never provided.

But, frauds like these are perpetrated by ambitious criminals.

A senior citizen is more likely to fall victim to some unscrupulous individual collecting Medicare numbers by offering free medical screenings or trying to sell them unnecessary or not-covered medical supplies that they will never receive. Instead, the scammer bills the government under the patient’s Medicare number and pockets the reimbursement.

Preventing Medicare fraud is a lot like preventing identity theft.

Just as you protect your bank account and credit card numbers, you need to protect your Medicare card – or “Guard Your Card” as the fraud-prevention campaign goes. This means carefully reviewing your credit report and your Medicare statements for suspicious activity.

Your statements are available at MyMedicare.gov. You only need to set up a log-in ID and password for the secure website. Seniors who are not web savvy may need help in this area, and only they can authorize their children or caretakers to assist them with this.

Also, beware of freebies. Anyone offering free services does not need your Medicare card number, nor do they need your Social Security Number. If you mysteriously receive free medical supplies or services, report it to Medicare immediately.

Scammers are likely out in force around this time of year because, beginning Nov. 15, Medicare recipients can enroll in Medicare or change their plans. There will be a lot of fake plans out there, so be sure to check the plan finder under Medicare.gov.

If you suspect Medicare fraud, report it immediately by calling 1-800-HHS-TIPS (1-800-447-8477) or email HHSTips@hhs.gov.

James D. Perry

Open the newspaper and on any given day you can find a cautionary tale of an elderly person losing thousands of dollars to his or her caretaker, a scam artist, or some final friend.

The sad fact is that the elderly make easy targets of financial abuse, and you may be their first line of defense against scammers. If you have a parent over the age of 70, you should have a conversation with him or her about what would happen if they could no longer manage money.

Approach your parent respectfully, asking permission to talk about the subject. Your parent is likely to feel vulnerable – relinquishing money means relinquishing control.

You’ll want your parent to sign a durable power of attorney. And, if your parent is already showing signs of mental impairment, you need to act fast. A durable power of attorney must be signed and notarized while your parent is still competent.

If possible, you should include the whole family in the conversation and decision-making. Put all agreements in writing so that there is no argument or second-guessing.

If you already are in charge of your parent’s bank accounts, try not to micromanage. If possible, keep just enough for monthly expenses in a joint checking account and protect the rest in another account. Pay the bills together or help your parent set up automatic bill-pay to prevent forgotten bills.

The change in power can be a tough, emotional transition, but you don’t want to put off protecting your loved ones.

James D. Perry

My Dad was a guy who loved is family and took care of little things behind the scenes to make his kids lives a bit easier. One of those things was to prepay a cremation of his body and interment of his ashes at plots that he and my mother purchased years ago at Rose Hills.

When he died, his preplanning saved me many hours of decision-making and legwork. The only downside, if there was one, is that I get periodic calls from my Rose Hills representative urging me to prepay my own plan.

Paying in advance combines pre-planning with pre-funding, which makes it an attractive estate planning mechanism. Often, prepaid burial plans are a tool used to “spend down” excess funds to qualify a client for MediCal Long Term Care benefits.

There are primarily three ways to pre-pay for a funeral: insurance, trusts, and individual funding.

An individual may buy a whole-life insurance policy to cover the costs when needed, or money may be put into a trust run by a financial institution or statewide funeral directors association.

Individual funding may be done through so-called guaranteed and non-guaranteed plans. Under a guaranteed plan, a funeral home promises that if you pay today, it will provide services to you when needed no matter how much prices rise. Many of them exempt other costs, such as flowers and music, though, and changes to the plan potentially void the price guarantee. A non-guaranteed plan offers no such price protections.

Whatever route you might choose to take in pre-paying your funeral, though, be aware of the risks.

Revoking a prepaid plan is not easy. California imposes up to a 10% fee on prepayments in trust. And, canceling an insurance policy entitles you to receive only the cash value of the policy – not necessarily the value of premiums paid – minus commissions and costs.

Also, there are widespread allegations of fraud and mismanagement within the industry. State and federal legislators are working to curb abuses through regulation and disclosure requirements, but consumer protections for those caught in a scam are still not strong.

Some consider it sound financial planning – a hedge against inflation locking in today’s prices in an industry where prices continue increasing. Others simply wish to spare their loved ones the trouble of picking out caskets, buying burial plots, and making other arrangements during their grieving.

As with any investment, diligent scrutiny and seeking legal and financial advice where needed are key to ensuring your money and your loved ones are protected.

James D. Perry

I blogged a few months ago about the change in California law that permits probate courts to rule in on the validity of a statement in your will that threatens to disinherit any person who files a lawsuit contesting the validity of your will.

Under current law, the courts will allow good faith challenges that allege some sort of wrong-doing in the creation of the will, including an allegation that the testator was under some undue influence in writing out the terms of his estate distribution.

