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Beware trust scams
By Laura
Bruce • Bankrate.com
Wherever there's money to be made, you can be sure
con artists are lurking nearby. Not all people involved with setting
up personal trusts can be trusted.
The Federal Trade Commission says be wary of businesses
that advertise seminars on living trusts or send mail asking you
to set up an in-home appointment to learn whether a living trust
is right for you.
A living trust means you -- the creator -- are alive.
You control your assets but you transfer ownership of your property
to the trust. You can name yourself or someone else as trustee.
A benefit is the estate passes directly to your heirs when you die
-- it doesn't have to go through probate.
The FTC says a living trust is useful, but only if
it's properly written and funded, meaning the assets have been properly
transferred to the trust.
"Poorly drawn or improperly funded trusts can
cost you money and endanger your best intentions," says the
FTC.
The agency says it's not uncommon for salespeople
at seminars and in-home appointments to exaggerate the benefits
and appropriateness of a trust.
Additionally, steer clear of living trust "kits"
where you're asked to send money for a do-it-yourself product. The
FTC says there's a good chance you'll get nothing in return.
The FTC offers these guidelines when considering a
trust:
- Explore all your options with an experienced and
licensed estate planning attorney or financial adviser. Generally,
state law requires that an attorney draft the trust.
- Avoid high-pressure sales tactics and high-speed
sales pitches by anyone who is selling estate planning tools or
arrangements.
- Avoid salespeople who give the impression that
AARP is selling or endorsing their products. AARP does not endorse
any living trust product.
- Do your homework. Get information about your local
probate laws from the Clerk (or Register) of Wills.
- If you opt for a living trust, make sure it's properly
funded -- that is, that the property has been transferred from
your name to the trust. If the transfers aren't properly done,
the trust will be invalid and the state will determine who inherits
your property and serves as guardian for your minor children.
- Remember the "cooling off" rule. If
you buy a living trust in your home or somewhere other than the
seller's permanent place of business -- for instance, a hotel
seminar -- the seller must give you a written statement of your
right to cancel the deal within three business days.
- Check out the organization with the Better Business
Bureau in your state or the state where the organization is located
before you send any money for a product or service. Although this
is prudent, it is not foolproof. There may be no record of complaints
if an organization is too new or has changed its name.
-- Posted: May 15, 2001
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