Beware of Living Trust Scams Advisory

Written By: Attorney Jeffrey A. Marshall, CELA*  

Originally Published on July 30, 2001

For years The Elder Law Firm of Marshall, Parker & Associates' has been warning the public about numerous "Living Trust" scams that have been circulating in Pennsylvania. Recently seniors in Pennsylvania have been deluged with offers of free seminars promoting living trusts and other "estate protection" devices. Many of these seminars are being conducted by non-lawyers who may represent themselves as being "certified" or having some other special expertise or concern for the elderly. Seniors may be invited to a free "estate planning workshop" including breakfast or lunch at a local restaurant. The workshops end up being no more than slick  sales presentations in which living trusts and annuities are touted with false claims of death tax avoidance, protection of assets from nursing home costs, or inaccurate descriptions of the probate process. Consumers who make the mistake of signing up for more information are signing up for a high-pressure salesman to visit their homes.

The living trust and estate planning scams have become so much of a problem that the Pennsylvania Attorney General's office Bureau of Consumer Protection has issued a "Consumer Advisory" on the subject.

The scams described in the Attorney General's Consumer Advisory are prevalent throughout Pennsylvania. Our seniors are losing many thousands of dollars to these scams. Seniors who are approached by non-lawyers selling living trusts should consult with a trustworthy local attorney who is knowledgeable in estate planning and elder law before signing any contract or writing a check.

Here is the Attorney General's Consumer Advisory:

CONSUMER ADVISORY by Attorney General Mike Fisher

Beware of Living Trust Scams
Planning in advance for the distribution of assets at death is a good idea. While there are many ways to do this, in order to make the right decision the smart consumer needs to explore every option and consider the type of estate planning that's appropriate for them. One device is a living trust which is a trust set up during a person's lifetime. This may be a good idea for some, but not for others. Most importantly, keep in mind that when considering your estate planning needs, your interests may best be met by consulting with an attorney.

The Scams:
Unfortunately, when it comes to living trusts, unscrupulous con artists are ready to play on consumers' fears of the unknown. In some cases, consumers--mostly elderly--are solicited by phone or mail to attend seminars or to set up in-home appointments to discuss living trusts. Living trusts are then marketed through high-pressure sales pitches, which prey on the fear that assets will be tied up indefinitely or that estates are prone to heavy taxes and fees if a living trust is not in place. Con artists often rely on unfamiliar terms such as "probate" and "executor" to convince consumers that a living trust is right for them even though many of the complex rules and fees that can complicate estate distributions do not exist in Pennsylvania.

Sometimes victims are sold worthless "kits," costing several thousand dollars, which are nothing, more than standard forms that may or may not be valid, as laws concerning living trusts vary from state to state. In other cases, false promoters simply want to gain access to consumers' financial information so they can sell them other products, like insurance annuities.

The Facts: To avoid being taken advantage of by these con artists, keep the following tips in mind:
Shop around. Check out offers with a trusted attorney or estate planner.
Be certain a living trust is the best option for your situation.
Never sign anything containing options or terminology you don't understand.
Do not give in to high-pressure sales tactics. Legitimate offers will be around long enough for you to properly research them.
Always check out offers from telephone solicitors or door-to-door sales people.
Make sure you have the option of updating your trust periodically. Understand how this is done and be aware of any costs incurred to do so.
Beware of anyone portraying living trusts as being a solution for estate planning.
Verify any stated affiliation or endorsement by a government agency or senior association.
The Cooling Off Rule states that if you buy a living trust in your home or somewhere other than the seller's permanent place of business (like a hotel seminar), you have three business days to cancel the deal.

If you have any questions, or want to file a complaint, call the Attorney General's Bureau of Consumer Protection hotline: 1-800-441-2555, or visit our website at www.attorneygeneral.gov.

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