Elderly residents should be wary of high-pressure tactics from overbearing salespeople who pressure them into giving them your financial information. Be wary of con artists throwing around probate law terms like “executors.” You should always be suspicious of claims from scam companies promising that you can significantly reduce your estate taxes by creating living trusts. A written will can also help you reduce your taxes and are often less expensive to create. Promises that a living trust will help you receive federal or state government assistance are false. Finally, you should be wary of overinflated claims from fraudulent salespeople guaranteeing that you can save lots of money in federal taxes by creating living trusts.

Only a licensed attorney can help you decide if a living trust would appropriate serve your estate planning needs and only after carefully discussing your goals with you.

Although living trusts can provide some tax benefits, so can other estate planning tools, including making lifetime gifts. Unfortunately, not all consumers understand the specific legal advantages to creating living trusts. Without proper legal training and consulting, consumers often unintentionally overemphasize the utility or benefits to creating living trusts. These myths helped fraudulent and deceptive businesses devise living trust scams. Scaring consumers, mainly elderly consumers, into believing they should create living trusts, living trust scam artists sell fake living trust forms and kits.

The Mendel Law Firm, L.P. is a member of the American Academy of Estate Planning Attorneys.

As discussed in the last blog, the Texas Attorney General and Texas Bar brought living trust scams to our attention. Living trust scam artists purporting to sell living trust kits or documents prey upon elderly consumers’ fears. Unfortunately, these kits are often worthless and can cost thousands of dollars. Other living trust scam businesses sell living trust products in an effort to obtain a consumer’s private financial information. Deceptive living trust salespeople may visit you at home or call you by telephone in an effort to persuade you into buying a worthless living trust kit or do it yourself form. The Attorney General of Texas recommends you contact your local law enforcement if you suspect you are the victim or intended victim of a living trust scam.

Con artists selling living trust kits or forms may scare you into believing that using wills instead of living trusts will save you years in unnecessary probate court procedures or thousands of dollars in court costs. You should realize that will contests or claims challenging the validity or authenticity of a probated will are very unlikely. Only a probate law attorney can decide if a living trust is suitable for your estate planning needs, and only a licensed attorney should help you draft this document tailored to your individual needs. A salesperson selling fraudulent living trust services may face criminal or civil sanctions by practicing law without a professional license.

The Mendel Law Firm, L.P. is a member of the American Academy of Estate Planning Attorneys.

Beware of living trust scams targeting elderly residents across the nation. A living trust is a written legal instrument allowing you to place your assets into trust for the benefit of your beneficiaries. A trustee manages the living trust on your behalf. The written instrument earns its name from the fact that you create a living trust while you are still living. A living trust may be irrevocable or revocable. You may not alter or revoke an irrevocable living trust document, unlike a revocable living trust, which you can revoke or amend. Living trusts are useful estate planning tools, but they are not appropriate for everyone.

A living trust is not a one-size-fits-all solution to estate planning. Typically, a living trust is only one part of your estate planning documents, which also includes a written will. Furthermore, a living trust must comply with specific state laws, and in Texas, the Probate Code establishes the statutory requirements when creating a valid living trust. A living trust does not help you avoid probate; since a will and a living trust is not the same thing, although they may serve similar purposes. An attorney licensed to practice law in Texas will probably not use prepackaged living trust forms and will help you create a specifically tailored document.

If you fall victim to a living trust scam, you may have a right to cancel your transaction within three days under federal law if you entered into it during a door-to-door sales transaction.

The Mendel Law Firm, L.P. is a member of the American Academy of Estate Planning Attorneys.

A trust can be a powerful estate planning tool, and you need to make several decisions when creating a trust, including choosing a Trustee to manage the property held by a trust.  But a Trustee does not necessarily have to be a family member or a trusted friend.

To review how a trust works:

• When you create a trust you transfer assets such as a real estate, stock or money to the trust.
• These assets are then managed for the benefit of the Beneficiaries by a Trustee.
• While a Grantor, the person creating the trust, may choose to act as the initial Trustee in the case of a Living Trust, obviously they must choose a Successor Trustee to handle the Trustee duties upon their death or incapacitation.

Some estates may choose to use the services of a professional to handle the Trustee duties.  A professional Trustee, or Trust Officer, charges for their services.  The fee is normally a percentage of the assets that they are managing.  In using a professional to carry out the Trustee’s duties, you have the advantage of using a trained professional to handle assets, but some may feel the Trustee may not make the sensitive decisions that managing a family Trust may require.  In this case, making trust documents specific as possible may overcome this drawback, but others may just see this as an advantage.

A Trustee, whether it is a professional or a loved one, will always have a fiduciary obligation to the named Beneficiaries of the Trust.  This obligation is not only an ethical one,  but a legal obligation as well.

Trustee duties range in complexity from simply distributing property to Beneficiaries to handling a large portfolio of stocks and bonds.  Discuss your choice with a Trust Attorney, as they will be able to offer insight into your particular needs.

The Mendel Law Firm, L.P. is a member of the American Academy of Estate Planning Attorneys.