Don’t Be Conned Into Buying an Unnecessary Living Trust

How are con artists selling seniors unnecessary living trusts?

While a living trust can be an important tool in estate planning, it is not useful in all cases. A living trust serves as a substitute for a will, but, unlike a will, is not subject to probate. The advantages of this are that it is a more private document than a will and is less prone to being contested.

For whom are living trusts inappropriate?

As mentioned, living trusts are not always helpful. They are particularly inappropriate for senior citizens living on fixed incomes with limited assets. Nonetheless, there has been a recent increase in scam artists preying on the elderly by selling Living Trust Kits as if they were essential. These frauds are rounding up seniors by the boatload -- through public seminars and by phone, mail, and door-to-door solicitation -- in order to exploit their trust and naiveté.  In this way, too many unsuspecting seniors have been sold estate planning tools that they do not require and can ill afford.

Beware of High-Pressure Tactics

Scammers of all kinds use similar tactics. In this case, where seniors are the targets, the con artists typically approach their victims with teasers they believe will focus on the latter's vulnerabilities, such as:

  • Gifts
  • Companionship and friendship
  • Scare tactics exaggerating death taxes and legal fees

By convincing the seniors they victimize that they (the scam artists) are their friends and will protect them from passing financial hardship onto their inheritors, the unscrupulous sellers rob vulnerable seniors of what few assets they have.

According to the 2015 True Link Report on Elder Financial Abuse, this kind of exploitation is costing U.S. seniors $17 billion annually, since every $20 loss adds to an approximate annual loss of at least $2,000. This is because once scammers gain a senior's trust, they most often manipulate the victim into further financial missteps, such as purchasing additional annuities or unnecessary insurance policies.

How To Protect Yourself from Financial Scammers

In addition to being generally alert and wary of anyone who seems very friendly but is trying to sell you something, you can protect yourself from scam artists by:

  • Never signing any document that you don't fully understand
  • Not yielding to overly "friendly" gestures, such as gifts or repeated phone calls
  • Not giving in to the pressure of time-limited offers
  • Checking out any supposed affiliations to familiar organizations or government agencies (AARP for example, does not endorse any company that sells living trusts)
  • Be aware of your right under the Federal Trade Commission's "Cooling Off Rule" to cancel any purchase within 3 days if it was made anywhere but in the seller's permanent place of business

It is always wise to do your estate planning with an experienced, reputable estate planning attorney. Resisting the temptation of solicitations of fly-by-night unknown salespeople will keep you safe and protect your assets.

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