Living Trusts: A Scam?
A 2009 article on CNN.com mentioned that scores of people are being sold on the idea of buying a “living trust” when they really don’t need one.
Living trusts are designed to hold all assets until a person’s death, at which time the trust distributes the assets to the person’s beneficiaries. The article points out living trust kits, which run around $2,000, are being sold door to door or over the phone. The salespeople sometimes use scare tactics such as “your estate will be eaten up by taxes if you don’t have a living trust” or “your estate could be tied up for years if you don’t have a living trust”.
The article mentions that the only people who really might need a living trust are those with loved ones with special needs, who own a business, or own real estate in more than one state. According to the AARP, only about 5% of the population needs a living trust.