Planning For The ‘What-Ifs’

Legal Trust Scams Targeting Elderly and Vulnerable Arizonans

On Behalf of | Aug 11, 2022 | Probate Litigation

The Attorney General of Arizona, Terry Goddard, has issued an official notice to people across the state to be on the lookout for unscrupulous salespeople offering do-it-yourself living trust kits that are oftentimes both unnecessary and financially risky. At an average of $1,500 apiece, this is a very lucrative con for the scammers and a big loss for the victims.

The high volume of such living trust-type products has led the Attorney General’s office to deem them “mills,” a name indicative of a cookie-cutter approach that is focused on just pumping out sales. They have been popping up all over Arizona, fueled by job cuts, the loss of retirement/savings/investment funds in a volatile stock market, the national housing crisis and other valid financial concerns.

How Do These Scams Operate?

Like other snake oil salesmen throughout history, these self-proclaimed “certified trust advisors” and “estate planning experts” exalt the value of their living trust kits, positioning them as a cure-all for any estate planning concern a consumer could face. The kits are commonly sold in free informational seminars complete with bells, whistles, flashy props, bright lights and a high-pressure sales pitch. Living trust products are aimed at senior citizens who may fear that a lifetime worth of hard work will be lost to the whims of a strained economy, but these all-purpose kits only drain even more of those hard-earned funds.

What Are Living Trust Kits Supposed to Do?

On the surface, these kits look like a good idea – a great way to protect assets from undue tax burdens, loss caused by stock fluctuations or other reasons. To many people, they seem like the perfect solution – all their estate planning needs addressed in one tidy transaction with someone who is marketing himself as a specialist. Unfortunately, more often than not, these products are not helpful and are a poor solution to the customer’s financial needs. If a living trust or any other legal document is improperly drafted, it may put a substantial portion of a person’s estate at risk.

By using the tools provided in the kit (most often boilerplate forms and general information that could easily be found at little or no cost on the Internet or at a local library), the “trust advisor” (a title not actually recognized by the state of Arizona – the state does not regulate the sale of living trusts), upon receipt of a sizable fee, convinces the consumer to disclose detailed, private financial information that could possibly be used to sell other unnecessary estate planning or investment property in the future.

How Can You Avoid Being Scammed?

In spite of the convincing sales pitches and fancy-looking kits offered by these sellers, and the fact that these products might actually be a good fit for some consumers, the Attorney General’s office advises that you use caution if you are considering purchasing one. Taking a few simple steps now can not only help you determine if you need a living trust, but it may be able to save you hassles down the road trying to undo damage done by an improperly prepared one.

When thinking about buying a living trust “kit,” keep the following tips in mind:

  • Estate planning is not like clothing – be skeptical of a “one size fits all” product, especially if the salesperson offers guaranteed satisfaction; there are thousands of possible variables that a cookie-cutter document might not be able to handle
  • If the marketer of a living trust kit or other estate planning document is holding him or herself out as a “expert” or “certified specialist,” ask for documentation
  • Ask for a written estimate of any and all costs associated with the living trust kit you are considering. Will the purchase price include filing fees, mail expenses, notary fees, etc.?
  • Do a little math – could an attorney offer the same services at a comparable price? If so, then you would receive personalized service and the confidence that someone with in-depth knowledge of Arizona estate planning laws has drafted a comprehensive document for you.
  • Determine if a refund is offered if you determine that the product is not a good fit for you. If one is offered, ask for a written copy of the details.
  • Honestly assess your financial information; depending upon the size of your estate and any unique assets, you may or may not need a living trust – a simple will could suffice in some situations

If you or a loved one is considering implementing a living trust, take the Attorney General’s advice to heart, and seriously consider seeking the advice of a trained estate planning attorney before you purchase a kit or give confidential financial information to a stranger.