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Minnesota’s attorney general became the third attorney general to file suit against two California companies that allegedly sold inappropriate living trusts and annuities to seniors. Last year, state attorneys general in Pennsylvania and North Carolina filed suit against the same companies. In 2006, the North Carolina attorney general won an order preventing the companies from selling products in the state while the lawsuit against it is pending.
According to the lawsuits, the two companies, both run by a father and son from California, convinced seniors they were receiving impartial investment advice when in reality the companies were pushing their own products. The lawsuits allege that sales agents convinced seniors to purchase living trusts that were not necessarily in their best interest and were not tailored to their individual needs. After consumers agreed to purchase the living trust plans, the agents allegedly persuaded them to exchange or convert their investments for annuities, even if the annuity would have a negative financial impact or tax consequence.
In one case, an 85-year-old Pennsylvania man was allegedly sold a 10-year deferred annuity with his first payout not coming until he turned 95. In North Carolina, according to the attorney general’s charges, an agent convinced a couple in their seventies to cancel an insurance policy, cash in their investments, and put all of their savings into an annuity that he promised would earn 7 percent interest. The agent didn’t tell them the interest rate was guaranteed for only one year and they would face steep penalties if they needed to withdraw their money. Another North Carolina woman cashed in an IRA to purchase an annuity after the sales agent allegedly told her the IRA would run out of money in five years. He allegedly didn’t tell her that the annuity would cut her monthly income from $1,700 to less than $300. There are a number of steps you can take to avoid getting scammed, including avoiding high-pressure sales tactics and highspeed sales pitches, not trusting companies that say the AARP is selling or endorsing their product, and making sure a living trust is properly funded. In addition, to help older adults and families make better decisions about annuities, the Healthcare and Elder Law Programs Corporation (H.E.L.P.) has created a Web site, www.annuitytruth.org. The site features H.E.L.P.’s new seven-part “Special Report: Annuities and Older Adults,” as well as a list of federal and state agency contacts for making complaints if a person has been sold an annuity in unsuitable circumstances.

Of course one of the most important things you can do is make sure you get estate planning advice from a qualified elder law attorney.

http://www.ctseniorlaw.com/download/pro_news_mayjun07.pdf

Enitre Newsletter

Figuring out how to plan your estate can be a big job. Here are some common questions and answer that may help you.

What is an estate plan?

An estate plan is a systematic plan for the accumulation, conservation and distribution of an estate. A good estate plan minimizes taxes and accomplishes the owner’s goals efficiently and effectively. When the owner dies, the estate plan distributes the estate with minimum administrative costs. The sooner an estate plan is made, the more effective it can be.

Should I have a will if I don’t have children?

Everyone should have a will, including you and your spouse. Believing that everything the two of you own will pass automatically to the surviving spouse when one of you dies is a risky proposition. Your property could be distributed according to the state’s inheritance laws instead of going directly to the surviving spouse.

Should I set up a trust, or do I even need one?

It depends on the size of your estate and the purpose of the trust. If your estate is under the current estate tax exemption amount ($2 million for 2006 through 2008, and $3.5 million for 2009) and small enough to qualify for quick and inexpensive probate in your state, you might not need one. However, a trust can help you avoid a court hearing if you become incompetent or unable to provide for yourself, or if you want to provide for grandchildren, minor children, or disabled relatives. What happens to my 401(k) account when I die? If you designated beneficiaries when you signed up for a 401(k) account, they receive the money in your account when you die. Otherwise, your estate automatically becomes the beneficiary. If your beneficiary is your spouse, he or she has most of the same options that you would have if you were leaving your company to take another job.

 http://ocelderlaw.org/blawg/index.php?itemid=72