Friday, July 6, 2007
LIVING TRUST SCAMS IN THE STATE OF TEXAS: Living Trust Scams versus the truth in the State of Texas -- I often talk to people that say "I have a living trust so I'm not worried." When I try to determine what they have done, they have no idea. They think a "LIVING TRUST" solves all of their problems. WRONG!!!!! I'm no expert on estate planning. However, the July, 2007 Texas Bar Journal had an interesting article designed for clients. I'm summarizing the article: 1. Sales people target people over 50 and try to selling them living trusts. So you need to ask yourself -- Do you understand what a living trust means in the State of Texas? 2. You need to carefully consider if this is the best idea for you. 3. Do not fall victim to "act now" or high pressure sales pitches. 4. Talk to your children, your best friend, your minister, your doctor, your accountant, CPA, estate planning attorney, banker or financial advisor (in other words -- people you know and trust!!) before setting up a living trust. 5. Many salesman make false, incomplete or incompetent statements regarding the laws of the State of Texas. 6. Consider going to an estate planning attorney or elder care attorney and paying for an hour of their time before making your final decision. Most charge under $300 for an hour consultation. I personally highly recommend Kevin Alter, Patricia Bushman or Keith Lynch all of Houston, Texas. They will be honest with you and they are all able to speak to you in plain English! If you are still scared, I charge $150 per hour to go with you to any probate or estate planning attorney, and be your advocate on YOUR behalf. 7. Many salesman claim that you will save money on taxes. This is misleading. Most Texans will not have a death tax! If your estate is taxable, a will can accomplishy the exact same tax savings as a trust for less money. 8. If anyone tells you that a living trust will help you qualify for public assistance benefits they are not telling the truth. 9. If anyone tells you that a living trust will help you avoid a contested will again they are not telling the truth. (Hint: a trust and a will are separate legal concepts in Texas and do 2 completely different things!!) 10. A living trust will NOT help you avoid your creditors! 11. A living trust may or may not avoid the expense of a guardianship. The State of Texas also offers a power of attorney that might work. However, you need to talk to a competent attorney to know what document is right for your particular situation. 12. Many salesman claim that attorneys will take 3-10% to probate your estate. This is a false claim. If you doubt my last comment, then you need to talk to 2 or 3 attorneys and see what they charge. (For 3 competent attorneys that I personally trust - call Kevin Alter, Patricia Bushman or Keith Lynch). 13. If a salesman claim that probate in the State of Texas takes years -- they don't know what they are talking about. If your will is written according to Texas laws, probate in Texas is cheap and easily -- unlike many other states. 14. If a salesman claims that probate is time intensive and costs a lot of money -- they don't understand Texas laws! 15. If a salesman claims that everyone should have a living trust -- they don't know Texas law! 16. If a salesman claims the only way to avoid probate is to have a living trust --they don't understand or know Texas law! In summary, it is your money so be slow in spending it. Don't rush! If you must take the decision immediately, then don't! Be suspicious! Recognize that many "smooth talking, sincere salesmen" are hoping to retire off the money they make from you! Con-artists make a good living on people's fears. Don't waste your hard earned money! This is YOUR money -- you need to take your time and think about what you want to do! If you want to meet with me, I charge $150 per hour to be your advocate and argue with you about all the possible implications of this "great opportunity". If you think you've been a victim of a con artist, a livng trust salesperson or an unethical attorney, please call the State Bar of Texas and report them. I will give you 3 personal examples: 1. My looked at my mother's will and it had typos in it -- it was horribly drafted by a very expensive "Galleria" attorney (it cost her over $5,000). I took her to Kevin Alter who wrote a very short will for her for under $500. When I asked Kevin why it was so "basic" he said that her estate was under the State of Texas non-taxable estate and there was no need for her to have a "fancy" will. I thought about it & realized he was right! (As an attorney, I admit that I like things to be long, detailed and drawn out!) 2. If I die tomorrow, my children do not have to probate my estate. Even though I have a will, I've purposely left all of my assets in accounts with "rights of survivorship". Therefore, my utilities and credit cards will not be paid and my kids inherit directly from me. However, I review my documents on an annual basis to make sure that my personal situation has not changed. I have purposely designed my estate to be "broke" when I die so that no creditor can collect. If I win the lottery tomorrow, I will definately talk to an estate attorney before collecting my lottery winnings and I will revise my will to include trusts to go where I want the money to go. 3. My father has advanced Alzheimer's disease. I never had him declared imcompetent. As he was getting ill, we moved everything into a family trust. Even though he has a will, his children and grand-children will receive whatever is left in his estate at his death, as HE WANTED IT! The probate of his estate, at his death, will be easy and inexpensive. Now that he is mentally incompetent (and 5 years later) I would have made some changes to what we did; however, overall the documents we did will ultimately accomplish what he wanted. After he was mentally incompetent, he apologized to me for some of the decisions(he wanted me to be sole executor of the estate) he made -- but it was too late to revise the documents. Looking back, he could have accomplished what he ultimately wanted easier and cheaper. Unfortunately, we cannot change the documents now. Of course, he never thought he'd live this long and end up incompetent. He thought he'd just die quickly and easily.