Beware of "Living Trust Mills"

I try my best to keep an ear to the estate planning blogosphere, and one of the more recent issues in the world of estate planning is the surfacing of "living trust mills".  The loose definition is an organization that markets revocable living trusts (usually by way of a lunch or dinner seminar at a nice restaurant) and tries to convince the public that living trusts are documents that virtually everyone needs and purposely misrepresents how estate tax and the probate courts operate in order to make living trusts more appealing.  The result is people (usually seniors) spending four-figure amounts on estate planning documents that they don't actually need.

The growth of these mills are evident in recent class action lawsuits initiated by clients who claim that they were misled when they purchased living trusts.  And Kudo's to Florida estate planning attorney, David M. Goldman for listing recent articles on these scams.   

I have posted on the danger that financial predators pose for our elderly population, but it's deeply saddening to learn how prevalent such predators have become in my own industry. 

I will throw my two cents into the blogosphere discussion by saying that there certainly are a lot of people who could benefit greatly from living trusts, specifically if the focus is avoiding the probate process.  But I would argue that they are not documents that everyone needs.  Perhaps these living trust marketers genuinely believe that living trusts should be as widespread as living wills. But I don't agree, particularly since trusts are much more expensive than wills and require much more leg-work in regards to re-titling assets into the name of the trust.  And I don't believe in counseling my clients to take on the added expense and hassle if they truly don't need to do so.

So...if you do attend one of those living trust seminars, I strongly recommend that you look into the background and experience of the presenters and be very wary of anyone claiming that there is a universal need for living trusts.

Comments

[Susan Cartier Liebel]

This may explain some vulnerability on the part of the elderly to be susceptible to bad investments:

http://www.nytimes.com/2008/01/29/health/research/29agin.html?_r=1&ex=1359435600&en=d142a582fa34ab44&ei=5088&partner=rssnyt&emc=rss&oref=slogin

[Greg Kish]

Great post. I linked to it from our blog. http://michiganelderlaw.blogspot.com/

Thank you,

Greg Kish