What Are Living Trust Frauds
A. Living Trusts As you understand, a living trust is a legal arrangement where a person, called the”grantor, “puts his assets into a trust throughout his life time. The trust is administered by a “trustee” for the benefit of the trust’s beneficiaries. The grantor might be a trustee and a beneficiary of the trust. Living trusts are an extensively acknowledged and legitimate estate planning device. Because possessions moved to the trust are no longer owned by the grantor, at the grantor’s death, the assets are not part of the grantor’s estate and do not need to be probated. Accordingly, a living trust can avoid exactly what might be a pricey, lengthy process. Whether this is a significant advantage varies by the size of the estate and by state and locality; for small estates, many states have a casual probate process that reduces cost and delay. Whether a living trust is a suitable estate preparation tool depends upon an individual’s circumstances and objectives, and state laws.
B. Scams Involving Living Trusts
Misinformation and misconception about probate and estate taxes offer a ripe environment for scammer to victimize older consumers’ fears that their estates will be eaten up by costs, which circulation of their possessions to enjoyed ones will be long postponed. Some unscrupulous organisations promote seminars on living trusts or send postcards welcoming customers to require in-home appointments, seemingly to find out whether a living trust is right for them. A typical practice is to greatly exaggerate the benefits of living trusts and wrongly declare that locally-licensed lawyers will prepare the documents. In some circumstances, consumers send loan for living trust kits however get absolutely nothing. In others, the deal of estate planning services is simply a ploy to get to consumers’ financial info and to sell them other financial items, such as insurance annuities. These practices might breach federal securities laws, as well as other laws.
Lots of state Lawyer General and other authorities, such as disciplinary or grievance committees of state or city bar associations, have taken enforcement actions against living trust scam artists. Some cases have been brought under state Unfair and Misleading Acts and Practices laws. Others have been prosecuted as the unauthorized practice of law due to the fact that the salesmen were not attorneys. Even in circumstances where there may be some attorney evaluation, it might be insufficient to render the activity legal. The United States Securities and Exchange Commission also has prosecuted companies claiming to provide estate planning services, such as living trusts, for breaking the securities laws through deceptive investment schemes targeting elderly people.