Don’t Put Your Trust in the Wrong Place
Whom can you trust when it comes to trusts? Not everyone. A reputable estate planning attorney will help you create an estate plan that’s unique to you, which may very well include a revocable living trust, charitable trust, or other helpful types of trusts depending on your wishes and needs. But not all trusts are necessary or useful. The National Consumer Law Center describes “trust mills” as dishonest salespeople who prey on seniors’ fears that after their deaths, their life savings and assets will be stolen by the government or wiped out through the probate process. The Federal Trade Commission and the AARP have both issued warnings about living trust promoters. Read on to learn more about the dangers of trust mills if you are looking to get into trusts.
The basic premise of a trust mill involves selling a generic living trust kit (generally for a significant price, but less than the cost of legitimate legal services) with no regard for whether an individual in fact needs multiple trusts, or any trust at all. The people selling these so-called trusts are typically sales agents working for an insurance company, not estate planning lawyers, and the trust is actually an investment in the insurance company, not a trust for estate planning purposes.
There is no such thing as a one-size-fits-all estate plan, but a trust mill is trying to sell you exactly that, with no real planning for the future involved. The agents’ main goal is to make a commission. They may call themselves “trust advisors” or “estate planners,” which is not true or accurate. They are not estate planning lawyers, and they are not able to produce legal documents. However, the living trust kit is pitched using legal advice. For example, an agent may say the trust is a way to avoid probate and estate taxes; however, the agent will avoid mentioning any negative tax consequences of transferring investments.
Once the trust mill/agent/insurance company has an individual’s trust and financial information, it will attempt to sell more financial products, such as annuities, reverse mortgages, and life insurance policies. Many seniors (or their loved ones after they pass) have found their estates greatly depleted after trusting a trust mill.
If you’re ready to plan your estate, call the Stephens | Domnitz | Meineke PLLC. Our Houston estate planning attorneys can help you choose the right tools to organize and transfer your assets, and we’ll prepare all the documents you need. Our firm provides estate planning services to clients throughout Harris County, TX.