What Are Living Trust Scams
A. Living Trusts As you know, a living trust is a legal plan where an individual, called the”grantor, “places his possessions into a trust during his lifetime. The trust is administered by a “trustee” for the advantage of the trust’s beneficiaries. The grantor may be a trustee and a beneficiary of the trust. Living trusts are an extensively recognized and genuine estate planning device. Since possessions transferred to the trust are not owned by the grantor, at the grantor’s death, the properties are not part of the grantor’s estate and do not need to be probated. Accordingly, a living trust can avoid exactly what could be a costly, lengthy process. Whether or not this is a significant benefit varies by the size of the estate and by state and area; for little estates, lots of states have a casual probate process that reduces cost and delay. Whether a living trust is a proper estate preparation tool depends upon a person’s circumstances and objectives, and state laws.
B. Scams Involving Living Trusts
Misinformation and misconception about probate and estate taxes supply a ripe environment for scammer to take advantage of older consumers’ fears that their estates will be eaten up by costs, which distribution of their properties to enjoyed ones will be long delayed. Some unethical services market seminars on living trusts or send postcards welcoming customers to call for at home appointments, ostensibly to find out whether a living trust is right for them. A typical practice is to significantly exaggerate the benefits of living trusts and wrongly claim that locally-licensed attorneys will prepare the documents. In some circumstances, customers send out loan for living trust packages but get absolutely nothing. In others, the offer of estate planning services is merely a ploy to gain access to consumers’ monetary info and to sell them other financial items, such as insurance annuities. These practices may violate federal securities laws, in addition to other laws.
Many state Lawyer General and other authorities, such as disciplinary or grievance committees of state or city bar associations, have taken enforcement actions against living trust scam artists. Some cases have actually been brought under state Unfair and Deceptive Acts and Practices laws. Others have actually been prosecuted as the unauthorized practice of law because the salesmen were not lawyers. Even in instances where there may be some lawyer evaluation, it might be insufficient to render the activity legal. The U.S. Securities and Exchange Commission likewise has actually prosecuted companies professing to use estate preparation services, such as living trusts, for violating the securities laws through deceptive investment schemes targeting elderly people.