How is Congress Trying to Protect Seniors from AI Scams?

Senator Mike Braun, R-Ind., the ranking Republican on the Senate Special Committee on Aging, led a bipartisan effort to draft a letter to the Federal Trade Commission (FTC) that asks for an update on what the agency knows about AI-driven scams against the elderly and what it is doing to protect people. The letter, signed by every member of the Senate committee from both parties, asks about AI-powered technology that can be used to replicate people’s voices.

Fox News’ recent article entitled, “AI ‘voice clone’ scams increasingly hitting elderly Americans, senators warn,” reports that the letter to FTC Chairwoman Lina Khan cautioned that voice clones and chatbots are allowing scammers to trick the elderly into making them believe they are talking to a relative or close friend, which leaves them vulnerable to theft.

“In one case, a scammer used this approach to convince an older couple that the scammer was their grandson in desperate need of money to make bail, and the couple almost lost $9,400 before a bank official alerted them to the potential fraud,” the Senate letter said. “Similarly, in Arizona, a scammer posing as a kidnapper used voice-cloning technology to duplicate the sounds of a mother’s crying daughter and demand ransom.”

Senator Braun said “imposter” scams lead to about $2.6 billion in losses every year and that the elderly are especially at risk now that scammers have access to voice-clone technology.

“We’re getting calls into our constituent services line back in Indiana already where this is coming in and happening to some extent,” Braun said. He added that imposter scams can be done without using an artificial voice but warned that “AI makes it even easier because it’s like talking to your grandkid.”

Braun recalled a Senate hearing this week in which Senator Richard Blumenthal, D-Conn., opened the hearing on AI with an AI-generated voice that sounded like him, reading off an AI-generated script and said scammers have access to these same tools.

“When you can replicate a voice to the extent I couldn’t tell if that was Sen. Blumenthal or a replication – it sounded exactly like him – just imagine,” Braun said. “That is a tool that the scammers never had.”

The FTC has said it will use its authority to protect consumers from AI to the extent it can, as Washington policymakers look to expand their regulatory oversight of this new technology. The Senate letter to the agency suggested that the FTC update its “educational and awareness” materials to help seniors understand that scammers may be looking to fleece them out of their money using AI-generated voices.

“I’ve never seen any new technology, new business, where the people that created it have been more worried about how you use it,” he said. “They’re worried that if they’re going to get any monetary value out of it, they are going to have to make sure it’s well-regulated.”

“I just think there’s no way that AI can go unchecked, and I’m glad to see the people … on the forefront are thinking the same way,” he said.

Reference: Fox News (May 18, 2023) “AI ‘voice clone’ scams increasingly hitting elderly Americans, senators warn”

What Should I Know About Wills?

A valid last will lets you do the following:

Leave assets to people that would be excluded by the laws controlling property distribution after you die;
Change how your assets would be distributed to family members;
Establish caretakers for your children; and
Create requirements for inheriting.

Forbes’ recent article entitled, “Last Will And Testament: Everything You Need To Know,” explains that a will is a legal document created in anticipation of your death. The best known function of a last will is to determine who gets property. However, a last will can also control other things about your property and responsibilities. It’s an important tool in estate planning and one that almost everyone should create.

There are different kinds of last wills that you can create to take control of your legacy. Let’s look at some of the most common types.

Simple Will. With this last will, assets are left directly to beneficiaries. Simple wills are easy to write in most cases, and you can amend them as needed over time. They are a sound choice for those who don’t have children from a prior marriage, who do not have a lot of assets and who do not have concerns about anyone challenging their last will and testament.

Complex Will. This will is used if you have more specialized needs, such as creating a testamentary trust, which is created within your last will. You create the testamentary trust to transfer ownership of assets into a trust instead of directly to beneficiaries. A complex last will can also be used to create a special needs trust (to leave assets to a person with disabilities who relies on means-tested government benefits) or to create a protective trust for your child.

Holographic Will. A holographic will is handwritten by the creator of the last will (known as the testator). This type of last will isn’t recognized in all states. A holographic last will must also often meet specific requirements, such as the last will being signed by witnesses present when the testator signed the document.

Living Will. This is much different from the other kinds of wills. A living will does not specify who inherits assets, but rather is aimed at making advanced decisions about medical care. When you create a living will, you specify what kinds of medical care you do and do not want if decisions must be made while incapacitated.

