Living Trust Mills
Last week I reviewed a trust done by an attorney who advertised in a local paper. He charged my client $5,000.00.
In his retainer agreement, the attorney indicated that he was using a "retired attorney" to do the work. This is code for never having passed the bar or resigned under suspicious circumstances. Upon further prodding, I found out that it was the former.
My client is a single retired 78 year old man worth $500,000.00. He has no children and no wife. This attorney who took $5,000.00 created a trust that was intended to hide his assets for Medi-cal.
"Why would you want to save his money to go into a nursing home bed I asked?" There are no children in his life to pass on his savings.
Another question:
"Why did the attorney give himself the power to appoint himself as the trustee? This is unethical as the attorney could and probably would engage in acts of self dealing.
Why would this attorney charge a man with this little money to his name (for his age) $5,000.00 for what should have been a simple document?
The answer lies in the truth about consumers. Most of you do not have enough information to make informed choices. Although this attorney was not part of a trust mill, in my opinion he lacked ethics.
Here are some WATCHDOG Tips:
- Living trust mills' sales agents are usually not attorneys and are not experts in estate planning.
- Watch out for companies that sell trusts and also try to sell annuities or other investments.
- Sales agents may fail to disclose possible adverse tax consequences or early withdrawal penalties that may be incurred when transferring stocks, bonds, certificates of deposit or other investments to annuities.
- An annuity is not 100% safe, and only a portion is guaranteed by the state. Insurance companies can and do fail, and their assets may not be enough to pay the full value of their customers' investments.
- So called "promissory notes" are not insured by the FDIC or any other government agency and may be very risky. They may not be registered as securities with the state.
As an estate planning attorney, I can help you decide if you need a living trust or other estate plan, or I can review whatever you have existing to make sure it is current with your wishes. Call or email me. 1 (888) 422-6070 susan@susanbgeffen.com.
Note: Consumers who feel they have been victimized by a living trust mill, annuity or promissory note fraud, should report it to the Consumer Fraud Section of their local district attorney and to the California Department of Insurance. Consumers can also file complaints online at the Attorney General's website.
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