With living trust scams on the rise both nationally and in Georgia, many seniors are being tricked into buying costly and unnecessary financial products which jeopardize their long-term security. As an elder law attorney in Marietta, I want to expose these scams for National Consumer Protection Week (ncpw.gov).
Preying on loneliness and a common fear of the unknown among seniors, scammers and unscrupulous salesmen in the US and in Georgia have found a new way to defraud seniors out of thousands of dollars: living trust scams.
March 6-12 is National Consumer Protection week and as a Marietta elder law attorney, I am taking this opportunity to warn seniors of these costly living trust scams in the metropolitan Atlanta area.
Don’t get me wrong: Living trusts can be an excellent estate planning tool to avoid probate and ensure your wishes are honored after death, but they are not a one-size-fits-all document and certainly not right for everyone – especially seniors on fixed incomes with limited assets.
Yet through public seminars, phone, mail and door-to-door campaigns, seniors are being contacted by salesman outside of the legal field who offer to living trusts as the solution to all of their fears and financial worries.
High-pressure tactics such as gifts, companionship and exaggerations about death taxes and probate are used to make seniors believe that their assets will be tied up in court indefinitely and that their loved ones will be on the hook for thousands of dollars in taxes and legal fees after their death.
What the salesmen fail to tell these seniors is that they probably won’t even owe estate or ‘death taxes’ after their passing. Worse is that many of these “trust kits” sold to seniors only contain boilerplate language and really do nothing to avoid taxes or the probate court. The real goal of the scam is to gain access to the senior’s financial information through the Trust Kit so they can be railroaded into buying additional annuities or insurance products the senior does not need.
According to an AARP study published in 2000, about four million people older than 50 with less than $25,000 in annual income may have purchased costly, unnecessary, and potentially dangerous living trusts as a result of high-pressure sales tactics by firms falsely representing themselves as AARP affiliates. These numbers will continue to grow as seniors remain fearful about growing taxes and their future financial security.
To avoid becoming the victim of a Trust Scam, seniors should always shop around and check with a qualified estate planning lawyer before deciding on any type of will, trust or financial product such as an annuity or long-term care insurance plan. I also recommend that seniors:
- Never sign anything with options or terminology that you don’t understand.
- Don’t give into high-pressure tactics such as gifts, nagging phone calls, and limited-time offers.
- Verify any stated affiliations with senior organizations or government agencies. (Note: due to the high rate of senior trust scams, the AARP does not endorse ANY company that sells living trusts.)
- Know your rights under the FTC’s “Cooling Off Rule”. If you purchase a living trust in your home or any place other than the seller’s permanent place of business (such as a hotel seminar), you have three business days to cancel the deal.
For additional tips on how to avoid financial scams for National Consumer Protection Week, visit the government’s official website at ncpw.gov.
As a sandwich generation kid himself, Steve (Stephen M.) Worrall KNOWS the struggles you are facing as you raise children, balance the demands of your job, and take care of your aging parents, too! You can reach him at 770-425-6060 or firstname.lastname@example.org.
Will and trust lawyers in Marietta see plenty of situations where parents who love their children are not entirely in love with their children’s spouses. This can make the estate planning process a little tricky, because the spouse can add tension and stir up drama that wouldn’t have been there otherwise. While some people include their sons-and-daughters-in-law in the planning process, it’s not all that unusual to leave them out.
For the most part, the son-in-law or daughter-in-law isn’t even mentioned in the will. They don’t really even have any legal standing to inherit from the parent unless they are specifically named. So, the parent would name his or her own child, but not the child’s spouse. If the adult child was no longer living, the property would probably end up being inherited by the grandchildren, rather than the spouse.
That’s not to say that a child’s spouse couldn’t end up with an inheritance. If the parents were to leave assets to the adult child and then the adult child passed away, his or her property would likely go to the spouse, and that includes what was inherited from the parents. One would hope that this property would eventually be passed on to the grandchildren (assuming there are grandchildren), but this is not a given, as the spouse would have the legal right to do whatever he or she wanted with it. In fact, if the spouse remarried, his or her new spouse would be the legal choice to inherit any property that was left behind, including that which was inherited this way.
So, can a Marietta will and trust lawyer keep your child’s spouse out of your plan entirely? Yes! You can work with your attorney to develop an inheritance trust that will protect any money you leave your kids from divorce, lawsuits, and creditors and keeps your money in the family.
Creating an estate plan can be emotional and having the additional drama of a difficult personality certainly won’t help matters any. On the other hand, you may absolutely adore your son-or-daughter-in-law and want to make sure that they are taken care of by your estate. In those cases, you will want to make sure that your Marietta GA estate planning lawyer specifically mentions them and what they are inheriting for your own peace of mind.
