6 Tips to Avoid Trust Scams

Dec 16, 2020

Hello all,

I am attorney Margaret Webb of Legacy Legal & Business Services PLC. It is hard to believe that I just began working on my 16th year of practice. One of my main areas of practice is estate planning and I have seen my fair share of Estate Planning Fraud and Trust Mills. When thinking back over my experience, I have compiled some tips that I thought you would find helpful:

1) Do not be pressured into a trust on an in-home sales pitch; Now if you are or your loved one is not able to get out of the house it is certainly appropriate to invite an attorney to your house, but when the attorney or sales agent invites their self to your home then that should be a red flag.

2) The situation is suspect for trust scams if the person is selling annuities as well as trust packages as they are making money on both; Early in my career, I had an elderly woman fall for one of these type scenarios and we had to go to court to have an irrevocable trust revoked. This is no easy feat as you have to prove fraud which is a tough legal stringent, fortunately for her we were able to do so.

3) A sales agent cannot give legal advice. Only a lawyer is licensed to give legal advice. Do not take for granted that a specific type of estate plan is right for you if the person recommending a specific trust is not even an attorney.

4) Beware of a one-size fits all trust packages. There are many different trust options that could be appropriate depending on a person's specific circumstances. If you are are a family farmer it may look as though you make a modest living, that is until you find out the value of the farm is worth several million dollars. Estate Planning takes several things into consideration, so its important to trust good legal counsel.

5) Make sure the attorney you choose to work with is local to your residence. I cannot tell you how many times I have seen attorneys come from across the state to sell trust packages only to find out the trust package was not legally executed because the attorney needed the clients to sign in front of two witnesses and a notary.

6) A simple Probate Avoidance Trust package should not cost more than $2,000.00 in Michigan in my opinion. I once had a client that retained an attorney for a trust package and the attorney was supposed to enroll her in an elder program. She was going to be charged nearly $40,000.00. She never qualified for the program and the trust she received was a simple probate avoidance trust. The attorney later waived the remaining $35,000.00 that was due and owing, but only if the client waived any possibility of litigation against the attorney. The client ended up doing this so that we could examine the records to make sure she was adequately protected. Upon examination of the trust that she paid $5,000.00 for that trust that was comparable to the trusts that we do for $1,500.00.

It is important to be careful when choosing the right estate planning attorney, but now that you are armed with knowledge do not delay in completing your estate plan.

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