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Horizon Elder Law & Estate Planning Blog

Saturday, December 23, 2017

Best Practices in Avoiding Estate Planning Fraud

Your aging loved one has worked hard all her life, and now she wants to get her affairs in order so she can relax and enjoy her retirement, knowing her modest assets will go to her loved ones someday. She pays thousands of dollars for a beautifully packaged living trust, which she proudly places in her filing cabinet at home, with her other legal papers, insurance policies, and title documents.

She is blissfully ignorant of the fact that an unethical trust mill operator has duped her. To keep your elders from being victims like this, you can share with them these best practices to avoid estate-planning fraud.

The Top Five Ways to Spot and Avoid Estate Planning Fraud

When you see any of these five tactics, call in a trusted friend or relative before even continuing the conversation with the person trying to sell you an estate-planning product:

  1. A company uses a name that is similar to a respected organization, like the AARP, likely trying to fool people into thinking that the AARP approves of them.

  2. A salesperson pressures you to make a decision right away, or pushes a “limited time offer.”

  3. A stranger knocks on your door to sell you a trust. Remember that a legitimate estate planner will not have to sell his work door-to-door.

  4. The person uses scare tactics and makes wild claims that the state or the courts will take all your assets if you do not buy their product.

  5. They bombard you with phone calls, mailings, emails, flyers, and home visits.

What Can Go Wrong When Estate Planning Fraud Happens

The list of problems unethical so-called estate planners can cause is endless, but here are some of the more common scenarios:

  • The senior pays thousands of dollars for a living trust he does not need. For example, if he has modest assets and a very simple estate which he plans to leave to his surviving spouse and there are no special circumstances like a disabled child, he could have met his need with a simple will that would cost far less than a living trust.
  • The senior is taken advantage of by a trust mill operator, who sells the same document over and over, changing only the names and a few other minor details, yet charging people thousands of dollars each. The generic trust document is not tailored to the senior’s needs. The trust terms could even disqualify her for Medicaid benefits, increase the estate taxes, and decrease the value of her assets.
  • The living trust salesperson is not a lawyer and does not actually know estate law. As a result, he makes mistakes that create expensive problems for the elder, like giving the assets to the wrong people. And those thousands of dollars paid for the fancy-looking living trust package are wasted if the court invalidates the trust.
  • If the salesperson moves right on to the next sale after selling the senior the generic trust package, they likely did not transfer the aging person’s assets into the trust. Failure to transfer all your assets into the trust makes the document pointless, as the trust can only distribute assets it owns.
  • And then there are the identity thieves and other crooks who pretend to be estate planning experts. They collect your personal financial information and then use it to take out credit cards in your name. They have you sign a bunch of documents that are supposed to transfer your assets into the trust, but in reality, they transfer your property, investments, and bank accounts to themselves.

For competent and compassionate advice, talk to the professional elder law attorneys at Horizonlaw today by requesting a consultation.


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