Imagine spending thousands of dollars on an estate plan to protect loved ones, only to find that no true protection exists. Unfortunately, this scenario happens on a regular basis to individuals who are victims of estate planning schemes. According to a report conducted by the U.S. Consumer Financial Protection Bureau of people ages 50 and over, victims of financial fraud lose $34,200 on average to unscrupulous scammers.
In some instances, the scams are discovered before the victims die. Though the family members may have lost the money involved, the victim can still amend the legal documents in order to make them valid and accurate. Unfortunately, many individuals do not discover the scam in time. As a result, a family’s devastation during a time of grieving is compounded when they discover the scam. To avoid becoming a victim of estate planning fraud, it is important to identify the different forms that estate planning fraud may take, the signs to watch out for, and the steps to take when seeking competent estate planning counsel.
Older adults, ages 50 and over, tend to be the targets of estate planning fraud. They may be more susceptible to these schemes due to a variety of reasons, including the following:
Many of these individuals are also unfamiliar with the estate planning process and therefore unable to identify deviations from truthful and normal practices.
A scammer often preys upon the fears of these older individuals by creating unnecessary anxiety. The scammer often paints a wildly exaggerated picture of the risks the victim may face if the victim chooses not to work with the scammer, including notions that a “death tax” (which is likely not even applicable to the person in question) would be substantial. The scammer may also represent that the trust or financial products offered by the scammer are the only possible solutions (despite the existence of other options, such as a will, that may satisfy the individual’s needs and cost less). The doom and gloom messaging matched with the heroic trust product offerings leave the victim feeling as though there is no choice but to purchase these solutions.
Types of Scams
Estate planning scams do not have a one-size-fits-all approach. These scams vary in delivery, outcome, timeline, and approach. However, trust mills are probably the most common form of estate planning scam.
Trust mills are companies, usually composed of nonlawyers, that create a low-cost trust that they replicate over and over again for unsuspecting victims. The problem is that the trusts provide little to no customization to actually protect senior consumers. The main objective with most trust mill operations is to gain access to information about the individual’s accounts and property. Once that information is acquired, these trust mills offer additional financial products and receive a significant commission for each additional product sold.
To avoid becoming another victim, there are a few steps you can take:
We Can Help
Genuine estate planning can be a complex yet highly rewarding journey. Our team of trusted and experienced attorneys know how to help you navigate the various options that exist for your situation so that you can design an estate plan that actually protects you and your loved ones.
At Marvel Law, we are here to help serve you with purpose. Click here to email us or call us at 309-807-2885 for your FREE 15-minute consultation. Due to CDC guidelines, we are offering FREE 15-minute video conference consultations. To take advantage of the video conferencing ability, please email us to set up a time.
 Katherine Skiba, Older Americans Hit Hard by Financial Fraud, AARP (Feb. 28, 2019) https://www.aarp.org/money/scams-fraud/info-2019/cfpb-report-financial-elder-abuse.html.