Reference: Forbes (May 18, 2023) “Last Will And Testament: Everything You Need To Know”

What Does “Power of Attorney” Mean?

A power of attorney is a legal document giving one person—the “agent”—the legal power to make legal, financial, or medical decisions for another person. According to a recent article from Nerd Wallet, “What is a Power of Attorney (POA)? Types, How, When to Use,” the POA lets someone act on your behalf if you are traveling, too sick to act on your own behalf or can’t be present to sign legal documents.

You may name any adult, including your spouse, adult child, sibling, or a trusted friend, to act as your agent under power of attorney. It can be granted to anyone who is a legal adult and of sound mind. Ordinary power of attorney designations dissolve if you become incapacitated. However, durable power of attorney designations remain intact, even upon incapacity.

You can give one person power of attorney or divide the responsibilities among multiple people.

Most people don’t know that power of authority authorizations can be very specific or general, depending on your needs. When having an experienced estate planning attorney draft a power of attorney, review the desired scope of your agent’s authority, when it should take effect and the desired duration.

If you don’t have a power of attorney and become incapacitated, a court can appoint someone to act on your behalf. However, court intervention turns a private matter into a public proceeding, and you cannot know if the appointed conservator will follow your wishes.

There are several types of power of attorney. The durable power of attorney remains intact, even when you are incapacitated. The ordinary power of attorney becomes moot once you are incapacitated. A dual power of attorney gives power to two people and requires both individuals to sign off on any decisions.

A dual power of attorney may be useful if you have two children, for instance, and you’d like them to make joint decisions for you. Regardless of how many powers of attorney you appoint, you should always name successor agents for each power of attorney, in case the primary person is unable or unwilling to serve when needed.

A medical power of attorney, also called a health care proxy, is a type of advance directive giving another person to make all health care decisions for you in accordance with your wishes when you are unable to do so. Health care proxy decisions generally cover any type of medical treatment or procedure to diagnose and treat your health. Make sure the person you grant medical power of attorney to is familiar with your wishes and knows what decisions you would want in treatment or for life—supporting measures.

Reference: Nerd Wallet (May 10, 2023) “What is a Power of Attorney (POA)? Types, How, When to Use”

Is Coffee Good for My Blood Pressure?

A new study has found that drinking three or more cups of coffee is associated with lower blood pressure.

According to the study’s lead author, Dr. Arrigo F.G. Cicero, associate professor in the Department of Medical and Surgical Sciences at the University of Bologna, peripheral and central blood pressure are markers of arterial stiffening and aging.

Healthline’s recent article entitled, “Hypertension: 3 Cups of Coffee a Day May Lower Blood Pressure,” noted that in seniors with high blood pressure, the large arteries tend to be stiffer, leading to higher systolic blood pressure (the top number of the blood pressure reading) and wider pulse pressure (the difference between the top and bottom numbers).

The authors note in their report that the effects of coffee on blood pressure are still questioned, since the caffeine content of coffee can raise blood pressure in the short term. However, these effects may be offset by coffee’s antioxidants, which can help blood vessels dilate and protect cells against free radicals.

Cicero and his team examined a sample of 720 men and 783 women in the Brisighella Heart Study. This ongoing study began in 1972 and included a randomized sample representative of a rural Northern Italy town called Brisighella. They looked at the participants’ blood pressure and coffee-drinking habits and a selection of other data relevant to cardiovascular health.

The researchers found that coffee consumption was associated with lower blood pressure.

“The trend seems to be positive from two [cups of] coffee per day,” said Cicero. “So, coffee drinking should not be a priori forbidden in current coffee drinkers, if the fear is that coffee could increase BP levels.”

Dr. Jim Liu, a cardiologist at The Ohio State University, said that while this study is small and focuses on a specific population, its findings are consistent with prior knowledge about how coffee affects blood pressure.

“Coffee can increase blood pressure acutely after consumption, but there really has not been any consistent evidence to show that moderate amounts of coffee consumption lead to long-term issues with high blood pressure or heart disease in general,” he noted.

The American Heart Association says that people are advised to avoid drinking “too much” coffee because of its ability to raise blood pressure. It can also cause problems sleeping, heart palpitations and anxiety.

Reference: Healthline (February 12, 2023) “Hypertension: 3 Cups of Coffee a Day May Lower Blood Pressure”

What Changes Will Allow Military Families to Put More Food on the Table?

