What Are Living Trust Scams
A. Living Trusts As you know, a living trust is a legal plan where a person, called the”grantor, “puts his assets into a trust during his lifetime. The trust is administered by a “trustee” for the advantage of the trust’s beneficiaries. The grantor might be a trustee and a recipient of the trust. Living trusts are a widely acknowledged and genuine estate planning gadget. 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 have to be probated. Accordingly, a living trust can prevent what might be a costly, prolonged procedure. Whether or not this is a major advantage differs by the size of the estate and by state and locality; for small estates, many states have a casual probate procedure that minimizes cost and delay. Whether a living trust is a suitable estate planning tool depends upon a person’s scenarios and objectives, and state laws.
B. Scams Involving Living Trusts
Misinformation and misunderstanding about probate and estate taxes supply a ripe environment for scam artists to victimize older customers’ fears that their estates will be consumed by costs, which distribution of their assets to liked ones will be long postponed. Some unscrupulous services promote seminars on living trusts or send postcards welcoming consumers to require at home appointments, ostensibly to learn whether a living trust is best for them. A common practice is to considerably exaggerate the advantages of living trusts and incorrectly claim that locally-licensed lawyers will prepare the files. In some instances, customers send money for living trust kits however receive nothing. In others, the offer of estate preparation services is simply a ploy to gain access to consumers’ monetary details and to sell them other monetary products, such as insurance annuities. These practices might break federal securities laws, along with other laws.
Many state Attorneys General and other authorities, such as disciplinary or complaint committees of state or city bar associations, have actually 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 been prosecuted as the unapproved practice of law because the salespeople were not lawyers. Even in circumstances where there might be some lawyer review, it may be insufficient to render the activity legal. The United States Securities and Exchange Commission likewise has prosecuted business professing to provide estate planning services, such as living trusts, for breaching the securities laws through deceitful investment schemes targeting elderly people.