Unfortunately, the elderly are a frequent target of dishonest companies and individuals who attempt to capitalize on seniors’ financial fears. Many of these companies sell trusts and annuities that end up harming a senior’s finances instead of improving or preserving them.
Although not all of these companies are “scams,” many of them sell products and services that are unnecessary or ill-suited for a particular senior’s financial situation and estate planning needs.
Living Trust Mills
Properly prepared, a living trust can be an extremely effective estate planning tool. A living trust is created while the trust maker is still living and allows the maker to transfer assets into the trust’s name. When the trust maker passes away, the trust’s beneficiaries receive distributions without the necessity of probate.
So-called “trust mills” use boilerplate forms to create one-size-fits-all living trusts that don’t address the specific needs, goals, and wishes of the trust maker. Frequently, these unscrupulous companies create trusts for seniors without explaining how the trust works. In the most egregious cases, the trust mill is just a way to pressure seniors into placing money into unstable investments, such as expensive annuities.
There are many reputable companies and financial institutions that offer annuities. Unfortunately, there are also fraudulent companies that lure the elderly into bad annuity insurance investments. In many cases, these companies offer free seminars or “gifts” to capture the victim’s interest. They convince the person to invest in a high-cost, long-term annuity that charges an exorbitant penalty for cashing out. At the same time, the agent who sells the annuity receives a large commission.
Seniors aren’t the only demographic targeted by trust mills and annuity scams, but they are particularly vulnerable because they tend to have substantial assets and may worry about having enough assets to last throughout their lifetimes. Avoid becoming a victim by always speaking to an estate planning attorney before making an investment or creating an estate planning document.
Minnesota Estate Planning and Probate Law Firm
Call the Minnesota probate and estate planning attorneys at Jeffrey P. Scott & Associates, LLC today our office today to learn more and to discuss your options.
This website has been prepared by Jeffrey P. Scott & Associates, LLC for informational purposes only and does not, and is not intended to, constitute legal advice. The information is not provided in the course of an attorney-client relationship and is not intended to substitute for legal advice from an attorney licensed in your jurisdiction.