Defense officials plan to modify the eligibility rules for the Basic Needs Allowance, increasing the income eligibility cap to 150% of federal poverty guidelines, Secretary of Defense Lloyd Austin said during a Senate Armed Services Committee hearing.

Military Times’ recent article, “More troops will soon be eligible for Basic Needs Allowance,” says that’s six months before the DoD is required by law to make the change. The higher income cap “will allow us to help more families,” Austin said.

Mandated in the 2022 National Defense Authorization Act, the allowance is a safety net for military families to help combat food insecurity. The law went into effect in January and currently applies to troops whose total family income is less than 130% of federal poverty guidelines. In addition to total family income, this is based on household size and location.

In the 2023 National Defense Authorization Act, Congress added a provision raising the income eligibility cap for the allowance to 150% of federal poverty guidelines. This lets more families qualify. The DoD is required to implement the new provision by 2024. However, the law allows them to do it earlier.

Based on Defense Department estimates, the higher income cap would increase the number of active duty families eligible for the allowance to about 2,400. However, a sticking point is that the Basic Allowance for Housing is counted as income by DoD when calculating eligibility. Senator Kirsten Gillibrand of New York asked Austin whether he would consider removing BAH from the calculation for the Basic Needs Allowance.

“We will do whatever’s feasible or what we’re allowed to do by law,” Austin replied.

“DoD’s own surveys show that 24% of our service members experience food insecurity,” Gillibrand said. “Last year, I met with military families on Staten Island who spoke about the challenges they face in basically putting food on the table to feed their kids.

“However, very few service members are considered eligible for Basic Needs Allowance … since [the housing allowance] is included in family income calculations.”

In addition, two congressmen have proposed legislation that would make the Basic Needs Allowance tax-exempt.

“Taxing support meant to help the most vulnerable undermines the purpose,” said Rep. Steve Womack, R-Arkansas, who introduced the proposal on March 22 with Rep. Dan Kildee, D-Michigan. “BNA should be treated like other military benefits outside of earned income, which is exactly what this bill prescribes.”

Military members “deserve to receive the full value of their military benefits,” said Kildee. “The Basic Needs Allowance, which helps support thousands of service members and their families, is not income and should not be subject to income taxes.”

Reference: Military Times (April 3, 2023) “More troops will soon be eligible for Basic Needs Allowance”

How Are Retirees Spending Their Nest Eggs?

The Investment Company Institute recently surveyed more than 9,000 adults to learn more about the characteristics and activities of those with IRA accounts, says Money Talks News’ recent article entitled, “3 Ways Retirees Are Spending Their IRA Savings.”

As part of the survey, ICI looked at what retiree households —those in which the head of household or spouse has retired from their lifetime occupation — do with the money they take out of their traditional IRAs.

Here’s what they said:

Reinvest or save it in another account. Almost half (44%) of retiree households used a traditional IRA withdrawal. It can be tough to stop when you have spent year after year scrimping and saving for retirement. Maybe that’s why so many people withdraw funds from their IRA and put the cash right back to work.
Pay for living expenses. Thirty-seven percent of retiree households said that they used a traditional IRA withdrawal for this purpose. The whole point of building a nest egg is to make sure you have enough money to pay the bills in retirement, and for many of the survey respondents, paying for living expenses is the primary reason they tap their IRA.
Buy, repair, or remodel a home. About 15% of retiree households said that they used a traditional IRA withdrawal for this purpose. In addition, retirees often tap an IRA to spruce up their homes. While this might sound surprising, it shouldn’t be because housing is the No. 1 expense most people face during their golden years.

Here are some other common reasons why retirees use their IRAs, according to the survey:

Some other purpose: 12%
Spent it on a car, boat, or big-ticket item other than a home: 6%
Used it for an emergency: 5%
Spent it on a health care expense: 4%
Paid for education: 1%

Reference: Money Talks News (February 25, 2023) “3 Ways Retirees Are Spending Their IRA Savings”

Who is Legally Able to Amend a Trust?

Procrastination is the most common mistake in estate planning when people don’t create a will and trusts and when documents are not updated. For one family, a revocable trust created when both parents are living presents some complex problems now, when the surviving wife wants to make changes but is suffering from serious health issues.

As described in the article “Estate Planning: Who can amend the trust” from NWI Times, this scenario requires a careful review of the trust document, which should contain instructions about how it can be amended and who has the authority to do so. An estate planning attorney must review the trust to ensure it can be amended.

