You create an estate plan to protect your assets and your heirs – but what if you end up being scammed in the process? Unfortunately, there are some bad actors out there, and many of them would love to get their hands on a person’s life savings. Watch out for these fraudulent estate planning scams.
Living Trust Mill Scams
Living trusts can be a very practical estate planning tool, depending on the individual’s specific circumstances. However, the National Consumer Law Center (NCLC) has warned about scams involving living trust mills.
In this scheme, trust mill operators will try to pressure people into paying for a living trust whether or not it is actually needed. These scams often use exaggerated claims and scare tactics, and the perpetrators may adopt names that are easy to confuse with the names of trusted organizations.
Some people have turned to DIY estate planning tools as an easy and affordable option. However, estate planning is a very complicated legal area, and DIY estate plans may result in bigger problems down the line, especially if your situation involves any complexities. This does not mean that all DIY estate planning options are scams – but some may be.
For example, the NCLC’s warning about living trust scams includes a section on self-help living trust kits that do not provide consumers with the information or tools they need to handle their estates properly.
Seniors are frequently targeted by scammers. According to the FBI, seniors lose approximately $3 billion every year.
Elder fraud can take many forms, but some scammers may try to earn the senior’s trust and seize control of their finances. For example, family and caregiver scams, in which relatives or acquaintances try to take advantage of a senior, are common.
Scammers may also create fake estate planning companies and target seniors with their services. These companies may sell wills that, at best, are not tailored to the individual’s needs, and at worst, aren’t legally binding. Trust mill scams often target the elderly.
Tips for Avoiding Scams
With a little caution, you can avoid many estate planning scams.
- Don’t sign a contract without understanding the terms. If an estate planner tries to pressure you into signing quickly, consider it a red flag.
- Watch out for deals that are too good to be true. If a company tries to sell you a will, living trust or other estate planning document for a price that is much lower than normal, it might mean that the estate planning documents use a one-size-fits-all approach that may not, in fact, fit your needs at all. Remember, you often get what you pay for.
- Go with an estate attorney you can trust. Check reviews before you meet with an attorney and listen to your gut. If you’re uncomfortable, go somewhere else.
- Remember that scammers love to target the elderly. Watch out for the elderly people in your life. The Department of Justice has information on reporting fraud.
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