SCAM ALERT

LIVING TRUST / ANNUITY / AND PROMISSORY NOTE SCAMS

 

from State of California Attorney General Bill Lockyer

 

Living trust mills often solicit senior citizens by telephone, mail or seminars, offering “free” information about trusts, wills or taxes, or the need to update an existing trust.  According to Attorney General Lockyer, “These trust mills often violate a number of California laws.”  He continues, “To give their unlawful businesses legitimacy in the eyes of seniors, living trust mills may offer to do free seminars or other programs at senior centers, assisted living centers, churches or other places where seniors gather.”

 

How a Living Trust Mill Scheme Works

Sales agents, posing as expert estate or financial planners, often using bogus titles, such as “trust advisor”, “senior estate planner”, or “paralegal”, then schedule follow-up appointments after the seminars with seniors in their homes.  These agents are sales persons, not experts in estate planning, and they usually get paid high commissions on the trust packages and annuities that they sell.  Their goal is to sell their products, not protect the interests of the senior.

  Sales agents are not attorneys, but they may mention an attorney who supposedly prepares the trust and represents the senior’s interests.  An attorney may even appear at the seminar.  But most victims never have a private consultation with an attorney who is an expert in estate planning or who reviews with them the various options for estate planning and considers the senior’s desires and needs before a decision is made as to the type of estate plan needed.  Often seniors never even talk with an attorney, and the attorney does not directly supervise the sales agents’ activities.

  Under the guise of helping the seniors to set up or update a living trust, the sales agents find out about the seniors’ financial assets and investments.  Seniors rarely understand that the so-called expert they begin to trust is using the living trust as a means of selling them an investment to replace the investments they presently have.

  Usually, the sales agents schedule a second home visit to deliver a completed trust and have documents signed, title of assets transferred to the trust and various documents notarized.  Typically, the agents go over the assets to be placed in the trust and use that review to scare seniors into believing that their investments are unsafe and that by “moving” their money, they can earn higher interest with no risk.  These agents are often insurance agents who are really there to try to sell annuities.  The agents may also try to sell so-called promissory notes or other investments.  Agents may have the senior sign documents to transfer the senior’s CD, mutual fund accounts or other investments to these other investments.

  Documents, prepared by Living Trust Mill agents, may not comply with California law, or agents may not follow procedures set by law for executing or witnessing wills and other documents, which can make the documents subject to challenge.  Agents often misrepresent the value of a trust, the disadvantages of the senior’s current investments, and the advantages of the investments the agents are selling.

 

How to Avoid the Living Trust Mill Scam

Lockyer says, “Planning an estate involves important financial and personal decisions.  If wills, trusts, powers of attorney or other estate planning documents are not properly prepared or executed they can be invalid and cause lasting damage.”

 

What to Do If You Believe 

You May Already Have Been Victimized

Report it to your local district attorney and the California Department of Insurance OR call the Attorney General’s Public Inquiry Unit at 1-800-952-5225.  Consumer complaints may also be filed on-line at the Attorney General’s website at http://www.ag.ca.gov/consumers/general.htm

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