Living Trust Scams & How to Avoid Them

living-trustThe one segment of the population that fraud criminals love to prey on is the older generation, and this is because they are such easy targets. Dishonest people are always trying to prey on seniors and on their fears. One of the greatest concerns of older people is that of having their assets over-taxed, or stolen by the government, or lawyers after their death. This creates a great opportunity for scammers who try to sell seniors living trust scams.

Part of the problem lies in the fact that seniors are not knowledgeable in any type of estate planning. So, the best way to avoid living trust scams is to educate yourself on the different estate planning tools.

Let’s define a few terms for you: A Trust

This is a legal commitment between several people where one person is assigned as the trustee and controls the property given to them by someone else. This other person is known as the ‘trustor’, and the receivers of the trust are known as the beneficiaries. If the trust is assigned during the lifetime of the grantor, he usually serves as the trustee during their lifetime. Prior to passing away the Grantor names a successor in case of death or incompetence.

Dishonest living trust salespeople prey on seniors’ fears that after their deaths, their life savings and assets will be stolen by the government or by predatory probate attorneys. These salespeople use high-pressure tactics and deceptive claims to coerce vulnerable seniors into buying a product that many of them don’t need.

A living trust refers to a trust that is set up when the grantor is still living. The process begins when the grantor transfers everything into the trust and he/she can still change the arrangements of the trust while he is competent.

When deciding between a living trust and a will the senior must first take into consideration several things. First he must determine whether the estate is likely to be probated. Most states allow estates that are small to go through a quicker process and so the cost is much smaller. Most low income seniors will have their assets distributed out of probate.

There is more than one way to avoid probate costs and living trusts is just one of those ways. You can also own property in joint tenancy with a right of survivorship. This means the property goes on to the surviving owners.

Seniors who do decide they want a living trust must understand that setting one up may get expensive and it does take time. A living trust is more than just a written document and is not valid until the property is transferred into the person’s name. Even if there is a living trust set up, it is still suggested that a will be made.

The Living Trust Scam

As you can see a living trust is an involved process and someone that comes knocking on your door or sends you an email is not equipped to write a legal living trust. These sales are just a means to get your money and important information from you that could lead to identity theft.

Often these fraudulent companies will send emails that appear to be from legitimate organizations like the AARP. However these non-profit organizations often don’t sell or even endorse products like living trusts. Some companies even offer living trust kits, and the do it yourself method. Use logic to determine whether a kit can offer you enough information to set up something as complicated as a living trust, and you will probably find that a do it yourself kit will be highly inconclusive, and will lack a great deal of information. After all lawyers have to go through 7 to 8 years of schooling to learn all of this information.

Some scams are complete and utter scams while others offer some information though not enough, and the price for such information is very high. Some of these scams use this type of ruse to get your personal information so they can follow up with other fraudulent activities like identity theft. These companies advertise using slogans like, ‘great tax advantages to a living trust,’ ‘probate will take a large part of the real estate value’, etc.

Preventing the Living Trust Fraud

The best way to prevent this type of fraud is through education and common sense. Ask someone who is an expert, or a family member. Consult with an attorney, and be wary of unsolicited emails offering living trust set ups.  Sign up for identity credit monitoring to give you realtime alerts if your identity is stolen or fraud is committed.