Consumers Hoping to Avoid Legal Expenses Victimized…Again
We’ve all encountered clients over the years who have created terrible messes for themselves–sometimes messes we can’t fix, and sometimes messes that take months and thousands of dollars to untangle when the initial process would have been very quick and inexpensive by comparison. It’s certainly understandable when consumers, unfamiliar with the intricacies of the legal process, hope to simply handle things on their own and save some time and money. It often works out very poorly, but it’s an understandable impulse.
The impulse to profit off of those very people by promising them something comparable to legal services without the necessary qualifications is less understandable in my book. In fact, it’s reprehensible. We saw a version of this in February, when the Ninth Circuit Court of Appeals upheld a ruling that a seller of bankruptcy petition software was a “bankruptcy petition preparer” under the law.
In that case, bankruptcy petition software had been touted as “an expert system” that could aid the consumer in selecting exemptions, populate information entered by the consumer to the right areas of the petition and schedules, and even provide “stealth techniques”. Ironically (but not surprisingly) the software came to light when a trustee discovered errors in a petition and learned that it had been prepared using the “expert system” in question.
Now, the Minnesota Attorney General is suing two California companies who have taken the same concept to a much more profitable level. American Family Legal Plan and Heritage Marketing and Insurance Services, Inc. aren’t preparing bankruptcy petitions, though–they’re preparing trusts.
According to the Attorney General’s office, the companies market estate planning services to senior citizens by direct mail. Then, an agent purporting to be an estate planner meets with the prospective clients at home and distorts and misrepresents the impact of probate fees and estate taxes. The agents then sell boilerplate “living trust” plans to each client, regardless of assets, marital status, existing estate plan, etc. The plan is “approved” by an attorney who never meets with the client, and the agent receives a commission of $600-800.
The Minnesota Attorney General’s office also indicated that the companies were the subject of lawsuits in at least two other states, North Carolina and Pennsylvania.
Sadly, in many cases the senior citizens apparently victimized by these companies could have received personal estate planning advice and document preparation from a qualified estate lawyer for about the same amount of money paid out to these companies for one-size-fits-all documents that might not protect their particular interests at all.
April 13th, 2007 at 6:30 pm
I am so glad I saw this. I have a relative who just called me about this great wonderful trust estate plan that American Family Legal Plan has presented to her. I asked why she went to Pittsburgh for this when we have many fine lawyers in our own town. She proceeds to tell me they told her that no one in our town does this type of thing. I find that difficult to believe. I started searching the company on the web and becoming very concerned