Residents of Georgia often find themselves procrastinating, even if they know the importance of meeting with a wills and trusts lawyer. The whole subject just seems so complicated, and there are certainly more enjoyable ways to spend one’s time then pondering death and taxes. The fact that things can be really confusing seems to give us all the encouragement we need to just tell ourselves that we’ll take care of the estate planning stuff “later.”
Of course, you know what I’m going to say next! You never know when “later” is going to make an appearance, and if you’re not set up in advance, all the legal advice about wills and trusts in the world won’t be of any help. Yes, this truly is something you need to do in advance. Perhaps demystifying some of the terms involved with wills and trusts will give you the confidence you need to take the next step.
Will vs. Living Will
Most people probably get that “will” and “living will” are two different things, but a whole lot of them couldn’t actually tell you what exactly makes them different. The term “will” is likely most familiar, as we’ve all seen them discussed on TV and in the movies. It’s that document that is used to tell the courts what should be done with a person’s assets after he or she dies.
In the movies, there’s usually a dramatic reading of the will with close-ups of shocked widows and angry siblings who have been unceremoniously cut out of the family fortune. While wills and trusts lawyers in Georgia do see their share of hurt feelings and miscommunications, things are rarely as dramatic as they are on the big (or small) screen.
While a will is used after death, a living will is not. It’s actually a document that includes a variety of instructions to be followed if you are alive but unable to speak for yourself for some reason. This is usually referred to as being “incapacitated.” You could be too ill to communicate, in a coma due to an accident, or some other variant that renders you unable to let doctors and others know what your wishes are regarding healthcare and other major decisions.
Trust vs. Living Trust
You may see a bit of a pattern here. A trust is generally used as a way to disperse assets after the owner has passed away. A trustee is put in charge of following very specific instructions that have been put in place to direct how the money and other assets in the trust are to be used.
A living trust, on the other hand, is used to protect many different kinds of assets during the owner’s lifetime. A Georgia wills and trusts lawyer may recommend a living trust for many different reasons. For example, this kind of trust can be used to allow the individual to stay in his or her home while transferring ownership.
Each of these types of wills and trusts is something that should be discussed with a knowledgeable attorney in the state where you reside, as laws will differ throughout the country.
We are here to answer your questions and to help you create a plan to make things easier on your loved ones if the unthinkable happens to you. Please call us at 770-425-6060 and we’ll give you a Georgia Family Treasures Planning Session, valued at $750, for NO CHARGE. This session will educate you so you can make the best decisions for your family.
It will probably cost more initially to set up a well-drafted living trust than to have a will prepared by an Atlanta wills and trusts lawyer. A true cost comparison should include not only the expense to establish the will or trust, but also what it will cost should you become incapacitated and after you die.
The Key Takeaways:
A living trust document has more provisions than a will because it deals with issues while you are living and after you die, while a will only deals with issues that occur after your death.
A properly prepared and funded living trust will avoid court proceedings at incapacity and death. A will provides no such protection and can, in fact, ensure court intervention at both events, which can be very costly (in time, privacy and dollars) to your family.
Instructions at Death and Incapacity
Both a will and a living trust contain instructions for distributing your assets after you die. But a living trust also contains your instructions for managing your assets and your care should you become incapacitated.
A Living Trust Avoids the Costs of Court Interference at Incapacity and Death
A properly prepared and funded living trust (one that holds all of your assets) will avoid the need for a court guardianship and/or conservatorship if you become incapacitated. The person(s) you select will be able to manage your care and your assets privately, with no court interference.
A will can only go into effect at your death, so it can provide no instructions regarding incapacity. In that case, your family would almost certainly have to ask the court to establish a guardianship and/or conservatorship for your care and your assets—a process that is public, time consuming, expensive and difficult to end.
What You Need to Know. The same living trust document that can keep you out of a court guardianship at incapacity can also keep your family out of probate court when you die. But a will must go through probate. Depending on where you live, this can be costly and time consuming.
Costs to Transfer Assets…Pay Now or Later
There may be some minor costs to transfer assets into your living trust when you set it up, and then from your trust to your beneficiaries after you die. But these will be minimal if you and your successor trustee do much of the work yourselves. With a will, the probate court (with its costs and attorney fees) is the only way to transfer your assets to your heirs after you die. So you can pay now to set up your trust and transfer titles, or you can pay the courts and attorneys to do this for you after you die.
Actions to Consider
- Find out what probate costs are where you live. If your state has a fee schedule based on the value of probate assets, this will be fairly easy. If it has “reasonable” fees, ask an attorney to estimate what these fees would be if you die tomorrow and, if you are married, if your spouse dies the next day.
