What Are Living Trust Rip-offs
A. Living Trusts
As you may know, living trusts are legal arrangements where a person, called the “grantor,” positions his possessions into a trust throughout his lifetime. The trust is provided by a “trustee” for the advantage of the trust’s beneficiaries. The grantor, also called a trustor, may be a trustee and a beneficiary of the trust. Living trusts are an extensively acknowledged and legitimate estate planning devices. Since the grantor no longer holds assets transferred to the trust, at the grantor’s death, his or her possessions are not part of the grantor’s estate and do not have to be probated. Accordingly, a living trust can avoid exactly what might be a costly, prolonged process. Whether this is a significant benefit differs by the size of the estate and by state and area; for small estates, lots of states have an informal probate procedure that decreases cost and hold-up. Whether a revocable living trust is the right estate planning devise for you depends upon a person’s goals.
B. Scams Involving Living Trusts
Misunderstanding and false information about probate and estate taxes supply a ripe environment for scammers to take advantage of older customers’ fears that their estates will be consumed by expenses, or that distribution of their estate to loved ones will be long postponed. Some unethical businesses promote workshops on living trusts or send postcards welcoming consumers to call for in-home appointments, seemingly to find out whether a living trust works for them. A typical practice is to greatly overemphasize the benefits of living trusts and wrongly assert that locally-licensed attorneys will prepare the files. In some instances, customers send cash for living trust kits, however, get absolutely nothing. In others, the offer of estate planning services is simply a ploy to access to customers’ financial info and to offer them other financial items, such as insurance or annuities. These practices might violate securities laws, along with other laws.
Some state Attorneys General and other authorities, such as corrective or complaint committees of state or city bar associations, have actually taken enforcement actions against living trust scammer. Some cases have been brought under state Unfair and Deceptive Acts and Practices laws. Because the salespeople were not lawyers, others have been prosecuted under the unauthorized practice of law. Even in instances where there might be some lawyer evaluation, it may be inadequate to render the activity legal. The United State Securities and Exchange Commission likewise has prosecuted businesses claiming to provide estate planning services, such as living trusts, for breaching the securities laws through fraudulent investment plans targeting elderly people.
As you now understand, a living trust is a legal arrangement where the grantor places his possessions into a trust during his lifetime. The trust management is provided by a “trustee” for the benefit of the trust’s recipients. Some unscrupulous companies promote workshops on living trusts or send out postcards welcoming consumers to call for in-home consultations, seemingly to discover whether a living trust is right for them. The U.S. Securities and Exchange Commission likewise has prosecuted business purporting to provide estate preparation services, such as trusts, for violating the securities laws through fraudulent investment plans targeting senior citizens.
So when looking to set up your own living trust, make sure to find a lawyer that specializes in estate planning who you can trust.