Living Trust scams - or how the pot calls the kettle black

For centuries, estate planning was among the exclusive wares on an attorney’s shelf for which the attorney charged whatever the traffic would bear. In most cases the game plan was very simple: the client was charged $100 to $500 for a Last Will and Testament that in the end subjected the client’s estate to several thousands of dollars in probate and attorney fees and many months of agonizing delay. The scheme became one of the legal profession's most profitable arrangements and accounted for up to 20 percent of the general practice attorney's annual revenue.

The Living Trust, which provides a much more economical solution to the problem of transferring assets to the next generation, was introduced to modern society in the mid-1960's by non-attorneys who referred to themselves as estate planners. Attorneys who had grown accustomed to needlessly skimming five to ten percent off the top of their client’s estates in Probate Court were of course enraged and since that time have fought back with a vengeance.

One of the attorney’s best offenses has been to suggest to unenlightened clients through deliberately planted stories in the media the great dangers of being scammed by such non-attorneys. Also, they have induced their fellow attorneys employed by state attorneys-general offices and such offices as the AARP to join in their subterfuge.  

Few clients understand, at least in the early days and weeks of their Living Trust investigation, that there is no such thing as an illegal Living Trust! All Living Trusts avoid probate and are considered legal. This is due to the fact that a Living Trust is a technique of transferring assets from private ownership to trust ownership and not some kind of trick document that makes all estate planning problems go away.

Your financial custodians (banks, stockbrokers, credit unions, etc.) are the people that transfer your assets from your private ownership to trust ownership. It is a simple, five to ten-minute procedure which they will be happy to do upon your request. The only requirement made by your financial custodian is that your trust contract contain the identity of your trustee and successor trustee. If this essential information is in place in the contract the bank or other financial custodian will immediately place your asset in a trust account which automatically forms a legal trust and is protected by centuries-old fiduciary laws. If the contract does not name a trustee and a successor trustee, the financial custodians will refuse to transfer the assets to trust ownership. Consequently, there is no trust.

Because of the fact that all established trust contracts must pass through this process before assets can be transferred to a trust, the only possible scam involved is in paying too much for the trust contract! Thus, attorneys who believe it is ethical to charge $1,500 to $3,000 for the 25 to 35 minutes it takes their secretaries to construct the trust documents on a computer become the biggest scam artists of them all! Thus, almost all Living Trust scams are nothing more than the pot calling the kettle black.

To get the complete story of what it is that makes a Living Trust legal, click here.