Thu Mar 11 2010
Columbus -- The Ohio Department of Insurance and the state Attorney General's office warns Ohio seniors to be careful when dealing with operations known as "trust mills" that can prey on the elderly and often convince seniors to purchase inappropriate estate planning documents and financial products.
Trust mill operators typically solicit senior citizens by mail or by telephone and offer "free" information about trusts, wills and taxes, according to a press release from the two offices.
They often hold seminars or programs at senior centers, assisted living centers or churches, where a "trust adviser" or "senior estate planner" will inform the senior citizen of the incredible expenses and awful frustrations their heirs will encounter during the probate process.
The individual will then inform the senior that they can take measures to avoid the probate process through the establishment of a living trust. The state departments stress seniors should realize that in most cases, the individuals masquerading as financial advisors, estate planners or experts in estate planning are really insurance agents looking to sell insurance and financial products.
As part of a trust mill scheme, a senior will pay a substantial amount of money to have their living trust prepared. Shortly after the sale, the sales agent typically sets up a second visit, where the agent will go over all of the assets to be placed in the trust.
After learning about an individual's CD's, mutual funds, or other investments, the sales agent will often scare the senior into believing their investments are unsafe and will recommend that they purchase an annuity.
Typically in trust mill scams, the sales agent will fail to disclose substantial surrender penalties and adverse tax consequences a consumer will face by transferring their assets into an annuity. While annuities are a worthwhile investment vehicle, they are very complex financial products. Before placing money in an annuity, the state departments suggest consumers take time to research the product being offered, as annuities are not always suitable for everyone.
If you are approached by a company selling trusts, the Ohio Department of Insurance and the state Attorney General's office suggests the following the following:
* Do not allow yourself to be pressured into purchasing an estate planning product. Ask for time to consider what the company or individual is selling.
* Determine if any complaints have been filed against the company or individual by calling the Better Business Bureau and the Attorney General's Consumer Protection Division.
* Ask the sales representative to provide you with identification and a description of his or her qualifications, education and expertise in estate planning.
* Contact the Ohio Department of Insurance or the Department of Commerce to see if the individual is a licensed insurance agent or securities broker.
* Contact the local bar association to verify if the individual selling trust services has been admitted to practice law in your state.
* Consult with a lawyer or financial advisor who is knowledgeable in estate planning before considering a living trust.
Consumers who feel they have been the victim of a trust mill should contact the Enforcement Division of the Ohio Department of Insurance at 1-800-686-1527 or file a complaint online at https://secured.insurance.ohio.gov/agent/OnlineEnforce.htm .
They can also contact the Attorney General's office at 800-282-0515 or www.ohioattorneygeneral.gov.
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