- Similarly, ask your Atlanta living trust attorney to estimate what the costs would be if you become incapacitated tomorrow and, if you are married, if your spouse becomes incapacitated the next day. (Practically speaking, this will be impossible to estimate because no one will be able to predict how long the incapacity will last or what complications might arise. The mere uncertainty of these costs should give you pause—and propel you to plan for incapacity.)
- Add these estimates to the cost of having a will prepared—and compare that to the cost of a living trust. When you make a true comparison, you may conclude that having a living trust actually costs less than a will.
If you’d like to find out whether a will or living trust is the best vehicle for your Atlanta Georgia estate plan, call us at 770.425.6060 and schedule a Georgia Family Treasures Planning Session with us.
Many of you who have been asked by a family member of close friend to serve as the trustee of a trust are honored that the trust owner feels confident in relying on their good judgment to undertake this important responsibility. And it’s very likely you have no idea what you have just said yes to take on.
Being a trustee means that you are responsible for all oversight and direction of the assets of the Trust. As a Trustee, you have what is known as a fiduciary duty to the beneficiaries of that trust. There are laws you must abide by in administering the trust, in addition to the terms of the trust that set out your duties as trustee.
A trustee’s duties include, but are not limited to:
- Administering the trust according to its terms
- Communicating with beneficiaries about the various activities of the trust.
- Investing and managing trust assets in a prudent manner
- Accounting for and paying any taxes or fees
- Distributing assets to beneficiaries as outlined in the trust
- Making an accounting of trust assets, liabilities, receipts and disbursements to beneficiaries.
As a Trustee, you may find yourself involved with the probate process at some point and have to go into Court to marshal assets. If some of the assets of the estate were not properly transferred into the trust, this process can be overwhelming, especially if you do not have prior experience in this area.
Thankfully, with a good Atlanta trusts administration lawyer on board, you do not have to navigate this process alone. Engaging experienced legal help is always the best option for trustees, with the trust being responsible for any fees incurred for legal services.
If you would like some guidance on trust administration or planning for smooth administration of an estate, call our Marietta trust administration lawyer office today to schedule a time for us to sit down and talk. We normally charge $750 for a Family Wealth Planning Session, but if you mention this article and we still have room on our calendar this month, we will waive that fee. Call us today at 770-425-6060 and mention this article.
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One of the jobs of an Atlanta Georgia trust lawyer is to help clients choose the person who will be responsible for a trust that has been set up. The trustee has several very important jobs, and things will go smoother if he or she is aware of these responsibilities up front. Here is some good information that should be shared with a trustee in order to administer the trust with as little difficulty as possible when the time comes.
One Reason “Trust” Is So Important in the Word “Trustee”
In order to ensure that the trust administration goes according to plan, the trustee should review the document that set it out in the first place. It makes sense to do this while the person creating the trust is still alive so that you can talk about the true intentions behind the trust. Both parties may choose to sit down with the Atlanta trust lawyer in order to talk through any confusing points. When it comes time to administer the trust, the trustee will have valuable insight on what was originally intended and how to bring those goals about.
Along those same lines, it is the trustee’s responsibility to make sure that he or she is acting in the best interests of the beneficiaries. If there is a question about how best to manage the assets, the attorney can be brought in for advice and to make sure that decisions being made are in line with Georgia state and federal laws. For this reason, it’s imperative to choose a trustee who not only has good business sense but who is also extremely trustworthy. He or she should understand that the trust is not for personal gain and be able to withstand temptation to use the trust for his or her own benefit.
Keeping Track of the Trust
The trustee’s main focus should be to manage the assets of the trust in the most effective way possible. This may mean investing money in smart ways and also includes distributing funds to beneficiaries when appropriate. One of the easiest things the trustee can do to keep track of funds is to open a checking account for the trust. Any money that comes in or goes out of the trust can go through this checking account, creating an easy-to-see method for tracking income and expenses.
As an added safeguard, the trustee should provide an annual accounting of the trust to the beneficiaries. This allows them to understand how the trust is being managed. It may also be appropriate to provide this information to your Atlanta GA trust lawyer or other legal entity. Keeping in regular contact with the beneficiaries ensures that they are benefitting appropriately from the funds and also develops a relationship of trust between the parties involved.
GeorgiaFamilyLaw : Worrall Law LLC is Your Family’s Lawyer for Life™. We help families protect the people they love and things things they care about with plans that will work when your family needs it the most. Call us today at 770-425-6060 to schedule your Georgia Family Legacy Planning Session ($750 value) at no charge.