Imagine spending thousands of dollars on an estate plan to protect loved ones, to find that no true protection exists. Unfortunately, this occurs on a regular basis. In fact, millions fall prey to estate planning scams each year. According to a report conducted by the U.S. Consumer Financial Protection Bureau of people ages 50 and over, victims of financial fraud lose an average $34,200 to unscrupulous scammers.
Estate Planning Scams
In some instances, the victims discover the schemes before they die. If they lose money, the victim may be able to amend and validate legal documents. Unfortunately, many individuals fail to discover the scam in time. As a result, grieving family members further suffer when they discover the scam. To avoid falling prey to estate planning fraud, identify different forms that it may take. Also, consider the signs to identify, and the steps to take when seeking competent estate planning counsel.
Targeted Victims
Scammers target adults aged 50 and over for estate planning scams. Older adults may be more susceptible to these schemes due to a variety of reasons:
- They own more assets than those in subsequent generations.
- Death becomes increasingly more likely with age.
- They may experience biological changes which impact decision-making ability.
- Unfamiliar with the estate planning process, some victims fail to identify deviations from truthful and normal practices.
False Flags
Scammers often prey upon the fears of older individuals by creating unnecessary anxiety. The scammer paints a wildly exaggerated picture of the risks the victim may face if they choose not to work with the scammer. For example, they may mention a substantial “death tax.” The scammer may also represent that they offer the only possible solutions. The doom and gloom messaging matches the heroic trust product offerings. This leaves the victim feeling as though they have no choice but to purchase the solutions.
Types of Estate Planning Scams
Estate planning scams vary in delivery, outcome, timeline, and approach. However, trust mills are the most common form of such a scam. Compromised of non-lawyers, trust mills create a low-cost trust. Then, they replicate it over and over again for unsuspecting victims. The problem is that the trusts provide little to no customization. So they fail to protect senior consumers. Therefore, the main objective with most trust mill operations is to gain access to information about the individual’s accounts and property. Once they acquire the information, they offer additional financial products. As a result, the salesperson earns a hefty commission for each additional product sold.
How to Avoid Scams
To avoid victimization, follow these steps:
- Investigate Direct Solicitations
Perpetrators of estate planning schemes often solicit directly. They use slick presentations, mailers, door-to-door sales, and telemarketing. These companies adopt legitimate sounding names which can easily be confused with more established organizations like AARP. Therefore, if someone other than a licensed estate attorney contacts you regarding your estate plan, question the solicitation. Search for the company online. Verify its reputation and the type of work they have completed. - Ask about qualifications
Feel comfortable asking any service provider about their professional qualifications. First, find out whether the individual is an estate planning attorney. Most scammers are not licensed attorneys. Some may say that they act as advisors or consultants. Or they may say they are associated with an attorney or law firm. A fraudulent individual lacks legal experience and credentials. They will continue to try to provide a legal solution. Then, they will upsell with insurance or an annuity. Make sure you are speaking with a vetted and experienced estate planning attorney. - Be Cautious
Contact local law enforcement officials if you suspect fraudulent activity. You can also contact the national fraud hotline at 1-800-876-7060 to log your concerns. Also, get help so you can avoid further involvement with fraudulent organizations.
We Can Help
We know how to help you navigate the various options that exist for your situation. So, you can design an estate plan that actually protects you and your loved ones. Also, schedule a call with our office today. Scammers sell additional products to swindle older people. Many invest in items with little pay-off that provide ridiculous commissions for sales agents and fraudsters. Be cautious of trusts described as “pure,” “constitutional trusts,” or “pure equity trusts.” Also, understand the use of instruments such as promissory notes.
About Skvarna Law in Glendora and Upland, California
Skvarna Law Firm operates offices in Glendora and Upland, California. We provide legal services. We cover San Bernardino, Los Angeles, Orange, and Riverside Counties. This includes several cities. Upland, Ontario, Rancho Cucamonga, Fontana, Colton, Rialto, Chino, Chino Hills, Glendora, Claremont, Pomona, La Verne, Montclair, San Dimas, Azusa, Covina, West Covina, Diamond Bar, Walnut, La Puente, Corona, Norco & Mira Loma. Visit SkvarnaLaw.com to learn more.
