How many times have you opened the newspaper and a flyer falls out that advertises a “free living trust seminar"? They often offer a free breakfast or lunch and hold the meetings at a local restaurant.
In California, these seminars are often organized by non-attorneys whose primary purpose is to sell a living trust to everyone who attends (regardless of whether a trust is needed), and to follow-up with the sale of annuities to the attendees. These are high-pressured events with many follow-up telephone calls to each attendee who declines to purchase the trust package after receiving the free breakfast or lunch.
There is no free lunch. The organizers have spent money to purchase the newspaper advertisement, rent the meeting room, and pay for the meals. They need to recoup their investment and make a profit. Thus, they put the fear of God into each attendee by making them believe that they must have a trust or else their home and life savings are in jeopardy.
To avoid the accusation that they are practicing law without a license, they often contract with an attorney who is to “supervise" the creation of the trust. In reality, that attorney never speaks or meets with the clients, but did develop a checklist that the non-attorneys can follow in order to create a boilerplate trust document.
Not everyone needs a trust. The two primary purposes to establish a trust are for tax avoidance (where the estate is substantial) and to transfer title to property in order to avoid having to “probate" an estate. When these two goals are not involved, a trust may not be necessary. Again, the organizers of these seminars are not concerned with whether or not you need a trust. Their goal is to make a profit.
Many times, after a trust package has been sold at one of these free seminars, the so-called estate planning representative then makes a visit to the elderly couple in order to review the trust and obtain the required signatures. However, that representative also has an ulterior motive. That person is now armed with all of the elderly couple's financial information (remember - there is no attorney-client confidential relationship) and makes a sales pitch to sell them an annuity. The annuity may not be at all appropriate as a financial investment for the elderly couple; however, the annuity salesperson doesn't care because s/he will stand to make a hefty commission on the sale.
This sort of high-pressured sales tactic continues to be used against unsuspecting senior citizens who thought they were simply going to spend an hour or so at a free lunch in order to gather general information about living trusts. They had no idea that they would be pressured into not only purchasing a trust package, but then investing their life savings into an annuity that makes no financial sense to them but does line the pocket of an unscrupulous annuity salesman.
My advice: Remember that there is no such thing as a “free lunch". If you think that a trust may be beneficial to you and your family, then contact an attorney, schedule a free consultation, and bring along your spouse or other trusted loved one. Avoid the “trust mill" scams at all costs.
George F. Dickerman is an elder law attorney in Riverside County, California, practicing law for 23 years. To learn more about elder law issues, including living trusts, and to subscribe to a free newsletter that provides valuable information on how to assist your family members or loved ones, please visit http://Elder-Law-Advocate.com/