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Living Trust , Reverse Mortgage, and Annuity Scam Alert!

     If you are 65 years or older and have purchased an annuity from one or more of the below listed methods, you maybe entitled to a refund, monetary damages, and attorney fees:

            1.  Purchased a annuity from your bank, savings and loan, or credit union;

            2.  Attended a Living Trust Seminar;

            3. Attended a Financial Planning Seminar;

            4. Purchased an Annuity from funds that were received from a Reverse Mortgage.


Living Trust Mill Scams

     Sales agents, posing as expert estate or financial planners, often  using bogus titles, such as “trust advisor”, “senior estate planner”, or “paralegal”, then schedule follow-up appointments after the seminars with seniors in their homes.  These agents are sales persons, not experts in estate planning, and they usually are paid high commissions on the trust packages and annuities that they sell.  Their goal is to sell their products, not protect the interests of the senior.
     Sales agents are not attorneys, but they may mention an attorney who supposedly prepares the trust and represents the senior’s interests.  An attorney may even appear at the seminar. 

     Under the guise of helping the seniors to set up or update a living trust, the sales agents find out about the seniors’ financial assets and investments.  Seniors rarely understand that the so-called expert they begin to trust is using the living trust as a means of selling them an investment to replace the investments they presently have.

     Usually, the sales agents schedule a second home visit to deliver a completed trust and have notarize the trust and other documents. 

     In most situations the agent is a notary public. Typically, the agents go over the  assets to be placed in the trust and use that review to scare seniors into believing that their investments are unsafe and that by “moving” their money, they can earn higher interest with no risk.  The agents are actually insurance agents who are there to try sell annuities.  The  agents may have the senior sign documents to transfer the senior’s CD, mutual fund accounts or other investments to these other investments.

     Documents, prepared by Living Trust Mill agents, may not comply with California law, or the agents may not follow procedures set by law for executing or witnessing wills and other documents, which can make the documents subject to challenge.  

    These sales agents fail to disclose possible adverse tax consequences or early withdrawal penalties that may be incurred when transferring stocks, bonds, certificates of deposit or other investments to annuities.  Some agents fail to disclose substantial surrender penalties that apply on death or if an annuity is canceled during the first 5 to 10 years, or more, of a proposed annuity. 

     Agents have been known to make seniors believe their bank accounts are less safe than the annuities or other investments the agents are selling.  They may falsely claim that no one has ever lost any money in an annuity, that annuities are fully guaranteed by the state or that annuities are safe.  Annuities are not 100% safe and only a portion is guaranteed by the state.  Insurance companies can and do fail, and their assets may not be enough to pay the full value of their customer’s investments. 

     According to Attorney General of California, William Lockyer, "living trust mills" often solicit senior citizens by telephone, mail or seminars, offering “free” information about trusts, wills or taxes, or the need to update an existing trust.  Lockyer continues, “To give their unlawful businesses legitimacy in the eyes of seniors, living trust mills may offer to do free seminars or other programs at senior centers, assisted living centers, churches, or other places where seniors gather.”

Reverse Mortgage and Annuity Sales Scam.

         In recent months complaints about misleading marketing tactics and, worse, pressure to buy inappropriate investment or insurance products, including annuities, with the proceeds of the a reverse mortgage loan are on the rise.

       Although Reverse Mortgages do serve a need for some people, there are sales people who prey upon seniors who have obtained a reverse mortgage.  Many of the marketing material is being sent to unsuspecting people that look like official government notices.  Loan sales people are being ugred to sell annuities and other investments with a reverse mortgage. The loan compaines promise large commission for their sales people who sell annuities with a reverse mortgage loan."    

     A study recently released by AARP finds that nearly one in ten reverse-loan borrowers had other financial products recommended to them by lenders -- usually investments, annuities or long-term-care insurance. 

            If You Believe That You or a Loved One Has Been Victimized, report it to your local district attorney and the California Department of Insurance OR call the Attorney General’s Public Inquiry Unit. 

If you should have additional questions you may find the answers on our website at www.HarlanTrusts.com.  Or you may call our office at (714) 449-3360 or Toll Free at (888) 751-1437.

This Information is for general information purposes only and does not constitute legal advice.