Virginia Elder Law

Monday, November 19, 2018

SENIOR SCAM ALERT: Avoiding 'Trust Mill' Scams

This past week our offices received a flurry of calls pertaining to a seminar held in the Martinsville area recently given by an out-of-state company, extolling the virtues of incorporating Revocable Living Trusts into your family's Estate Plans.

The truth of the matter is, not everyone needs a trust! Furthermore, a Revocable Living Trust does NOTHING to protect assets in the case of someone going to a nursing home, or in regards to their long-term care expenses later on. In fact, it may even complicate Asset Protection/Medicaid Planning in a crisis situation! It is best to have a full understanding of the short and long-term consequences of that type of trust before proceeding.

How many times have you opened the newspaper and you see an ad or a flyer falls out that advertises a “free living trust seminar”? Or perhaps you received a slickly-printed invitation to this type of seminar in the mail. They often offer a free breakfast or lunch and hold these meetings at a local restaurant, or hotel or event center in many cases.These seminars are often organized by non-attorneys whose primary purpose is to sell a living trust to everyone who attends (regardless of whether a trust is needed), and to follow-up with the sale of annuities to the attendees. These are high-pressured events similar to how time-shares are sold with many follow-up telephone calls to each attendee who declines to purchase the trust package after receiving the free breakfast or lunch.

Make no mistake: There is no free lunch.  There are lots of hidden costs here: The organizers of these events have spent money to design and purchase print materials for mailings as well as the actual mailing costs, newspaper advertisements, rent the meeting room, and pay for the travel of their representatives as well as these often elaborate meals for each attendee. They need to recoup their investment and make a profit. Thus, they aim to put the fear of God into each attendee by making them believe that they must have a trust at all costs or else their home and life savings are in dire jeopardy!

To avoid the accusation that they are practicing law without a license, they often contract with an attorney (and often these attorneys are from out-of-state to further compound matters) who may not be completely familiar with the Elder Law regulations in place with the state of the seminar being given in) who is to “supervise” the creation of the trust. In reality, that attorney never actually speaks or meets with the clients, but did develop a checklist that the non-attorneys can follow in order to create a ‘boilerplate’ trust document.

It bears repeating: Not everyone needs a trust. The two primary purposes to establish a trust are for tax avoidance (where the estate is highly substantial) and to transfer title to property in order to avoid having to “probate” an estate. When these two goals are not involved, a trust may not be necessary. Again, the organizers of these seminars are not concerned with whether or not you truly need a trust. Their goal is to make a profit.

Many times, after a trust package has been sold at one of these free seminars, the so-called estate planning representative then makes a visit to the elderly couple in order to review the trust and obtain the required signatures. However, that representative also has an ulterior motive. That person is now armed with all of the elderly couple’s financial information (remember – there is no actual attorney-client confidential relationship in this case) and makes a sales pitch to sell them an annuity. The annuity may not be at all appropriate as a financial investment for the elderly couple; however, the annuity salesperson doesn’t care because s/he will stand to make a hefty commission on the sale.

This sort of high-pressured sales tactic continues to be used against unsuspecting senior citizens who thought they were simply going to spend an hour or so at a free lunch in order to gather general information about living trusts. They had no idea that they would be pressured into not only purchasing a trust package, but then investing their life savings into an annuity that makes no financial sense to them but does line the pocket of an unscrupulous annuity salesman.

Remember that there is no such thing as a “free lunch”. If you think that a trust may be beneficial to you and your family, then contact an attorney, schedule a consultation, and bring along your spouse or other trusted loved one with you. Avoid these sort of “trust mill” scams at all costs. Give us a call to talk to us about the right strategy for your family's estate planning situation!


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742 Main Street, Danville, VA 24541
| Phone: 855-503-5337 | 434-793-1555
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| Phone: 276-629-5381

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