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Dale Gribow Feb. 15, 2015

Last week I wrote about vets being scammed, yet again, with offers of free meals. Of course not all free lunch or dinner events are meant to take advantage of seniors. As a matter of fact I too have lectured at senior centers on Estate Planning and the options available to seniors.

When a lawyer gives the seminar you know who is talking to you and that he/she is mandated by the State Bar to be ethical and honest. A non-lawyer is often described as an Investment Counselor, Educator, Financial Planner and there is no disclosure, as mandated by law, that the person is there for the sole purpose of selling insurance.

The issue is the sale to unwitting retirees, of an unsuitable annuity....and being deceitful while doing so. There is a widespread scheme of inducing elderly residents of retirement homes and assisted living facilities to reposition their assets, in order to apply for pension benefits offered by the US Department of Veteran Affairs providing Aid and Attendance to those that qualify.

The unethical salesmen convince seniors if they were in the military 1 day while the USA was at war anywhere in the world, they then can apply and receive the $2,000 per month tax free for the rest of their life. They fail to advise the seniors of the other requirements necessary to qualify for the Aid and Attendance. The senior must be at least 65, unemployable with an honorable discharge and a medical necessity requiring assistance.To further induce the seniors they should go after this "free money" they incorrectly state if assets are over $80,000 that they can put them into an irrevocable trust. This sales pitch is inappropriate because the Aid and Attendance program was not designed to assist wealthy or even moderately wealthy retirees.

They target wealthy seniors in expensive retirement homes because those are the people who have money to buy insurance products. The seniors who truly would qualify for the Aid and Attendance can't afford these "retirement digs" and are thus passed over. Moreover the annuities recommend are long term investments, inappropriate for most seniors. They are often inflexible and not appropriate for senior portfolios.The recent lawsuit filed on behalf of a 90 year old Rancho Mirage woman, involved her repositioning $500,000 of assets making 8%, and putting them into a 10 year annuity spinning off less than 1%. Chances are she will never live to its conclusion.

Last week's article produced a call this morning from a 79 year old who purchased a 10 year annuity three years ago, which was arguably not appropriate. He was told it would provide monthly payments for the rest of his life. They did not explain that as the years wore down the amount per month would likewise go down.

Unfortunately the financial elder abuse of seniors requires them to "get involved" in the litigation and go to court. Prescott Cole, senior staff attorney for the California Advocate for Nursing Home Reform in San Francisco explains "They can't handle going to court and they do not want it".

The filed case involves someone representing himself as assisting senior vets but did not disclose he was an insurance salesperson. The California Insurance Code mandates that agents, engaged in the sale to a prospective insured 65 or older, have a duty of honesty, good faith and fair dealing.

The code goes on to explain that holding seminars or informational meeting that may result in the sale of insurance products to seniors "without divulging that such meetings constitute INSURANCE SALES PRESENTATONS, are in violation of California Insurance code section 787.

Moreover the code states that "failing to advise seniors, or their agents, in writing that the sale or liquidation of any stock, bond, IRA, certificate of deposit, mutual fund or other assets to fund the purchase of an annuity may have tax consequences, early withdrawal penalties or other costs in violation of section 789.8. Under that section failing to advise seniors or their agents they may wish to consult independent legal and financial advice before selling or liquidating any assets and prior to the purchase of any life or annuity product offered for sale is likewise illegal. The same code section states that the failure to adhere to the standard for visiting a senior in their home for the purpose of selling annuities is in violation of this code section

Litigation initiated against one insurance company last week resulted in their ceasing to sell their product in California. A special Hotline has been set up for elder abuse victim's complaints and assistance. Elder abuse can be financial, like the case herein, or a hospital or nursing home mistreating the senior. The law allows for a recovery of three times the amount of the PUNITIVE DAMAGES.

The VETERAN FRAUD HOTLINE number is 760 837-7555.

Questions? Contact Dale Gribow Attorney at Law at 760-565-0533.