Ohio Department of Insurance Director Mary Jo Hudson and Ohio Attorney General Richard Cordray would like to warn Ohio seniors about operations known as "Trust Mills" that prey on the elderly and often convince seniors to purchase inappropriate estate planning documents and financial products. Trust mill operators typically solicit senior citizens by mail or by telephone and offer "free" information about trusts, wills and taxes. In order to provide seniors with a sense that they are a legitimate business enterprise, they will often hold seminars or programs at senior centers, assisted living centers or churches.

During a presentation, a "trust advisor" or "senior estate planner" will inform the senior citizen of the incredible expenses and awful frustrations their heirs will encounter during the probate process. The individual will then inform the senior that they can take measures to avoid the probate process all together through the establishment of a living trust. What is important for seniors to realize is that in most cases, the individuals masquerading as qualified financial advisors, estate planners and lawyers experts in estate planning are really insurance agents looking to sell senior citizens insurance and financial products.

As part of a trust mill scheme, a senior will pay a substantial amount of money to have their living trust prepared. Shortly after the sale has been made, the sales agent will set up a second visit so they may deliver the trust and have all pertinent documents signed. Typically, during the second visit, the agent will go over all of the assets to be placed in the trust. After learning about an individual's CD's, mutual funds, or other investments, the sales agent will often scare the senior into believing their investments are unsafe and will recommend that they purchase an annuity.

In trust mill scams, the sales agent will often misrepresent the annuity products they are selling. Typically, the sales agent will fail to disclose substantial surrender penalties and adverse tax consequences a consumer will face by transferring their assets into an annuity. While annuities are a worthwhile investment vehicle, they are very complex financial products. Prior to placing money in an annuity, a consumer should take time to research the product being offered as annuities are not always suitable for everyone.

There are a number of problems with the products sold by trust mills:

* The trusts that are sold are usually not tailored to a consumer's specific needs, but are mass produced from standard forms. At times, the forms are not properly prepared and cause a senior tax problems that could have been avoided.

* In order to avoid the probate process, assets must be transferred to a trust. At times, trust mill operators will fail to oversee the transferring of the assets if an annuity is not purchased, so the trust ends up to be a worthless probate avoidance device.

* Consumers are charged huge fees for what turns out to be pre-printed forms.

Important Consumer Tips:

* If you are approached by a company selling trusts, do not allow yourself to be pressured into purchasing an estate planning product. Ask for time to consider what the company or individual is selling.

* Determine if any complaints have been filed against the company or individual by calling the Better Business Bureau and the Attorney General's Consumer Protection Division.

* Ask the sales representative to provide you with identification and a description of his or her qualifications, education and expertise in estate planning.

* Contact the Ohio Department of Insurance or the Department of Commerce to see if the individual is a licensed insurance agent or securities broker.

* Contact the local bar association to verify if the individual selling trust services has been admitted to practice law in your state.

* Consult with a lawyer or financial advisor who is knowledgeable in estate planning before considering a living trust.

Consumers who feel they have been the victim of a trust mill should contact the Enforcement Division of the Ohio Department of Insurance at 1-800-686-1527