If the trust allows the surviving settlor to amend the trust, the authority to amend it may only be given to the surviving settlor. The mother may be permitted to amend the trust. However, it can’t be anyone acting on her behalf.

If the language in the trust makes the power to amend personal, a guardian or an attorney-in-fact likely won’t be able to amend the trust. Likewise, if the mother is incapacitated and cannot do this herself, the trust may not be amendable while she is ill or disabled.

However, if the trust allows the surviving settlor to amend the trust and the power is not personal, a legal representative, such as a guardian or an attorney-in-fact, may be able to amend the trust for her, if they have the authority to do so under the terms of the trust.

Anyone contemplating this amendment must be aware of any “self-dealing” issues. The legal representative will be restricted to making changes only for the benefit of the beneficiaries and should be mindful before attempting to amend the trust.

Suppose the authority to amend doesn’t exist or other restrictions make it impossible, depending on the state’s laws. In that case, it may be possible to docket the trust with the court and obtain a court order authorizing the trustee to depart from the terms of the trust or even amend the document.

Accomplishing this is far easier if all involved agree with the changes to be made. Unfortunately, if any interested parties object, it may lead to litigation.

Depending upon the desired change, entering into a family settlement agreement may be possible after the mother dies. If everyone is willing to sign off, an agreement can be written authorizing the trustee to deviate from the terms of the trust. This will also require the guidance of an estate planning attorney to ensure that the agreement follows the state’s laws.

If family members disagree with the change, the trustee can refuse to accept the settlement agreement to protect themselves from potential liability.

Reference: NWI Times (May 7, 2023) “Estate Planning: Who can amend the trust”

What Are Estate Taxes?

As the baby boom generation members age, they will eventually pass on their wealth to the next generation. When this occurs, millennials must be prepared to pay taxes on their inheritances, says a recent article, “Millennials May Inherit $68 Trillion: Here’s What to Know About Estate and Inheritance Taxes,” from The Motley Fool.

Estate taxes are imposed on the transfer of assets after someone dies. Not every estate in the U.S. is subject to federal estate tax. Only estates valued above a certain threshold are subject to taxes. This is currently $12.92 million for singles and $25.84 for married couples. No federal estate tax is due if the estate is below this amount.

Estate taxes are paid by the decedent’s estate, not the person who inherits the wealth. When a person dies, their executor is responsible for completing the estate tax return and paying any taxes owed. The estate of the decedent person will only pay taxes on the amount over this threshold.

Estate taxes are levied on all assets a person owns at their death, including real estate, stocks, bonds, jewelry, cash and other valuables. The percentage of estate tax charged ranges from 18% to 40% of the estate’s total value. For example, an estate is valued at $15.5 million in 2023, and the expenses incurred before death—medical, funeral costs, etc., cost $500,000. You’d subtract this amount from the estate’s total value ($15.5 million—$500,000—$12.92 million threshold). Since the taxable amount is over $1 million, it will be subject to a 40% tax rate—making the taxes owed $832,000. The after-tax for heirs would be $14,168,000.

In addition, some states levy their own estate taxes. Twelve states have an estate tax: Connecticut, Hawaii, Illinois, Maine, Maryland, Massachusetts, Minnesota, New York, Oregon, Rhode Island, Vermont, Washington and the District of Columbia. Five states have only an inheritance tax—Iowa, Kentucky, Nebraska, New Jersey, Pennsylvania, and Maryland have a state estate tax plus an inheritance tax.

Can you protect your heirs from estate taxes? In a word, yes!

There are many ways to avoid federal and state estate taxes. One is to gift money and assets to loved ones while living, taking advantage of the annual gift tax exclusion, which lets you give up to $17,000 per person without incurring any taxes.

Another is to place assets in a trust. Your estate planning attorney will advise you on what kind of trust works best for your situation. For example, charitable trusts donate portions of your estate to a charity while taking the assets out of your taxable estate.

Once the Tax Cuts and Jobs Act of 2017 expires, the federal estate tax exemption will return to the $5.49 million exemption, around $6.2 million when adjusted for inflation. Therefore, it is essential for anyone whose estate may exceed this considerably lower threshold to plan now to avoid having to pay estate taxes after December 31, 2025.

Reference: The Motley Fool (May 2, 2023) “Millennials May Inherit $68 Trillion: Here’s What to Know About Estate and Inheritance Taxes”

Will I Be Able to Afford Nursing Home Care?

