This is an article I wish I didn’t have to write. However, I’m compelled to do so because the problem has now reached epidemic proportions. I urge you to read this article all the way to the end.
Many of our law firm’s clients have, over the past year or so, complained to us about unsolicited phone calls they’ve received – – that they thought originated from our office. These calls actually came from mysterious third parties (which we’ve since investigated, as will be detailed below).
What Are These Calls About?
The callers aggressively push our clients to make an immediate appointment, based on one or more of the following false or deceptive claims:
- Your Living Trust plan is too old to work right and needs urgent fixing (some clients were told this right after they had just come in and updated their Trust with us!)
- Your Living Trust requires dramatic changes due to the new estate tax laws (a Living Trust is still warranted for many reasons besides estate taxes and most of our clients’ trusts already have provisions built in to handle the new laws)
- You need to get a copy of your home or other real estate deed to verify it’s in your Trust. (We have already gotten your deeds for you, or arranged to have them mailed to you directly from the recorder’s office; it just takes some time now that government cutbacks have reduced personnel)
Who are these guys and why are they calling?
These callers are often intentionally evasive about who they are or the company they represent. Worse yet, some callers make it sound like they work for our law firm or some nonprofit senior protection organization (with names sounding like AARP or another senior association, or a government agency). The callers sometimes first contact people by mail with seminar invitations looking very similar to ours or scare tactic letters containing fake testimonials and the BBB (Better Business Bureau) logo to make you feel safe.
We’ve checked them out and have found that these suspicious solicitors fall into one of three categories.
Some callers are unscrupulous annuity, insurance or investment salesmen who masquerade as paralegals, attorneys or law firm personnel. They may use self-appointed, important sounding titles like “Certified Estate Planner”, “Trust Advisor” or “Senior Estate Planner”, or claim to be a paralegal but are not. They try to get you to attend a seminar or a face to face meeting (often in your home where it’s difficult to get them to leave). Once they’re in front of you, they use high pressure scare tactics like “your trust doesn’t adequately protect against probate and creditors” or “your trust is unnecessarily complicated and will be a disaster for your loved ones” and demand you sign up right then and there to redo your trust or you won’t get their special discount price, which is usually very low. Here’s why. During the Trust revision process, they obtain your investment and insurance information so they can pitch you products that often generate big commissions for them, but may not be appropriate for you and may involve heavy penalties if you want to get out.
A second group of these unwanted callers are in fact paralegals or merely document preparers who work for companies that are not law firms. They’ll try to give you some comfort by saying their work is reviewed by an attorney. That may or may not be true, but if you don’t deal directly with a lawyer or the company is not a law firm, they are probably operating in violation of California law prohibiting the “Unauthorized Practice of Law”. Unfortunately, local Prosecutors and the State Attorney General are too busy with more serious, violent crime and don’t have time to investigate them. These paralegals often offer super cheap services because they are a “loss leader” or “feeder organization” for unscrupulous investment and insurance salesman who as “notaries will deliver your estate plan to your home to be signed.”
The worst group of callers, from my perspective as an attorney Certified as an Estate Planning Specialist by the State Bar, are other attorneys! One attorney’s office made it sound like they were our firm and asked people to come in for their free periodic checkup meeting (just like we do). They even sent out a reminder postcard that looked just like ours. They then claimed our Trust was unnecessarily complicated (what part would you like to leave out of your car engine?) and that our fees were too high (I’ll explain why they said that in a moment). Then, this other attorney had people sign a letter to us requesting their file be transferred to him, even though our clients didn’t move forward with any work. We found this out because it’s our policy to always call a client who sends a letter requesting us to transfer their file, just to be sure the letter is authentic. A number of our clients said they didn’t even realize what they had signed and didn’t want to leave us as clients – – they had hurriedly signed a bunch of papers after the attorney walked them down the hall to an affiliated financial advisor! (Now do you see why the attorney’s fees were so low?)
“If the caller wasn’t from your firm, how did they know I had a Trust and get my name and contact information?”
