Do Not Trust a Trust Miller

Some attorneys have the attitude that everyone needs a revocable living trust for estate planning. They use every trick and argument they can dream up to sell you on the idea. That is because they can charge more for an estate plan that includes a trust than for one that consists of a will and a power of attorney. The document shops are called trust mills and the attorneys who run them are trust millers. There are many predatory trust flacks using various ploys and promises. I also wrote about this a year ago in “Do Not Get Suckered by the Asset Protection Racket.

These attorneys and many trust mills that are run by insurance agencies are like tattoo parlors. If you walk into a tattoo parlor and ask if you need a tattoo, they will tell you that without a tattoo you are ugly and boring. According to them, a tattoo will make you the toast of the town and reinforce your self-image, your id, your ego, your superego and your immune system. Are they biased? Of course! If you do not buy a tattoo, they do not make any money.

I am disgusted by attorneys who run their business like tattoo parlors – pushing trusts on everyone who walks in the door. I recently was approached by a retirement association with a referral book endorsing one attorney, one insurance agent, one “financial planner,” and a few unrelated businesses. The referral book is a transparent marketing scheme by the attorney and his cronies in financial services to sell trusts and insurance products. The section of the book devoted to estate planning is 24 pages aimed at convincing the reader he or she needs an RIVT.

The estate section contains numerous misrepresentations about tax law, arguing incorrectly that property that passes under joint tenancy on the death of the original owner is subject to capital gains tax, among other things. The prize, however, is the attorney’s statement that typical probate fees run from “3% to 8% of the probate estate.” He even provides a table showing grossly overstated amounts. The fees and costs in the table run three to 10 times the fees and costs of most probate estates in Michigan, Pennsylvania, and most other states.

Administering an RIVT-based estate generally costs at least as much as probate, when the price of setting up and funding the trust or trusts is included. Distributing the trust estate is somewhat easier than going through probate, but not by much. The primary difference is that some of the cost is paid earlier, when the trust is set up and funded.

An RIVT or another trust makes sense for many individuals and families. A large group of beneficiaries or beneficiaries with special needs, a complex or delayed distribution scheme, or an estate with a variety of personal and real property could make an RIVT desirable, despite the cost. Unfortunately, many trust millers are more concerned about their own bottom line than they are about the client’s best interests. Clients often show up in my office with expensive estate plans in slick binders that were totally inappropriate to their situations.


John B. Payne, Attorney
Garrison LawHouse, PC
Dearborn, Michigan 313.563.4900
Pittsburgh, Pennsylvania 800.220.7200
©2012 John B. Payne, Attorney

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