You may have noticed certain ads that offer Living Trusts at cut rates. They used to be $399, but now these cheap trusts go for $699 or more. This may sound great, but before you (or someone you love) jump to get that “bargain” trust, be sure you know all the facts - - and pitfalls!
First, ask if you will be meeting with a qualified
estate planning attorney in developing your plan,
and if the attorney will then draft your documents.
The companies selling these bargain trusts usually have to produce them in high volume - - hundreds or even thousands a month - - in order to cover their marketing and other overhead costs and still make a profit. That's why they're often referred to as “trust mills".
These companies often try to give the appearance of being a law firm. They use language in their ads such as “Estate Planning Firm,” “Reputable Estate Planning Attorneys,” “Estate Planning Professionals”; or mentioning the names of certain attorneys; or use a firm name (such as “Estate Services,” “Estate Planners,” “Trust Services,” etc.) that makes them sound like a legitimate law firm. They may even hold seminars and have an attorney give the presentation. However they do it, they are intentionally hiding the real truth from you.
Here's why. Usually, you will have no direct contact with an attorney at all during the process of establishing your trust. That's like getting critical surgery from a doctor you've never seen and who has never examined you! Worse yet, imagine having the surgery performed by a nurse or anyone right off the street!
Here's how most of these trust mills set up your trust. First, they don't have a consultation meeting with you. Rather, they merely have you fill out a simple form questionnaire. No doctor (or even nurse) examines you - - instead you do it yourself! They then send your questionnaire to their document production facility, which is usually out of state and then they crank out your trust - - along with thousands of other “one-size-fits-all” trust documents, inserting a few items of information you have provided to them from your questionnaire into a pre-printed package with fill-in-the-blanks using a simple computer program. No attorney is involved in drafting or reviewing your trust and the non-lawyer preparing your documents may not even be trained as an estate planning paralegal! So, who's really doing your surgery?
Sometimes, the trust mills will try to soft-pedal this issue by claiming that their documents were created by an attorney or that they are reviewed and approved or signed off by an attorney after they are generated. If they claim this, ask, “How many attorneys do you have on staff?” Think about it - - how can one or two attorneys properly review thousands of trusts, particularly if they have never met the clients and have only a simple questionnaire that may not tell them all they need to know and they never ask any follow-up questions? You might also ask “Are the attorneys (if any) licensed in California?” If not, they know they can't be regulated by the State Bar of California!
Another way that these trust mills will try to
cleverly get around this issue of the “mystery surgeon”
is through hidden disclaimers.
When you sign up for one of their trusts, a disclaimer will be innocuously buried in the form stating, “We are not providing legal advice.” That should be your warning, right there, to stay away! Unfortunately, people often don't have time to read this fine print, because they are pressured to immediately sign up for their trust!
Another tactic these trust mills use is to claim that their attorneys or other personnel "specialize in estate planning". Sometimes they even create their own bogus title for their representatives, like “Certified Estate Planner,” which they award after going through a 2-hour course! Unfortunately, most consumers don't realize that literally anyone can say they are an estate planning specialist. However, only an attorney who has demonstrated a certain number of years of experience in estate planning, passed a special Bar examination, and been reviewed by his or her professional peers can call him or herself a “State Bar Certified Specialist in Estate Planning, Trust & Probate Law.”
Think about it this way - - if the State Bar, which is empowered with regulating attorneys and the practice of law in California, says that estate planning is a specialty area of law, why would you think that someone who has never even gone to law school and become an attorney would be properly qualified to take care of this for you? Or that any attorney with limited experience and training can do it properly?
In fact, many of these trust mills are operating illegally!
Stay tuned for Part 2 of this article...