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December 11 2008

Beware of Trust Mills

By Neil L. Kimball

I was contacted by a client recently in a panic because a woman kept calling her and telling her that she needed a revocable living trust and that if she did not have one, then she would lose a large portion of her estate to legal and probate fees. When I asked who this woman was, my client said that she was with some "law firm." The mystery woman said that my client had returned a post card asking for such services. Even though my client knew that she had not returned any card, the calls kept coming with greater pressure being applied with each call.

The calls were from a company from the other side of the State. There is an attorney involved with it who probably prepares the forms that they provide to salespeople who make house calls and pressure people to buy their estate planning packages. The clients never meet with the attorney and other than the names placed in the forms, the documents are not really tailored to the client's particular situation. The worst part is that the price is much higher than most experienced estate planning attorneys would charge for a plan that they would draft with the clients' goals and needs in mind.

In the case of my client, she had a good plan in place that did not involve a living trust. Living trusts, while appropriate for most clients, was totally inappropriate for her. That is the big problem. These trust mills use fear and high pressure sales tactics to sell a "one size fits all" package at a high price. They typically guarantee that if your estate goes through probate, they will cover the costs. But, upon the client's death years later, how do their family members find this "law firm." It is located in another part of the State with an unknown attorney in some office suite and a toll free number. The guarantee is likely worthless.

Beware if someone is pressuring you to do something and trying to motivate you by using fear. This is why it is important to select a professional advisor that is knowledgeable, who is paid a reasonable fee to prepare a plan that is tailored to achieve your goals and according to what is in your best interest. This is true not only of attorneys, but also accountants, financial planners and other service providers. Even if you go to the most expensive firm in town, at least you will obtain a plan that fits their situation from a knowledgeable professional or firm that is likely to be around for a long time.