So what is undue influence? One example was in the infamous Marshall v. Marshall battle where Anna Nicole Smith alleged that her late husband’s son engaged in malicious and willful behavior to prevent his father from leaving Anna Nicole a substantial gift in his will.

Many times the elderly are easy targets for manipulation and unscrupulous individuals, often family members, who try to manipulate them into signing a last will and testament to their advantage.

The court will look at all the circumstances to determine whether an individual asserted undue influence and it may void a gift under a will.

The court may look at the relationship between the donee and the testator (drafter of the will). Why is this person getting the money? Is the donee a family member or a normally expected heir?

The court may also look to the level of involvement in the donor’s affairs or the involvement in the gift itself. The greater involvement, the less questionable it might be that the person would inherit. For example if the donee drove the testator to the attorney’s office, sat in on the meeting with the attorney, and paid the attorney fee, the court would presume that the testator was subjected to undue influence.

It’s also worth noting the circumstances under which the property was promised in the will, such as if and when the will was changed from a longstanding estate plan, and whether the change was made in secret or if the testator’s intentions were shared with others. Also, what was the physical and mental state of the testator at the time the will was written or changed?

These aren’t exclusive factors in determining whether there was undue influence or not, but they are questions worth asking in the interests of protecting yourself and your loved ones.

On a final note, there is no law against asking someone to leave you something in a will. You and your sister might both ask your 96-year-old grandma to leave you her 5-karat Harry Winston diamond ring. But if your grandma is in a fragile mental or physical state, and you lie to her and tell her that your sister is a drug addict who will surely pawn any jewelry for cash – that’s undue influence. You usually know it when you see it…it doesn’t pass the smell test.

James D. Perry

In yet another development in the sensational saga spanning 15 years, a court of appeals recently ruled that none of J. Howard Marshall’s billions will go to the estate of his late-in-life bride, Anna Nicole Smith.

The former Playboy model challenged her late husband’s will in a Houston probate court alleging that his son, E. Pierce Marshall, had illegally coerced his father to exclude her. She claimed that Howard had promised to leave her more than $300 million.

The court found, though, that Howard was mentally fit and under no undue pressure when he wrote the will that left nothing to Anna Nicole.

The two met in a strip club and were married in 1994, Howard at the age of 89 and Anna Nicole, 26. Howard died a mere 14 months later and in his will left nearly all of his $1.6 billion estate to Pierce.

Since the legal battle began, both Pierce and Anna Nicole have died leaving their respective estates to duke it out in court. Pierce is succeeded in the litigation by his heirs, a wife and two sons, and Smith left a daughter, now 3, fathered by an ex-boyfriend.

The case has already bounced around both state and federal courts in bankruptcy and probate, and has been through numerous appeals, even getting a day in the U.S. Supreme Court on a question of jurisdiction.

Unsatisfied, though, Anna Nicole’s probate lawyer is already planning to appeal the latest ruling.

James D. Perry

Stories in the news this month have really highlighted the need we have in this country to truly care for our elderly family members and friends, protecting them from exploitation.

Brooke Astor’s son, Anthony Marshall was sentenced this month to as many as three years in prison for swindling millions of dollars from his mother, who suffered from Alzheimer’s disease. And, a Long Island woman was convicted just recently of stealing the home of a 93-year-old retired barber.

MetLife’s Mature Market Institute estimates that financial scams cost the elderly about $2.6 billion a year. Only one in 25 cases of financial abuse is ever reported.

Many people are quick to point to reverse mortgage lenders as the greedy, moustache-twirling villains of financial abuse. Reverse mortgages are loans against the equity in your home that you do not have to pay back until you voluntarily move or sell your home or until you die.

They are ripe for abuse because aggressive ad pitches often involve coercion and deception promising “free money” and failing to disclose fees and terms of the loan, similar to problems raised during the flood of subprime mortgage rate loans into the market that created the housing boom and subsequent collapse.

However, financial abuse can often come from closer to home. Lisa Nerenberg, an elder abuse consultant recently told the Los Angeles Times that the chief perpetrators of financial elder abuse are family members. MetLife puts the percentage of substantiated cases of financial abuse involving an adult child around 60 percent.

As a senior citizen, you can help protect your assets by assigning them into trusts and by choosing a trust-worthy individual to have power of attorney or to serve as a fiduciary. Others can help prevent financial elder abuse by simply opening up a dialogue with their loved ones about finances and keeping an eye out for scams.

James D. Perry

Brooke Astor was a New York philanthropist and socialite who married into the wealthy Astor family. She died at the age of 105 in August 2007 with a $200 million fortune.

