Criminals are Sophisticated Scammers
Are you or someone you know, someone that you think could be taken advantage of by someone close or a stranger taking advantage of them in person or over the internet?
Proper estate planning can minimize the risk that a person would lose their assets to these unscrupulous people. There are many techniques to bring security to these individuals. One such method we utilize is known as the “Vault Trust”. With this type of system, we utilize a document very similar to an irrevocable life insurance trust. However, typically, with an irrevocable life insurance trust, the trustor retains the right to appoint, change, or fire the trustee that they have named. The trustor, settler, or creator of the trust is not the trustee themself but rather they have appointed someone else, many times their children, grandchildren, others, or corporate trustee.
Vault Trusts
Although irrevocable trusts are very good for certain purposes such as Medicaid planning or gifting money to grandkids but not yet wanting them to have access to it. It is not the best when it comes to asset security. In the Vault Trust, however, certain rights of the trustor are removed and instead assigned to what is called the trust protector. This would be a second person whom they very much trust to look out for their best interest. This could be a relative, their attorney, CPA, some other professional, or a corporate trustee who has the power to appoint, fire, or change the trustee of a trust.
By creating a Vault Trust, the trust protector can step in in the unfortunate case an unscrupulous person attempts to gain control of the Trustor’s assets by manipulating or threatening the trustor. Here, the Trustor puts their house in the trust along with their bank accounts and other assets. As they get older, become more infirm, and less mentally strong, they are approached by someone whether it be in person, over the phone, internet, or otherwise who tricks them into thinking they need to give them money. This person may have full access to their bank account where their Social Security is deposited, may have the ability to trick them out of some money, maybe even sizeable money, and the person will not let up. Criminals do not stop before they have taken everything they can take. The person then might want them to deed their house to them or get a loan on the house and give them the money. Fortunately, in the Vault Trust, the trustee is the only person who deeds the house out of trust or allows a mortgage to be placed on the house, the house gifted, or encumbered in any way.
Protecting Your Assets
Criminals are sophisticated. They may ask the person for legal documents and when they review it they may find that the person they are scamming does not have the ability to fire the trustee, but instead, the scammer must contact this trust protector and try to convince them to fire the trustee. This won’t happen because the person who is appointed is someone who is clear-headed and sophisticated enough to understand the situation and refuse to do what the scammer wants. This means the house and other significant assets remain in trust and are totally protected.
The beauty of this is that the trustee can be given specific and sole authority over certain assets placed in the trust, which means that even if the trustor is scammed out of some of their money the bulk of the assets are locked up and protected.
There are many variations that can occur with this trust. Again, if you or someone you know feels that they may be at risk of some type of financial predator, please give us a call.
