Probate Law News

Swanson Files Suit Against American Family Legal Plan And Heritage Marketing And Insurance Services

Attorney General Lori Swanson today filed a lawsuit against two California companies, American Family Legal Plan and Heritage Marketing and Insurance Services, Inc., for operating a “trust mill” that preys upon Minnesota senior citizens.

Swanson said that American Family Legal Plan initiates a “trust mill” scheme through a direct mailing to senior citizens, telling them that the company has special expertise in estate planning and can advise clients on how to avoid estate taxes and probate fees. If the senior citizen responds positively, Swanson said an agent posing as an estate planner meets the senior citizen at home and sells the person a plan for $2,000 or more. Swanson said that during this meeting, the agent will distort and misrepresent the impact of probate fees and estate taxes, causing the senior citizen to buy the trust out of fear that their heirs will lose the estate.

“These companies deceptively sold boilerplate living trusts to senior citizens regardless of whether those trusts were suitable for the seniors’ estate planning or financial needs,” Swanson said.

Swanson said the first half of the profit scheme is the “trust mill.” After the first meeting with an agent, the senior receives one short telephone call from an attorney who asks very general questions. Thereafter, regardless of the senior’s assets, marital status, existing estate plan, or the likely tax or probate liability, the attorney approves the use of a boilerplate “living trust” for the client. The attorney does not have a personal meeting with the senior, nor does the attorney ask specific estate-related questions. American Family Legal Plan agents receive a commission of approximately $600-$800 for each living trust sold. Read more at ag.state.mn.us.

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