Young at Heart
Watch Out for Fraud While Holiday Shopping
(StatePoint) While gifts are being wrapped and lights are being hung, fraudsters are devising ways to leverage the holidays to scam you out of your money. Because an urgency to buy gifts and find deals make the season a time of high risk, it is more important than ever to exercise caution and to know that scams can come in-person, by phone, by email, by text or even via social media.
Last year, Darktrace researchers detected a 692% increase in Black Fridaythemed phishing attacks in late November, where fraudsters sent emails to trick people into taking certain actions, and Visa identified a 284% increase in fake and spoofed merchant websites in the four months leading up to the holiday season. A Norton Cyber Safety survey found that around a third of Americans have been targeted by a holiday shopping scam, and around half of those targeted actually fell victim.
What are some of the most prevalent seasonal scams?
Gift Card Scams. Pre-paid gift cards can be taken off the rack, drained of the funds and then repackaged, meaning you buy a gift card that has no value. Criminals attempting to scam you may also ask for payment via gift card, realizing payment is instant and your money will be irretrievable.
Package Scams. Scammers may make false claims about a returned package or other delivery issues to convince you to give them personal information. Criminals may even go as far as sending a package you didn’t order to force you to engage with them with an aim to elicit your personal information or a payment. False Claims. Holiday fraud attempts are often made by making false claims that either a credit card was declined or that you are owed a refund of some sort, prompting you to engage and provide information.
Online Scams. Fake online shopping websites and too-good-to-be-true sales or offers are widely promoted by email and on social media. A lot of these deals will highlight a limited window of opportunity to force immediate action and create a sense of urgency.
Charity Scams. Scammers create phony charities to exploit the generosity of people during the season of giving by creating professional and legitimatelooking material online, complete with branding, photos and compelling stories.
Here are some ways to help protect yourself and your wallet:
• Be Suspicious. Maintain awareness that there are a lot of fake offers and false claims during the holiday season and take the time to carefully investigate anyone you don’t know who contacts you or sends packages and asks for your personal or payment information.
• Stay Alert. Check gift cards to make sure the PINs aren’t exposed with the coverings already scratched off before you purchase them. Keep track of your accounts and flag any suspicious transactions for your financial services provider or bank. If needed, freeze your account and have cards reissued. Setting up alerts with your bank enables them to flag these issues for you, too.
• Don’t Rush. Even if the deal or gift offered online or on social media seems like a great value, pause before clicking. Research the organization and stick with trusted brands and points of sale when making purchases whenever possible.
• Check Charities. Research charities before giving by utilizing a reliable charity checking site like Charity Navigator, Charity Watch or GuideStar.
A little extra caution around the holidays can make for a season that is merry and bright.
Life insurance products to consider
Life insurance is an important component of wealth management and financial planning. Life insurance is designed to lessen the financial burden on loved ones in the event of a policy holder’s death. Life insurance typically is cheaper to purchase when someone is young and gets more expensive as a person ages. Health history, life choices (like smoking) and additional factors play key roles in determining the cost of a policy, according to the Office of the Insurance Commissioner of Washington State.
Life insurance policies are not all the same, and generally are categorized as term life insurance and permanent life insurance. With term life insurance, a person gets coverage for a defined length of time. If the insured dies during that time, money is paid to the person’s beneficiaries. When the term expires, no money is paid out and the person must get new coverage or go without life insurance. With a permanent life insurance policy, the coverage is lifelong and also includes a “cash value” component that can help with other financial objectives, such as saving for retirement. A deep dive into life insurance can help consumers determine which policy is best for them.
Term life insurance
This type of policy is sold in periods of one, five, 10, 15, 20, 25, or 30 years. Coverage amounts vary and people buy term life insurance for a length long enough to cover their prime working years, according to NerdWallet. This is often the least expensive life insurance product, but if a person outlives the policy, beneficiaries won’t receive a payout.
Permanent life insurance
Permanent life insurance is designed to cover a person’s entire life. The cash value component grows over time and can be borrowed against to pay for various needs. There are specific types of permanent life insurance.
