As you know, a living trust is a legal plan where an individual, called the “grantor,” places his possessions into a trust during his lifetime. The trust is administered by a “trustee” for the benefit of the trust’s recipients. Living trusts are a widely recognized and legitimate estate planning gadget.
B. Scams Involving Living Trusts
Misinformation and misconception about probate and estate taxes offer a ripe environment for scammer to prey on older consumers’ fears that their estates will be eaten up by expenses, which distribution of their possessions to enjoyed ones will be long delayed. Some unethical businesses promote seminars on living trusts or send postcards welcoming customers to require at home consultations, seemingly to learn whether a living trust is ideal for them. A typical practice is to considerably exaggerate the advantages of living trusts and wrongly claim that locally-licensed lawyers will prepare the files. In some circumstances, customers send out money for living trust packages however receive absolutely nothing. In others, the offer of estate preparation services is merely a ploy to get to consumers’ monetary details and to sell them other financial items, such as insurance coverage annuities. These practices might breach federal securities laws, along with other laws.
Many state Attorney Generals and other authorities, such as disciplinary or complaint committees of state or city bar associations, have actually taken enforcement actions against living trust rip-off artists. The U.S. Securities and Exchange Commission likewise has actually prosecuted companies claiming to provide estate preparation services, such as living trusts, for violating the securities laws through deceptive financial investment schemes targeting senior citizens.