About 60% of older adults — or 24 million households — wouldn’t have the resources to pay for in-home long-term care, despite the fact that they would prefer to “age in place,” per a National Council on Aging report.

Fox News’ recent article entitled, “Most seniors in America can’t afford nursing homes or assisted living, study finds,” says that the researchers looked at 2018 data from the Health and Retirement Study, which was a joint effort by the National Institute on Aging and the Social Security Administration that surveyed some 20,000 U.S. adults about their net wealth.

When the researchers started examining the data some years ago, they were initially surprised to see that so many older adults were at severe risk of financial insecurity, Dr. Jane Tavares, a lead researcher at the LTSS Center at UMass Boston, told Fox News Digital.

“There is a common misconception that older adults are asset-rich, but we have found in our research that this is not generally true,” she said.

Dr. Tavares also noted, “We expect that there will probably be some worsening, once we examine data for the period covering the COVID pandemic.”

The national average cost for assisted living is $4,500 per month. However, it can vary significantly depending on the location and level of care needed.

“As the population continues to age and demand for these services grows, it is likely that the cost will continue to rise,” said Dr. Steven Norris, a senior health and care expert who is also the medical director at Transitions Care in Chicago, Illinois.

The widespread shortage of qualified caretakers means facilities must pay more to secure the right people.

“For decades, there has been a lack of awareness of how expensive assisted living really is.” “Additionally, recent increases in minimum wage requirements and changes in overtime payment legislation are increasing assisted living costs,” he said.

The cost could range from $3,000 in rural areas to $7,000 to $9,000 in urban locations.

“For decades, there has been a lack of awareness of how expensive assisted living really is,” Kim told Fox News Digital.

“Some people thought health insurance would cover long-term care costs, while other people optimistically believed that they would live a healthy life forever.”

Assisted living companies had to raise prices to keep up with their costs continually. However, retirees did not see the same growth in savings or investments. Middle-aged and older adults are also now facing a very different financial landscape than the generations before them did. More than the increases in household income and assets have also been needed to keep up with rising living costs, health care and inflation. Even when older adults have assets, they are often tied up in property and need to be more readily available to help them cover costs.

The changing retirement model has also added to gaps in savings. Past generations had private, employer-sponsored pensions that provided predictable payments. Many Americans now rely on 401(K) accounts, leaving individuals responsible for saving enough money to cover their retirement years.

“With all of this combined, few older adults have any significant savings in retirement accounts — and most can’t afford long-term care insurance that would help cover the expensive costs of assisted living or nursing home care,” she explained.

“With private long-term care insurance being unaffordable for most older adults, it is key to begin considering combined public and private initiatives that can put the cost of coverage within reach and make it more appealing to consumers,” she said.

Reference: Fox News (April 26, 2023) “Most seniors in America can’t afford nursing homes or assisted living, study finds”

How Do I Talk to My Parents About Estate Planning?

The best time to have this conversation is today. If you’re unsure how to broach the subject, you might ask a trusted family friend to help you navigate the conversation with compassion.

JP Morgan’s recent article, “How to talk to loved ones about estate planning,” says that if your loved ones have already started this process, ask which documents they have and see if any need to be updated. You may need to consult an experienced estate planning attorney to see what’s required.

Discussing estate planning with aging parents can be challenging, since both sides may hesitate to broach tricky topics involving end-of-life care and related decisions. However, the probate process becomes much more difficult if your parent dies without an estate plan.

Delaying this conversation won’t make it any easier. It’s important to stay calm and address the topics gently and openly. You may have to initiate a conversation several times before your mom or dad is willing to open up—another reason to broach the topic sooner.

If you’re having difficulty getting through to them, you could bring in another family member or a trusted family friend who can help you approach this conversation with the needed compassion. You may also consult an estate planning attorney to help plan and frame the conversation itself.

If your parents haven’t started planning their estate yet, think about some of the critical matters you want to discuss, like health issues, medical insurance, help with making decisions in case of incapacity, help to pay bills and keeping finances in order.

You should also ask about a plan if they need help managing daily tasks like walking, dressing, preparing meals and bathing.

Decision-making can also become a challenge for some as they get older. Therefore, having a valid power of attorney, living will and health care proxy is critical.

As tough as this can be, you must ask these questions when helping your parents plan their estate and future.

Reference: JP Morgan (April 26, 2023) “How to talk to loved ones about estate planning”

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