What Are Living Trust Scams
A. Living Trusts As you know, a living trust is a legal arrangement 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 recipient of the trust. Living trusts are a widely recognized and legitimate estate preparation device. Because possessions transferred to the trust are no longer 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. Appropriately, a living trust can prevent exactly what might be an expensive, lengthy process. Whether this is a significant benefit varies by the size of the estate and by state and area; for little estates, numerous states have an informal probate process that minimizes expense and delay. Whether a living trust is an appropriate estate planning tool relies on a person’s situations and objectives, and state laws.
B. Scams Involving Living Trusts
False information and misunderstanding about probate and estate taxes provide a ripe environment for scammer to victimize older consumers’ fears that their estates will be eaten up by expenses, and that circulation of their assets to liked ones will be long postponed. Some deceitful organisations advertise seminars on living trusts or send out postcards welcoming customers to require at home visits, ostensibly to find out whether a living trust is best for them. A typical practice is to significantly exaggerate the advantages of living trusts and incorrectly claim that locally-licensed lawyers will prepare the files. In some instances, consumers send cash for living trust packages but receive nothing. In others, the deal of estate planning services is merely a ploy to gain access to customers’ financial details and to sell them other financial items, such as insurance coverage annuities. These practices may break federal securities laws, in addition to other laws.
Many state Lawyer General and other authorities, such as disciplinary or complaint committees of state or city bar associations, have actually taken enforcement actions versus living trust scammer. Some cases have actually been brought under state Unfair and Misleading Acts and Practices laws. Others have actually been prosecuted as the unapproved practice of law since the salespeople were not legal representatives. Even in circumstances where there might be some attorney review, it might be insufficient to render the activity legal. The United States Securities and Exchange Commission also has actually prosecuted companies claiming to offer estate planning services, such as living trusts, for breaking the securities laws through fraudulent financial investment plans targeting seniors.