• Whole life insurance: Whole life insurance will last a person’s entire life if premiums are maintained. In general, premiums stay the same and the insured gets the guaranteed rate of return on the policy’s cash value. The death benefit also will not change. Premiums are more expensive than term life, so this is best for people who want a basic permanent policy who can afford the higher premiums.
• Universal life insurance: This coverage is cheaper than whole life insurance, but still more expensive than term life. With this type of policy, the insured can raise or lower the amount they pay within the limits of the policy. However, premiums typically increase over time, and individuals may subtract these increased costs against their cash value account component or death benefit. That cash value component grows based on market interest rates, says NerdWallet, and is not guaranteed.
• Variable universal life insurance: This type of insurance allows the cash value component to be invested in stocks, bonds and other investment products. Premiums are flexible, but a higher risk tolerance is necessary. While there is potential for greater growth, there also is the risk that comes with investing these funds, says Guardian.
• Indexed universal life insurance: Balancing risk with reward, an indexed universal life insurance policy can have the cash value growth linked to the per-
formance of a stock market index like the S&P 500. Guardian says these policies use downside protection and upside caps. This means that during a bad market year, the insured’s cash value will not decline, but in a good year, the cash value won’t grow as much as the index itself. This policy is good for people who want to invest their money but risk little.
• Burial/final expense insurance: This is a very small policy designed to cov-
er the costs of final expenses, but may not qualify for other life insurance. The death benefit is guaranteed but is often limited to between $5,000 and $25,000. Since a medical exam is not needed, it is an option for seniors and those with preexisting conditions.
Individuals can explore various life insurance policy options to provide peace of mind that beneficiaries are provided for in the event of their death.
Planning for the Future to Protect Generational Wealth
(StatePoint) In the coming years, baby boomers are poised to pass down an estimated $17 trillion in home equity to their children, according to a recent Freddie Mac survey. But whether or not you’re among the 75% of homeowners in this generation planning to leave your current home or the proceeds from a home sale to family members when they pass away, having a clear estate plan is critical to ensuring your wishes come to fruition.
Without one, your future heirs may face complex ownership issues, potential legal disputes and even the loss of family property.
To help your family plan for the future and protect generational wealth, Freddie Mac is sharing information about some of the pitfalls that may occur in the absence of an estate plan, as well as steps you can take to protect the wealth you’ve built over your lifetime.
Tangled Titles
Heirs’ property, also referred to as a tangled title, is created when a family member dies without a will or court document passing their property to a specific heir or heirs. When this happens, the property may be transferred by inheritance to multiple family members who each have equal rights to use and occupy the property. Unfortunately, this can lead to messy legal disputes among family members, limited access to resources, and loss of generational wealth due to forced sales or costly legal battles. These disputes are common in this scenario because each heir has shared responsibilities regarding the property. For example, all heirs will be expected to contribute to property-related taxes and upkeep, which can become difficult to manage collectively. Additionally, major property decisions often require
agreement among all heirs, which can make it difficult to maintain, improve or sell the property.
As generations pass, the property may be further divided among new heirs, complicating ownership even more. Lacking a clear legal title, heirs often struggle to qualify for resources like home equity loans or disaster relief funds, leaving properties vulnerable to foreclosure or forced sales.
Avoiding Heirs’ Property
Planning for the future helps prevent legal and financial complications like heirs’ property. Here are steps to take to protect your family’s property and wealth:
• Create a will or trust. Work with a trusted legal advisor to create an estate plan that can ensure your property is passed down as intended.
• Establish a power of attorney. Appoint someone you trust to manage your property and financial affairs in your absence.
• Develop a wealth management plan. This can help you and your family prepare for unexpected situations and emergencies.
• Get smart about estate plans and other wealth management topics. Freddie Mac CreditSmart Essentials, a customizable and free online course, has all the tools, resources and lessons you need to help achieve your financial goals.
Taking proactive steps in estate planning is crucial for protecting your assets and ensuring they benefit future generations.