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Posted on Tuesday, October 20th, 2015 by Peter Klenk

From our “Ask a Question” mailbag: My father has reached the age where he has become trusting to a fault. He was called by an unscrupulous telemarketer and fleeced out of several thousand dollars. I am worried that his number will now be passed around to other criminals and he will write more checks. How do I protect my dad from criminal telemarketers?

Your suspicions are right—once your dad’s recognized as a potential “mark” among the criminal community, he could become a target for scammers who pretend to be calling him on your behalf, asking for payments toward funeral expenses, emergency medical bills, or sweepstakes prize processing fees. According to the FBI, your father likely shares traits that were common among his generation — raised to be polite and trusting, and often reluctant to hang up the phone even if they suspect a scam.

Because these scammers are often hard to track down, you must still take the important step of helping your father recognize the problem. If he’s still competent (but just stubborn or proud), there’s not much you can do beyond monitoring his spending as much as he’ll allow.If he does recognize that he needs some help, there are a several options that can help shield his money from telemarketers.

First, he could form a Revocable Living Trust and place his assets into the trust. You could be named either the co-trustee along with your father, or he could name you the sole trustee. If you are co-trustee, then he would still have the power to write checks without your permission, but you could more carefully monitor the accounts. If he felt comfortable naming you the sole trustee, then you would be writing the checks yourself so you could verify the legitimacy of each bill in advance. The second option gives your father more protection, but it requires him to give up more control.

Another option is having your father create an Irrevocable Trust for his own benefit. He could name you as the sole trustee (he can keep the power to fire and replace you, if that makes him feel more comfortable) but name himself as the sole beneficiary. By transferring his assets into this trust, he then surrenders the ability to revoke the trust. This is an advantage for clients with Alzheimer’s, because they can sometimes become very paranoid as they diminish and revoke a Revocable Living Trust—effectively sabotaging the safeguards they created for themselves prior to the disease advancing.

While this means the assets are very much protected from his being victimized by telemarketers, it does not protect the money from legitimate creditors, nor does it remove the assets from his taxable estate. Because he remains the beneficiary a legitimate creditor can demand payment and at his death the assets will still be considered his for death tax purposes.

Trusts can be crafted to fit your father’s comfort level. He can give you as much power as his comfort level allows him and he can retain some powers. The best way to move forward is for me to talk to your father directly to determine his concerns, inventory the assets he wishes to protect, and determine what trust best fits his estate planning and asset protection goals. This would be a free consultation, so there’s nothing lost by him in just talking.

If you have any other questions about Estate Planning, Revocable Living Trusts or Irrevocable Trusts, feel free to contact our office for a free consultation with one of our New Jersey estate planning lawyers.

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