1. ONLINE SHOPPING SCAMS
With the variety of products offered by online retailers, it is no surprise that people are turning to the internet for their shopping needs. Scammers have taken advantage and 'set up shop' posing as online retail stores with professional-looking websites and domains. Customers are often lured in by low prices, but the advertised products differ drastically from what is received—if the buyer receives anything. Before purchasing from an unknown seller, a savvy buyer should read reviews about others' experiences with the retailer. Be especially wary if a seller requests payment unconventionally, such as a money order or wire transfer. Last year alone, people over 60 lost at least $14 million from online shopping scams.

2. ROMANCE SCAMS
In 2020, romance scams were the leading cause of fraudulent financial loss, with total reported losses of $304 million. The increased popularity of online dating has led to an increase in romance scams. Typically, a scammer will create a fake (but very attractive!) profile on a dating or social media site and will reach out to the victim to develop a relationship via chatting or texting while avoiding in-person meet-ups and video chats. Eventually, the scammer will request money or gifts, such as gift cards, from the victim. To avoid falling victim to a romance scam, never send cash or gifts to someone you have not met.

3. TECH SUPPORT SCAMS
Technology has become increasingly central to modern society. To keep up, seniors may seek assistance from scammers posing as tech support professionals. These fraudsters take advantage of the 'client's' inexperience and sell them unnecessary products and services or charge a severe markup. The most common place to encounter these scammers is online. When browsing the internet, a pop-up warning may alert the user of a virus or other security issue on their computer. Although the message may appear official and seem urgent, it is a way to trick the user into contacting and sending money to the fraudster. When these pop-ups appear, close the tab and ignore the warning. Be sure to keep your anti-virus software up-to-date for peace of mind.

4. HEALTHCARE/MEDICARE FRAUD
Fraudsters conducting healthcare-related scams take advantage of the fact that every citizen over 65 qualifies for Medicare, making it a prime candidate for fraud. Fraudsters may pose as a Medicare representative to get seniors to share their personal information. Scammers might provide bogus services for seniors at makeshift clinics, then bill Medicare and pocket the money. Medicare scams commonly follow the latest developments and trends in medical research, such as genetic testing and COVID-19 vaccination. Contact your attorney if you are uncertain of the identity of someone requesting your Medicare information.

5. IMPOSTER SCAMS / THE "GRANDPARENT" SCAM
Imposter Scams are plentiful and diverse: Fraudsters may pose as government officials, financial institutions, charitable organizations, friends or family members to obtain money or sensitive information such as bank accounts, passwords and other personal data. In an imposter scam, a fraudster will present themselves as a familiar person or institution, either by creating an online profile or website or simply by introducing themselves as being associated with a particular organization such as a charity, the IRS or your local bank. If the fraudster is posing as someone you know personally, such as a grandchild, ask questions only your loved one would know the answer, or call your loved one to confirm whether the request is legitimate. Scammers posing as government officials may try to frighten or intimidate you by telling you your Social Security Number has been linked to criminal activity or has been suspended, or they may tell you that you have unpaid taxes and action will be taken if not paid immediately. Note that you will likely be contacted via mail if there are any issues with your taxes. If you have questions about the legitimacy of a request for payment to a charity or government institution, contact your attorney for guidance.

6. SWEEPSTAKES SCAMS/ADVANCE FEE SCAMS
In a typical sweepstakes or 'advance fee' scam, a victim will be notified that they have won a prize or are entitled to some benefit, for example, an inheritance from a foreign source. The victim is told that to receive the prize or benefit, they will first be required to pay a fee or tax upfront. Actual sweepstakes generally state "no purchase necessary," and winners should not be asked to pay money to claim the prize. Be leery and contact your attorney if you find yourself in this situation.

7. FRAUDULENT INVESTMENT SCHEMES
With older adults looking to plan for and manage their finances after retirement, fraudsters have created investment schemes targeting these individuals. From Ponzi schemes to tales of unclaimed inheritance money from a distant relative to exceedingly complex financial products, investment schemes are a tried and true way of taking advantage of people. Word of advice: if it sounds too good to be true, it probably is. Always verify the legitimacy of an organization before investing money, and contact your attorney if you have questions.

8. PHISHING/INTERNET SCAMS
Phishing emails, text messages, and phone calls are extremely popular these days. Scammers can create emails and spoof telephone numbers that appear to be associated with known institutions—it is even possible that caller ID would show the phone call as coming from a well-known establishment. Before opening any links or attachments in an email, carefully study the sender's email address to verify its legitimacy—often phony email addresses contain extra characters or numbers that wouldn't appear in an official email address.

If you receive a telephone call purporting to be from a government agency, a utility company, an online retailer, your bank, or another familiar contact, politely inform the caller that you will call them back. After you hang up, find a trusted contact number for the source through their website. Call the company back using the phone number listed on the website. Inform them that you received a call asking for money or personal information and verify if the request was legitimate. When in doubt, contact your attorney to seek a second opinion.