I can assure you that we seriously observe our duty, as attorneys, to maintain the highest possible confidentiality of all our clients’ information.
Unfortunately, there are two relatively simple ways these callers can find out if you have a Trust and obtain your contact information.
First, deed records. They show your name, sometimes your address, and that your property has been transferred into your Living Trust – – and they’re open to the public. Anyone can search these records and then use internet sites to obtain your phone number. (By the way, if you’re thinking it might then be better for us not to record your deeds, it is important we note that the failure to record may cause a costly property tax reassessment penalty or chain of title problems if the property is later transferred to a buyer or inherited under your estate plan).
A second way you can be easily identified as a Living Trust owner and your contact information released is when you previously met with a financial advisor (or insurance, annuity or investment salesperson). Even though you may not have done business with that person, your information can then be forwarded by the financial advisor to his or her affiliated paralegal company or law firm, who then contacts you. Once they meet with you, they of course refer you back to the financial advisor to do business!
So what can you do if you get one of these calls?
Any time you get a call from someone wanting to review your estate plan, obtain copies of your deeds for you or check whether your assets are properly titled in your Trust, here’s what you should do:
- Ask the caller his or her name, the company he or she is calling from and his or her phone number (say you want to think about their offer and call them back)
- If the caller avoids giving you all this information, say you’re not interested and hang up!
- If you get all this information and it’s not our law firm (or it suspiciously doesn’t sound like it’s really someone from our firm), call us immediately (866-402-1805). If it was us calling, we’ll verify it. If it wasn’t, we’ll collect the information you got regarding the caller. Here’s why…
We Fight to Protect Our Clients And the Public at Large
Over the past 20 years, I have personally written articles and booklets and given speeches warning about these kind of “trust mills”. I have also appeared before the State Senate and been directly involved in the writing of laws protecting seniors against the Unauthorized Practice of Law and other scams like those described in this article. These efforts have led to severe financial penalties to, or even the closing of, some of these unscrupulous trust mills.
When you call and give us the name, company and phone number of persons who engage in deceptive and fraudulent business practices, we intend to place that information in a file and when we have enough evidence, vigorously bring this to the attention of the local Prosecutors and State Attorney General.
By the way, don’t just believe what I’ve written in this Scam Alert. Check out numerous other third party articles warning of these trust mills and similar scams – – at www.oag.ca.gov (Office of the California Attorney General), www.nclc.org (National Consumer Law Center) and www.aarp.org (American Association of Retired Persons).
And one last thing. You may want to forward this article to anyone you know who has a Living Trust (whether our Trust or not) so they, too, can avoid becoming a scam victim.
Same Sex Couple: What Do You Do Now?
By: Attorney Philip Kavesh
The landmark U.S. Supreme Court decision, issued in the Windsor case on June 26, 2013, now enables same-sex couples to marry and enjoy virtually the same legal benefits as opposite-sex married couples.
The most significant marital benefits include:
- Joint income tax treatment (not only filing joint returns, which may or may not be beneficial, but qualifying for better capital gain treatment on lifetime sale of a residence, or on sale of other assets after one spouse dies)
- Unlimited gifting of assets between spouses during lifetime or at death
- Increased estate tax exemption (you can together pass much more to others estate-tax free)
- Enhanced lifetime and survivorship Social Security and Medicare benefits
- Enhanced rights to pension and retirement plan benefits and employer provided health coverage
The question is, what do you now?
Should You Get Married?
In order to enjoy these benefits of marriage, your ceremony must take place in a state that recognizes same-sex marriage (as California now does). It doesn’t matter whether the state you live in (or may move to) recognizes the marriage. However, if you were previously married in a state that didn’t recognize same-sex marriage at the time, you may need to marry again in a state that does now! And, if you merely are involved in a Domestic Partnership (registered or not) or only had a “Civil Union”, you will need to now legally marry.
Before you rush to get married, you should seriously consider the pluses and minuses. You may wish to seek the advice of a qualified Family Law (or “matrimonial” or “divorce”) attorney, as well as an Estate Planning Attorney. Some of the key issues you should address include:
- What will be each spouse’s property and support rights should your marriage later be dissolved? What about if one of you dies? (Should you get a Pre-Marital and/or Post-Marital agreement?)
