5 Estate Planning Scams To Avoid

According to Caring.com’s 2024 Wills and Estate Planning Survey , only 32% of Americans have a will — a 6% drop from last year. This is the first time since 2020 that the amount of Americans with a will has dropped despite 64% of respondents stating that they felt having a will was very or somewhat important. If you’re one of those who intend to do some estate planning in the near future, there are various scams that you should be aware of.

We will list five common estate planning scams and share advice on avoiding them.

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Living Trust Mills Scam

“This is where scammers pretend to be estate planning attorneys or financial advisors and offer cheap trust packages,” said Nate Towers, chartered retirement planning counselor (CRPC) and founder and director of Five Pathways Financial . “They usually target seniors, using a lot of pressure to sell these generic, one-size-fits-all trust documents.”

Experts know this is a significant estate planning scam to watch out for, as aggressive salespeople attempt to defraud seniors out of their savings.

“Living trust mills involve salespeople posing as estate planning experts who use high-pressure sales tactics to convince individuals, especially seniors, to purchase unnecessary or inappropriate living trust packages,” explained Chris Kalbfell, legal counsel at The Estate Registry . “These scams often come with hidden fees and poor advice that may not serve the individual’s best interests.”

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How You Can Avoid This Scam

Since this is one of the most common estate planning scams, there are many clear warning signs that you should watch out for. Towers noted that you should be skeptical of unsolicited seminars, aggressive sales tactics or offers for “free” estate planning documents that come with hidden costs.

Here are a few other tips to help you avoid this scam:

• Immediately leave a high-pressure sales setting
• Don’t sign any documents you don’t understand
• Always verify the information with a trusted attorney

Excessive Fees Scam

Excessive fees are a common type of scam in estate planning, and they can impact you in multiple ways. You can be hit with upfront expenses and then get additional bills along the way. You want to be cautious of unexpected fees since the rates can shoot up and you could be nickel and diming for every modification you attempt to make.

“You may get a quote for one price and then as you add documents to your estate plan like a health care proxy or power of attorney, the fees go up and up,” said Renee Fry, CEO of Gentreo , an online estate-planning company.

How You Can Avoid This Scam

“Understand the typical hourly or flat fees for estate planning services in your area to avoid overpaying,” Kalbfell explained. “Get quotes from multiple reputable professionals and ensure you receive a clear breakdown of all costs involved.”

Fry added that you should get a quote upfront that includes all the documents you want handled so that you won’t be hit with unexpected fees in the future.

DIY Forms Scam

“There are many internet services that purport to provide easy template estate planning documents which not only may charge inflated fees for drafting standard estate planning documents, such as wills or powers of attorney but may also be inappropriate or unenforceable under your state’s laws,” Kalbfell said.

While it may be tempting to use a quick do-it-yourself form that you find online, it’s crucial to remember that professionals should handle estate planning since matters can be fairly complex.

How You Can Avoid This Scam

“One of the best ways to protect yourself and the estate when planning an estate is to consult with a licensed estate planning attorney and financial professional in your state,” Kalbfell explained.

Estate planning isn’t something that you should take lightly and you want to ensure that the correct professionals are involved during the entire process.

Heir Locator Scam

Another scam Towers heard about from clients is the heir locator scam. “This is where scammers claim they’ve found unclaimed assets that belong to you or a relative who passed away and then they charge a hefty fee to help you recover them,” he added.

Towers said these assets usually don’t even exist and that innocent people can be scammed out of thousands of dollars.

How You Can Avoid This Scam

Towers noted that you can spot this scam if the person asks for money upfront or wants personal information, as these are obvious red flags. According to AARP, your best bet is to throw out any correspondence that you receive randomly from someone claiming that you’ve inherited any money. You should also never share any financial information with an unverified stranger.

Bogus Charity Scam

Towers pointed out that one of the worst scams encountered is the bogus charity scam. Scammers try to convince people to leave part of their estate to a fake charity or ask for donations for a cause that doesn’t exist.

How You Can Avoid This Scam

“Be cautious if someone is pressuring you to change your estate plan in favor of a charity, especially if you don’t know much about it,” Towers said. “If you’re unsure, you can check sites like GuideStar or Charity Navigator to see if the charity is legitimate.”

If you’re still unsure about a charity, your best option is to hold off until you can verify its legitimacy.

“Use a reputable source that specializes in estate planning,” Fry added. “Know what you’re shopping for and what you want to pay and you are well on your way to protecting yourself from estate planning scams.”

This article originally appeared on GOBankingRates.com : 5 Estate Planning Scams To Avoid