In the year before she died, a battle was raging in the courts as friends and family members attempted to have her only son, Anthony Marshall, removed from his position of guardianship over her on suspicion of elder abuse. Their reasons included allegations of financial fraud and medical neglect.

Just a few months ago, Marshall – himself now 85 years old – was convicted on 14 of 16 charges against him in his scheme to steal millions from his mother, including grand larceny and forging Astor’s signature on an amendment to her will.

You don’t need money to be a victim of elder abuse, though. Elder abuse includes financial, physical, and emotional abuse or neglect.

There are a great number of consumer scams and unscrupulous individuals (some in your own family) who are willing to take advantage of the elderly.

Last week I spent about 2 hours dealing with my 94 year old father’s bank because one of the sham mail order “charity” sweepstakes he entered used his $4 check to create phony checks and wrote one against his account for $300. I got them to reverse the charges, but they demanded that the account be closed.

To protect your finances, you should watch out for fake charities; ask to see a business permit from door-to-door solicitors; be wary of get-rich-quick investment schemes; and check references of repairmen and contractors.

Also, be extra careful in selecting people (including family members) for power of attorney, trustee status, or other access to your finances.

If you suspect elder abuse, or are a victim of elder abuse, don’t be afraid to report it to your local Adult Protective Services agency or the California Attorney General’s Elder and Dependent Adult Abuse Hotline (1-888-436-3600). If the abuse is occurring in a licensed long-term care facility, report it confidentially to your local Ombudsman (1-800-231-4024).

James D. Perry

Richard Pryor’s widow, Jennifer Lee, and one of his daughters, Elizabeth, have been warring in the courts over his estate since 2005.

Pryor was a well-known comedian and actor. He was married seven times to five different women. He and Jennifer married for the first time in 1981 and divorced in 1982. They married again in secret in 2001.

In the mid-1980s, he was diagnosed with multiple sclerosis. Towards the end of his life, Jennifer became his primary caretaker. Pryor died in 2005.

His daughter Elizabeth did not learn of Pryor’s remarriage until sometime after her father’s death. Elizabeth first tried to petition for annulment of Pryor’s marriage, alleging fraud and undue influence.

If she had been successful in getting the court to void the marriage, she may have succeeded in barring Jennifer’s claim to Pryor’s estate under the California law that prohibits caretakers from becoming beneficiaries.

The law exists to prevent caretakers from exercising undue influence over their elderly and infirm clients to gain access to their fortunes.

This case breaks new ground because of the issue of the fact Pryor was married, but that the marriage was not public, thereby making it impossible for anyone to know of or challenge the marriage as a product of undue influence or incapacity on the part of Pryor.

The court has now said that it’s too late to challenge a marriage after death. This looks like a road map to ripping off the elderly or infirm – just marry them in secret and keep it quiet until after they are dead.

James D. Perry

My sisters and I celebrated my Dad’s 94th birthday last week.  Although he has lost a few steps, my Dad is still living with his wife in his own home with a  daytime caregiver. 

Last year he had to give up driving, which meant he could no longer deliver Meals-on-Wheels, take day old bread to the homeless shelter, and other volunteer activities that took him out of the house and into the community.   He is mostly house bound now, but still wants to contribute to causes and charities he believes in. 

Like many of my elderly clients, Dad  has often been sucked into direct mail scams and telephone sales scams.  Thinking he will have a great deal more money to send to his charities, he sends the money or unwittingly gives his authorization to his bank to debit his account in response to mail order sweepstakes offers and other promises of riches or worthy causes. 

In recent years, lottery crooks and others have added a new weapon in their rip-off arsenal: They send checks — fake, of course — as advance payments on purported winnings to come. Unsuspecting victims are guided to deposit the seemingly real check and then to wire most of the money to scammers as soon as it shows up in their accounts. When the counterfeit check actually bounces some days later, the victim is on the hook for the money — and often bank fees as well.

In my father’s case, and some of my clients, considerable money is lost before the accounts are closed or payments are stopped.

On this subject, I recommend to you a supurb article in the June 17th Wall Street Journal by Karen Blumethal, “A Family’s Fight to Save and Elder from Scammers”.   I urge anyone with an elderl parent or relative to read this article and do what you can to help.

Noted in the article are several strategies to stop the scammers:

  Sign up cell phones and land lines with Do Not Call Registry
 
  Put a short script by the phone for answering telemarketers such as
  “I’m very busy, I can’t talk now, thank you for your call.”

  Change the victim’s phone number. Consider having mail sent to
  a P.O. Box or other address where so that someone looking out
  for the victim can screen for scams

  Help the victim find activites to fill the time spent  talking to scammers
  and opening mail.

All of these are worth a try…but I’m still the son and he the father.  I try keep his checking account balance pretty small, but taking his phone number away and trumping his selection of worthy causes is tougher love than I have been capable of so far.  

James D. Perry