Unscrupulous actors sometimes try to entice unaware victims into financially crippling scams. One of the most common types of scam deals relates to living trusts.
Fortunately, by doing your research and ensuring you are entering a valuable contract, most scams are easy to see through and avoid. A living trust is a written legal document into which you place some or all of your assets. The belongings are managed by yourself or by someone whom you dedicate the responsibility to at the time of death or until a specific date. According to the Federal Deposit Insurance Corporation, you can choose from two types of trusts.
A revocable trust is an adaptive deposit account managed by one or more people designated as a beneficiary who receives the assets upon an owner’s death. It can be revoked, terminated or changed at any time, at the discretion of the owner. An irrevocable trust is when the owner contributes deposits or properties to the trust but gives up power to cancel or change the account. When determining the right plan, keep an eye out for common types of scams, as reported by the attorney general of Pennsylvania.
Typically, the beginnings of a dishonest living trust begin with a phone call. Unsuspecting people, often elderly, are solicited to attend seminars or receive an in-home visit to discuss living trusts. Once the meeting starts, trustors are often put under extreme pressure to secure their assets through pushy sale pitches. In most cases, a con artist will play on the worry that your beneficiaries will be unprepared to deal with your death or that a court will decide what happens to your belongings.
In most cases, these salespeople are merely attempting to access your sensitive financial information. They will often make illegal withdrawals from your accounts or sell your data to other con artists to pursue more fraudulent sales.
Ways to Avoid a Scam
Keep these tips in mind to avoid falling victim to an unruly financial trust.
- Recruit your own trusted attorney or reputable estate planner.
- Never sign documents that you don’t fully understand.
- Ensure you have the option to update your trust periodically.
- Verify any affiliation or endorsement by a government agency or senior association.