November 2006 "Watch Out For Crooked Trust Salesmen"

PLANNING FOR WEALTH & SECURITY
By attorneys Jennifer & Jeff Hawkins

WATCH OUT FOR CROOKED TRUST SALESMEN

Here is an increasingly common situation: a person receives a postcard in the mail offering information about how to avoid taxes and “probate.” The “customer” completes the postcard and sends it in. Soon afterwards, a salesman appears on the customer’s doorstep to gather information about the customer’s estate planning situation. Next, the customer receives an elaborate series of documents and an invoice for $3,500.00. The customer has never seen or spoken with an attorney. Worse yet, an attorney has probably never seen the customer’s a state plan.

A certain kind of criminal has emerged in the United States to exploit people with illegal estate plans. Increasingly, groups and individuals are selling estate plans to people, but the plans have been prepared illegally. If a person other than a licensed Indiana attorney prepares a deed, will, trust or other such document for another person, Indiana Code § 33-1-5-1 makes it a Class B misdemeanor, punishable by imprisonment for up to 180 days and a fine of up to $1,000.

The Indiana Supreme Court has begun to punish these crooks severely. Last year, a company that sold estate plans was ordered by the Supreme Court to track down all of its customers and refund all of their fees to those customers. The offending company claimed that its documents were prepared by attorneys. However, evidence showed that no attorney had seen the documents since the documents were originally prepared in general format several years earlier. Apparently, the company believed that it could buy a set of documents from an attorney and sell those documents to its customers without having an attorney involved to make sure that the documents were appropriate for the customers.

The Indiana State Bar Association is on guard to catch these crooks in the act of defrauding customers. The ISBA has appointed a committee to prosecute people for the unlicensed practice of law and to protect the victims of these crimes. Any person who believes that he or she has been defrauded by such a company can call the ISBA toll-free at 1-800-266-2581 and ask to speak with someone about unauthorized practice of law.

A few warning signs may protect you from such a criminal. First, you should never have to pay a fee for an estate plan in advance. Also, any one suggesting that you should let them prepare your estate plan for you should be a lawyer. However, some financial planners will give you ideas about estate planning and then recommend that you take the ideas to your lawyer to prepare the estate plan. Such a person should be willing to refer you to an attorney and they should not discourage you from seeking your own attorney. At some point during the process, you should actually meet the attorney and have an opportunity to discuss the estate plan with the attorney.

Never assume that legal documents are too complicated for an ordinary person to understand and that you should not have an opportunity to understand your documents before signing them. A good lawyer will always take as much time is needed to help you understand your estate plan. It’s your plan and your money – use common sense to protect it and make it work for you.

THIS ARTICLE IS NOT LEGAL ADVICE. ALWAYS CONSULT AN ATTORNEY DIRECTLY BEFORE RELYING UPON THIS ARTICLE OR CHANGING AN ESTATE PLAN.