The Many Faces of "Living Trust Mills"

We all know it’s important to provide care for our loved ones after we’re gone. For some that means to leave a legacy to our favorite charity to help sustain causes we’ve supported throughout our lives. We know we need to leave a valid will and maybe even a living trust to avoid probate, but what’s the best way to go about it? Thanks to constant ads on TV and social media, we’re bombarded by offers of quick, easy, and cheap final arrangements.

But not all these offers bring you the services you might expect. Entrusting the distribution of your assets to them might even harm you and your intended beneficiaries, long before your will is executed. Be vigilant and protect your assets for both you and those you love.

Con artists often take aim at vulnerable seniors of all income levels. Here are some danger signs to watch for from “living trust mill” fraud.

What Is a Living Trust Fund?

First, it’s important to understand what it means to fund a trust, and how it operates.

A living trust fund is a form of estate planning which helps a grantor transfer assets to his or her beneficiaries. Those who create a living trust fund still have control over their assets while they remain alive.

For example, even if a grantor has designated a house to a trust fund, he or she can still live in it for as long as he/she wants and continue to operate as the owner. Other items which might be placed in a living trust fund might include property, savings within a 401k, stock or bonds, automobiles, or other items of value.

Once the grantor/owner dies and the will goes into effect, the assets are transferred to the trust. They are then available to the designated beneficiaries. The beneficiaries can be descendants, business associates, charitable organizations, or whoever the grantor has chosen.

The Value of Understanding Estate Planning Basics

A living trust fund, then, is a vary useful and basic estate planning tool. However, it’s vital to safeguard your assets and to carefully choose the legal professional who prepares it. Different kinds of living trusts are available depending on which state you live in. If an organization is making any kind of the following arrangements below, it's likely a scam.

Living trust mills sometimes offer seminars or multimedia presentations at senior citizen centers, religious institutions, or assisted living establishments. Sales-pitched television advertising - the falsely acclaimed "legal professional" you've seen on TV who is far from the least bit legally qualified for trust drafting. Some promise a living trust fund and ask for such information as bank account numbers, then gather their mark’s financial information and vanish. Others use scare tactics to frighten older adults or susceptible parents into purchasing services they don’t need or which are improperly prepared, rendering them legally invalid.

The Markers of Living Trust Mills & Scams

Avoiding scammers preserves your assets as well as your tranquility, no matter your life circumstances. It’s not necessary to become a financial and legal expert to formulate a responsible and legally-authorized set of end-of-life documents. However, keeping on guard for certain warning signs can help steer you away from those who don’t have your best interests in mind.

• It’s fine to request the ID of a person who stands to give you guidance in such important decisions and legally-binding actions. Remember that anyone can print an impressive business card or official-looking diploma. Responsible estate planning experts or attorneys in general do not go door-to-door soliciting clients. No matter a person’s flashy title or apparently sterling credentials, always follow up on the claims of your potential new “trust advisor.” Ask for references, check for diplomas, transcripts, and bar admittance. Contact state authorities to ensure that your representative is certified, trained, and qualified.
• It’s especially important to be aware of what’s necessary for your state regarding estate planning. A one size fits all “estate planning kit” is usually not the best option for your needs.
• Ask for detailed information about potential tax impacts, transfer penalties, or early withdrawal costs. If your potential advisor glosses over this information, presents falsified documents, or becomes angry at your request for more details, that’s a red flag.
• If you are being pressured to sign away financial information, power of attorney, or pay major fees, especially before a deadline, slow the process down. Ask for a second opinion. If you feel ready to prepare a living trust fund or will, ask trusted friends or family members for recommendations. Bring your potential beneficiaries into the conversation and ensure that they are also part of the process.
• Predators may attempt to sell you fake annuities, certificates of deposit, bonds, insurance policies, stocks, or other financial products. If the conversation keeps turning from your options in distributing your assets to spending them, be careful.

How Can You Protect Yourself & Your Assets?

Ask for, and keep, copies of each document pertaining to the transaction. Letting your beneficiaries know of your plans and engaging a trusted and qualified legal team to deploy them, is essential.

For example, if your family is aware that you have already made final arrangements, they won’t be taken in by someone who claims it’s necessary to start all over again. Communication is key—between you and your potential preparer, between you and your beneficiaries, and between you and those who can offer trusted advice and second opinions.

Your state’s Department of Consumer Affairs or Department of Consumer Protection will have information about cancellation rights. In the event you suspect you have been defrauded, contact authorities immediately. Keep local law enforcement involved.

On the national level, you may find assistance from the State Unfair and Deceptive Acts and Practices Statutes (UDAP) or the Federal Trade Commission.