Losing the Family Home Over a $400 Tax Bill

Senior care advocates repeatedly remind families that oversight is needed in some cases to ensure seniors do not fall victim to financial exploitation. Beyond protecting against scammers and hucksters, many seniors are facing a new financial crisis that is not rooted in illegal misconduct. When on a fixed income and struggling with confusing money issues, some seniors might face incredibly severe financial penalties for falling behind on certain bills or taxes.  CNN Money reported this week on a growing number of individuals who are losing their homes because they owe relatively small sums.  A report from the National Consumer Law Center (NCLC) detailed how some states have outdated laws that allow states to sell tax liens on delinquent properties.  This means that instead of the government having a lien on a piece of property that owed back taxes or bills for services like water and gas, private investors own the lien.  The investor then collects interests on the overdue bill or, in some cases, forecloses on the home.  Some states allow investors to charge staggeringly high interest rates, from 15% to 50%.

Seniors are particularly vulnerable to falling behind in this way, either because of challenges of being on a fixed income or confusion with the bill paying process.  The NCLC report details one case of an 81-year old woman who lost the home she lived in for 40 years because she owed $474 on a sewer bill.  The NCLC report noted that seniors with cognitive diseases, like dementia and Alzheimer's are prone to fall victim to this situation.  It is very confusing to follow the changing financial arrangements.  The seniors are usually notified of the situation in legalese that many do not understand.  As a result, they do nothing, rack up interest debt, eventually default, and often lose their home.  The report elaborated that seniors without family members or who have not visited with elder law attorneys and other professionals were more likely to be hurt by this situation.  In one case, an elderly woman who lived alone without family fell back $5,000 on taxes.  Eventually, she lost her home and lost about $150,000 in equity that she had accumulated.

Advocates are working to change laws so that interest rates are lowered and adequate warnings are provided to homeowners.  It remains unclear if those efforts will be successful, and so putting preventative measures in place now is prudent for local seniors to avoid this situation.

Need for Alzheimer's Association Expected to Grow

There were 39.6 million individuals in the U.S. over 65 years old in 2009. In roughly twenty years that number is expected to increase to 72.1 million. At that point the senior population will constitute roughly 19% of the total American populace. The changing demographics are placing significant strain on public Medicare and Medicaid resources. That is why many observers have focused more attention on the ways that outside not-for-profit groups are working to help seniors in need. It remains unclear if public programs will be able to fully handle the influx of seniors, and it is likely that local nonprofit groups will continue to play a vital role in ensuring that particularly vulnerable elderly community members receive the care they need.

A new Western Edition article recently summarized some organizations that provide various types of aid to seniors. For example, the Alzheimer's Association is the nation's leading organization raising awareness of this cognitive disease that affects so many local residents. Beyond advocating for support in research, the organization provides patient and family services to help those dealing with the effects of the condition which causes memory, thinking, and behavior challenges. The agency has a 24-hour a day help line where families can call for information and referrals.

Over 5.4 million Americans are currently living with Alzheimer's and the number is expected to more than triple in the next few decades. It is currently the sixth leading cause of death in the United States.  According to the Alzheimer's Association, more than $210 billion worth of unpaid care is currently being supplied by family members helping loved ones with different forms of dementia.

The Association reminds local residents that diagnosis is often delayed because the elderly and their family members mistake signs of the dementia as a "senior moment." In reality, the incident may be part of a serious cognitive condition. Dealing with the condition is much more difficult when health and legal affairs are not handled until the mental condition has deteriorated. 

To learn more about these issues, please take a look at the Alzheimer's Association website or call their hotline at 1-800-272-3900.  Please feel free to call our firm if you would like to discuss your family's situation in regard to estate planning.