Beware of "One Size Fits All" Estate Plans & "Free Lunch Seminars"
The Attorney General provides Consumer Alerts to inform the public of unfair,
misleading, or deceptive business practices, and to provide information and
guidance on other issues of concern. Consumer Alerts are not legal advice,
legal authority, or a binding legal opinion from the Department of Attorney
Beware of "One Size Fits All" Estate Plans &
"Free Lunch Seminars"
Misinformation about the cost and complexity of probate provides a golden
opportunity for sales pitches exploiting fears that life savings may be lost to
taxes, predatory probate attorneys, or distributed years after death because of
court delays. With laws curbing telemarketing sales calls, use of free lunch
seminars to pitch estate planning products have surged. Promoted as
"educational" programs, these seminars are commonly a sales job in disguise. Be
alert to seminars pushing "one size fits all" estate planning products,
including living trusts. A decision as important as estate planning should be
made with reliable, professional counsel who can help you decide what estate
plan is best for your own individual situation, rather than someone whose
primary interest is making a sale.
WHAT IS A LIVING TRUST?
revocable living trust is created for the purpose of holding ownership to an
individual's assets during the person's lifetime, and for distributing those
assets after death. It is called a "living trust" because it is created and
takes effect during the maker's lifetime, in contrast to a will, which does not
take effect until after the death of its maker. The individual who creates the
living trust (the grantor) gives control of his or her property to a trust,
which is administered by the "trustee" for the "beneficiary's" benefit. The
grantor, trustee and beneficiary may be the same person, with a successor
trustee named to distribute assets after death.
trust is a legitimate estate planning device that for some people can be a
useful and practical tool. But for others, it can be a waste of time and money,
and not appropriate to individual estate planning needs. Contrary to some sales
pitches, not everyone benefits from a living trust. Estate planning choices
should be discussed with experienced estate planning professionals, including
your attorney and financial planner.
TIPS TO REMEMBER ABOUT
FREE LUNCH SEMINARS
Never assume that a seminar is purely informational,
even if it is held in a public place such as a library or senior center.
Seminars are often designed to sell - either at the seminar itself or later
- with sign-in sheets often used to make future sales calls. Attending a
seminar may lead to a high pressure in-home sales pitch.
Seminar speakers may be biased in their 'estate
planning' recommendations. A seminar is commonly funded with the expectation that
the sponsor's products will be sold to attendees.
Seminar content and materials may be misleading,
with exaggerated claims about the length and cost of probate and the
purported advantages of living trusts.
"Experts" may misrepresent their qualifications.
The education, experience, and other requirements for receiving a "senior"
designation vary greatly and in some cases may be a marketing tool.
Product recommendations must be suitable for you.
Be wary of "one size fits all" recommendations.
TIPS TO HELP IN MAKING A
WISE DECISION BEFORE PURCHASING A LIVING TRUST
Do not be pressured into purchasing a trust based on the
in-home sales pitch of a salesman, or immediately following a seminar.
Before making any purchase decision, consult with an independent and
reliable professional with the necessary background to help you decide what
estate plan is best for your individual situation. If you already have a
lawyer, discuss the living trust offer with him or her before buying.
Do not take the word of a sales agent as to whether a
living trust is the best estate plan for you.
The selection of the appropriate estate plan for your circumstances should
not be based on the representations of a person whose primary interest is in
making a sale of his company's estate plan product, and who is not a lawyer
or reliable estate planning professional. If the sales agent says that the
purchase price will include consultation with an attorney, wait until after
the promised attorney consultation to select and pay for the estate plan.
Before buying a living trust from a stranger, call a
local lawyer and ask him or her what they charge for preparing trusts.
Often the price
is much higher than what a local lawyer would charge. Companies selling
living trusts rely on the public's apprehension that attorneys are costly.
Be wary if a trust salesperson promises specific results
or dollar savings. Costs of probate and attorney fees vary greatly from
state to state, and according to personal circumstances.
Check out trust company lawyers with the State Bar of
Michigan. If the
trust salesperson promises a lawyer will review the customer's documents,
demand the name of the lawyer and check with the State Bar of Michigan to
make certain the lawyer is licensed to practice in Michigan.
If the salesperson gives the impression that his or her
company or the living trust being sold is recommended or endorsed by AARP,
do not buy!
AARP does not endorse or recommend any living trust product at this time.
Do not give personal or confidential family and
financial information to a salesperson, even if the salesperson promises it
will be passed on to a licensed lawyer.
Meet with or discuss the matter with the lawyer personally.
Watch out for companies that sell trusts and also try to
sell annuities or other investment. Under the guise of setting up a living trust,
financial information disclosed to salespeople may be used to sell financial
products, such as annuities. In some instances, the real goal of the
living trust sale is to gain access to asset information in order that sales
agents can earn high commissions by "moving" existing investments into
others being sold by the living trust company.
If the salesperson says part of the trust cost will pay
the lawyer's fee, do not buy! A lawyer may not split a fee with the salesperson or
the trust company.
Discuss whether you can get your money back if you are
not satisfied, and get the promise in writing.
If you have already purchased a living trust without
personal consultation with an attorney, have the living trust document
reviewed by a reliable attorney.
Make sure that the living trust document will achieve your intended estate
planning goals. Unscrupulous living trust sales people may charge thousands
of dollars for what amounts to a set of pre-printed legal forms. In some
instances, because all consumers are sold the same package, the living trust
may be ill-suited or even contrary to individual estate planning needs.
To file a
complaint against a person or business that sells living trusts, Consumers may
contact the Attorney General's Consumer Protection Division at:
Consumer Protection Division
P.O. Box 30213
Lansing, MI 48909
Toll free: 877-765-8388
www.michigan.gov/ag (online complaint form)
complain about an attorney who is part of a living trust sales promotion, or
non-lawyers engaged in the unauthorized practice of law, please contact:
State Bar of Michigan
306 Townsend St.
Lansing, MI 48933