- What will the impact on potential planning for long-term nursing care? (In particular, how will marriage affect qualifying for Medi-Cal benefits and responsibility for reimbursement after death?)
What Should You Do About Your Estate Plan – Whether You Get Married or Not?
If you get married, you should both put a written estate plan into place (or revise or even revoke the one you had prior to marriage). Most married couples choose to do a joint estate plan, including one joint Living Trust. Your estate plan should, at a minimum, also include these other basic documents:
- Property Agreement (to verify what will be considered community and separate property)
- Durable Power of Attorney for Personal and Property Decisions (such as entering nursing care contracts if you become disabled)
- Advanced Health Care Directive (so the person you choose will be able to make your health care decisions if you can’t)
- HIPAA Authorization (to permit access to your private health information by the persons in charge of your financial and health care matters)
- Possible new title instruments for real estate and other assets
- Proper, up to date beneficiary designation forms for your company retirement plans, IRAs, annuities and life insurance.
If you don’t get legally married, you typically won’t do a joint plan, just a single Living Trust plan or Will, plus the other documents listed above (other than the Property Agreement). In case you may get married in the future, special provisions can be built in to somewhat protect your future spouse if you don’t get around to making a new, joint plan together (which is usually the best course of action).
We Can Help
If you’re a same-sex couple considering your options, particularly with respect to your estate planning, give us a call to set up a free attorney consultation. We’re here to help.
Enjoy Your Birthday Celebration!
By: Jane Lee, John Chang and Elizabeth Guerrero
When our staff was discussing possible articles for this month’s newsletter, they came up with a novel idea. One that they thought many of our clients would especially enjoy. So here it is: the best birthday “freebies” from our local South Bay merchants. (If you live in another area that’s ok, just fast forward to the end of the article.)
Make your birthday extra special by getting more than just a free dessert, which many restaurants will do. Get a free dinner. Some local restaurants do not require that you do any more than just show up with your identification; some restaurants make you work a little harder by signing up with them on their website ahead of time.
For example, on the actual date of your birthday, you can choose between the following:
- Terranea (Rancho Palos Verdes) – show up at Catalina Kitchen (reservation recommended) and get a free Surf and Turf dinner on your birthday (Jane Lee’s pick)
- La Capilla (Torrance) – get a free dinner on your birthday (Elizabeth Guerrero’s pick)
A couple of others that require a little more work, but allow you to enjoy your freebie any day of your birthday month:
- Benihana – get a $30 gift certificate for use during your birthday month, when you sign up on their website (Elizabeth Guerrero’s Pick)
- Red Robin – get a free burger during your birthday month, when you sign up on their website (John Chang’s Pick)
And on the Thursday of your birthday week, try:
- Hennessey’s – get a free dinner on the Thursday (after 5pm) of your birthday week (Jane Lee’s Pick)
And why not arrive in a clean car? Try:
- Red Carpet Car Wash (2141 N. Sepulveda Blvd, Manhattan Beach) – free car wash on the date of your birthday (Elizabeth Guerrero’s Pick)
Or, you can just forget the local restaurants and show up in a clean car and just hop on the Catalina Express, for free, on your special day!
Want more? AARP suggests checking out birthdayfreebies.com.
KM&O Family Spotlight
We’re pleased and honored to pass along that our firm’s founder and President, attorney Philip Kavesh, was recently recognized by the State Bar of California for his 20 years of service to the public as a Certified Specialist in Estate Planning, Trust and Probate Law. (By the way, next month we’ll be celebrating our firm’s 32nd Anniversary!).
Phil was also recently privileged to speak before the national conference of MDRT, the preeminent life insurance industry trade organization, on the overlooked uses of insurance in estate and financial planning. He also was interviewed in The Estate Analyst, a national newsletter for estate planning professionals, regarding his unique technical innovation, the IRA Inheritance Trust®
Keep up the good work, Phil!