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 Beware of trust mill scams!
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Why you should always hire a qualified estate planning attorney to prepare your estate plan
You've no doubt seen the ads in newspapers and heard them on the radio. Maybe you've seen them on the Internet. So-and-so company is offering a "free seminar" for seniors on creating a living trust. They'll even come to your home to fill out the paperwork.
Sound too good to be true? Maybe it is.
In 2007, the California Attorney General's Office shut down one such "trust mill," Family First Advanced Estate Planning,which along with several other defendants had to pay more than $7 million in civil penalties and fines.
Under the guise of helping set up living trusts, “These companies tricked senior citizens into buying annuities that
would not pay out for years and had substantial early withdrawal fees - investments that made no sense for elderly people,” said Attorney
General Edmund G. Brown Jr.
How can I be sure that a company offering living trusts is safe and qualified?
Ask for the name and California State Bar Number of the attorney who will be responsible for preparing or reviewing your trust. Then, call the State Bar at 1-800-843-9053, or check the State Bar website to make sure that the attorney is eligible to practice law and has no record of professional discipline. If possible, call the attorney directly to discuss your needs and concerns.
Never give out personal or financial information, such as Social Security numbers or bank account information, without verifying that a qualified attorney will handle your trust or will.
Never sign any documents without reading them carefully. Don't rely on oral statements by a representative of the company!
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Top reasons not to hire a "living trust mill" to prepare your estate plan
Your trust may not be created or reviewed by a licensed, qualified attorney.
Although the trust mill may claim that all legal documents are reviewed by an attorney, this may not be the case. Even if an attorney does review your documents, that attorney may not be a qualified estate planning attorney. If errors are made, your trust could later be declared invalid, thereby defeating your wishes as to how your property is to be distributed upon your death. Or, errors could have extremely expensive tax consequences to your estate. If this occurs, there may be no licensed or insured person or entity to make good the damage to your family and heirs.
A trust mill representative may try to sell you products besides an estate plan.
Moreover, many trust mill clients never actually meet with or talk to an attorney. Instead, they are shunted off to sales representatives whose main interest may be in earning a commission by signing you up. Or - as in the case of Family First - they may try to sell you other products, such as annuities or other financial products that are not appropriate for you and may actually worsen your financial situation. A licensed attorney is prohibited from engaging in such conduct and could be stripped of his or her license for doing so.
Trust mills are not bound to keep your financial information confidential.
A licensed attorney takes a solemn oath to never disclose your confidential information to anyone without your permission. Trust mills and their representatives are under no such duty. There are increasing numbers of instances in which trust mills have sold private client information to marketers for a profit.
More information:
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To locate a qualified estate planning attorney in your area, call your local Bar Association, or contact the California State Bar's Lawyer Referral Service.
The Law Office of Jane E. Bednar (831) 601-6381
The
Law Office of Jane E. Bednar offers knowledgeable, high-quality legal
representation to residents of Monterey, Salinas, Pacific Grove,
Carmel, Pebble Beach, Seaside, Carmel Valley, Big Sur, Marina, South
Monterey County, and San Benito County in the areas of personal injury,
elder abuse, professional malpractice, estate litigation, abusive mortgage practices, and defective
construction.
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