In recent years, Living Trusts have become a popular estate planning option because they permit assets to pass to heirs without any probate fees, can take maximum advantage of available estate tax deductions, and do not require public disclosure of estate assets. However, the State Bar of California has been alerting the public to certain estate-planning businesses, sometimes referred to as “Trust Mills,” that use deceptive advertising, scare tactics, and attacks on the legal profession to sell often poorly drafted, overpriced and unnecessary estate planning documents to a population that is frequently elderly and/or legally unsophisticated.
Such Trust Mills hire persons who are not licensed to practice law to sell estate plans and employ high pressure sales tactics to encourage people to use Living Trusts even when they are not the most appropriate form of estate planning. You should be wary of any estate planning business that uses telephone or door-to-door solicitation or of any business that requires you to pay a substantial fee in advance for a Living Trust before you have met with an attorney and discussed your estate planning requirements.
These Trust Mills frequently provide their “customers” with preprinted forms that may or may not fit the needs of the client, that are not prepared by attorneys and that may be reviewed by a mill-employed attorney who never has any contact or communication with the client and who may be reviewing hundreds of trusts each week.
In some instances, fees charged by Trust Mills for the same trust documents differ from client to client, solely based upon the client’s ability and willingness to pay. It is also not uncommon for Trust Mill fees to be significantly higher than what a reputable estate planning attorney would charge for preparing and properly funding a Living Trust. For that reason, you should always contact an estate planning attorney before committing to purchase a Living Trust from a salesman to compare prices and what you get for your investment.
There have been numerous cases where Trust Mills did not transfer a client’s assets to fund his or her Living Trust. This totally defeats the purpose of such a trust, because untransferred assets remain subject to probate, may be subject to higher estate taxes, and may not pass to the client’s heirs pursuant to the terms of the trust.
If you already have a Living Trust, you should make sure that all appropriate assets and properties have been properly transferred to that trust. If that has not occurred or if you believe that you have been overcharged by a Trust Mill, you should contact an attorney to discuss your rights and remedies and to make sure that your Living Trust accomplishes your estate planning wishes and has been properly funded.