What To Do If You Think You've Been Scammed?

Even the most vigilant of individuals can fall victim to a savvy scam artist. If you think you have been scammed, take these steps:

1. Stop communication with the scammer immediately and report the fraud to the Federal Trade Commission at ftc.gov

2. Call your financial institutions and request they freeze your accounts.

3. If the scammer has gained access to your Social Security Number or Medicare number, notify the appropriate institution(s). If your Social Security Number was compromised, you may want to lock your credit with the three major credit bureaus to prevent the fraudster from opening new accounts or applying for loans in your name.

4. Contact the authorities, your insurer and your attorney to discuss your options.

The combination will give Stage Law Firm clients the opportunity to benefit from the firm’s local Warwick presence and regional scope for sophisticated estate, tax and elder law planning.

In 2007, Attorney Joseph Donohue established the Warwick, New York office at 11 Oakland Avenue. We have been pleased to serve many families and small businesses in the Warwick community over the years. Since founding our flagship office, the practice has grown from a single office to a multi-jurisdictional firm with offices in New York, New Jersey, Connecticut, and New Hampshire. In an effort to better serve the needs of clients in surrounding states, we recently opened a Boston, Massachusetts location. We are also planning an expansion Naples, Florida for our “snowbird” clients. Our practice now serves over 8,000 individuals and businesses and continues to flourish thanks to the relationships we have built with our clients and vendors. We look forward to continuing to serve your families and your colleagues throughout the northeast.

How to position yourself for the sunset of the Tax Cuts & Jobs Act

Effective January 1, 2018 the Tax Cuts and Jobs Act (“TCJA”) more than doubled the federal gift and estate tax exclusion amount, increasing the individual exclusion from $5,450,000 to $11,400,000. Today in 2022, the exclusion is at an all-time high of $12,060,000 per person or $24,120,000 for a married couple.

Currently, federal gift taxes apply to inter vivos transfers of money and assets valued above $16,000 per year, per donor, per recipient. Federal estate taxes apply to the value of a decedent’s taxable estate following death. The federal gift and estate tax exclusion is first applied against any taxable gifts made during a person’s lifetime at the time such gifts are made, and any remaining exclusion is applied against the individual’s federal estate tax.

In practical terms, during one’s lifetime, the federal gift and estate tax exclusion allows a person to transfer assets valued up to the exclusion amount (as well as any future appreciation of such assets) out of his or her taxable estate, whether to a trust or to another individual or entity, free of federal gift tax. After one’s passing, any unused exclusion amount will be applied to the decedent’s taxable estate, and only the value of the estate exceeding the exclusion amount will be subject to federal estate tax at rates up to 40%.

The current enhanced federal gift and estate tax exclusion provides an optimal environment for those seeking to employ tax planning strategies to minimize future estate tax exposure. However, the enhanced exclusion created by the TCJA is set to expire, or ‘sunset’, on December 31, 2025. On January 1, 2026, the exclusion will be reduced by about half to an estimated $6,200,000.

One important consideration to factor into your tax and estate planning is that any exclusion used prior to the 2025 sunset will be first deducted from your post-sunset exclusion amount. Meaning, if prior to the sunset you use $6,000,000 of your federal gift and estate tax exclusion, and in 2026 the exclusion is reduced to $6,200,000, you will only have $200,000 remaining in federal gift and estate tax exclusion at your disposal.

In light of this caveat, one method to consider if married, is to apply all gifts made prior to the 2025 sunset against one spouse’s federal gift and estate tax exclusion, while leaving the other spouse’s federal exclusion untouched. This allows a couple to retain ownership of assets that are difficult to transfer outside of the taxable estate (such as retirement accounts). If one spouse passes with unused federal estate tax exclusion, the surviving spouse can avail him or herself of the deceased spouse’s exclusion via the Deceased Spouse Unused Election (“DSUE”).

It is also important to note that some states, including Massachusetts and New York, impose a state-level estate tax in addition to the federal estate tax. For example, Massachusetts imposes a graduated estate tax ranging between .8% and 16% of the total value of the estate to estates exceeding $1,000,000, and New York imposes an estate tax at rates between 3.06% and 16% on estates exceeding $6,110,000. New Yorkers whose estates exceed 105% of the $6,110,000 threshold (i.e., $6,415,500) will be taxed on the entirety of the value of their estate from the first dollar.

Those whose taxable estates exceed both state and federal taxation thresholds will essentially be subject to a double tax on the value of their taxable estate – one to the federal government at rates up to 40%, and one to the state government at then-prevailing rates. Our attorneys can help you determine how to minimize or eliminate your state estate tax exposure while taking advantage of the enhanced federal gift and estate tax exclusion.

In anticipation of the 2025 sunset, if your assets exceed the applicable estate tax thresholds, you should speak to a tax and estate planning professional to understand your total estate tax exposure and determine options to reduce your estate tax exposure at both a federal and state level. Call us to find out how we may be able to help you.