“Living-Trust Mills” and Seniors

Those working in the California insurance industry probably remember a shameful case several years ago involving so-called “living-trust mills”. That was an elaborate scheme that bilked hundreds of millions of dollars from seniors by having “experts” visit their homes, presenting themselves as professionals, to prepare trusts and other estate planning documents. Then these “experts”, having gained the seniors’ trust and personal financial information, would use that information against the seniors to convince them that their current financial holdings were unwise. They would persuade their victims to close out their holdings and to buy inappropriate annuities from these “expert” agents; a money making scheme without consequence to the interests of the duped seniors who lost their entire savings.

This problem is ongoing for seniors as scam artists have continued to operate under the guise of estate planning, and as attorneys, and they are willing to do anything to make a buck. The California Attorney General’s website says some get jobs at assisted living facilities or nursing homes, and even churches, to try to hook unwitting seniors with free seminars and presentations.

This problem is not exclusive to California. In 2009, the Ohio Supreme Court fined two California companies, American Family Prepaid Legal Corp. and Heritage Marketing and Insurance Services, Inc., $6.39 million for 3,800 counts of the unauthorized practice of law for selling revocable living trusts and annuities to elderly Ohio residents. The companies were also permanently barred from providing such services in Ohio.

These kinds of investments and annuities in themselves are not illegal, or necessarily bad for certain people. However, seniors often do not understand the details, which include surrender charges that make it very expensive to take money out in the first few years, meaning that seniors won’t have immediate access to their money if they need it. The fees can be hefty, and such investments are only as safe and secure as the company. These shadowy companies specifically target seniors because they don’t understand and are more easily persuaded, and that is why these actions are the subject of legal judgments and fines. Of course, it is always illegal to fraudulently pretend to be a professional that you are not, and often these companies use fake credentials to appear more legitimate and trick people into thinking they are lawyers or estate planners, etc.

If someone is presenting themselves as an estate planning attorney or other professional, ask for their information and education, and check with the Department of Insurance or the state bar association to see if their credentials are valid before deciding on any service they are selling. Often this is an easy thing to check, and usually these types of “professionals” are actually insurance agents trying to sell insurance a senior doesn’t need or other inappropriate financial services with high commissions for themselves.

San Francisco Insurance Lawyers
If you are being pressured into agreeing to either an annuity or other estate planning or on health or other insurance choices, contact an experienced insurance attorney in your area.