Trust Scams: What They Are and How to Protect Yourself
Trusts are powerful estate planning tools—but unfortunately, they’re also frequently used as bait in scams targeting seniors, retirees, and families trying to protect their assets. If someone promises that a trust can eliminate taxes, avoid all creditors, or instantly qualify you for benefits, it’s time to pause. Not all trusts are created equal—and not all advice is legitimate.
What Are Trust Scams?
Trust scams typically involve misleading or false claims about what a trust can do. They are often sold through:
Seminars marketed as “free estate planning”
Cold calls or mailers offering “asset protection”
Non-lawyers posing as estate planning experts
High-pressure sales tactics
The result? Families pay thousands of dollars for documents that may be legally ineffective—or worse, harmful.
Common Red Flags of Trust Scams
Be cautious if someone claims that a trust can:
Instantly protect assets from nursing home costs
Eliminate income or estate taxes completely
Avoid probate and all court involvement under all circumstances
Qualify you for Medicaid without penalties
Replace the need for an attorney
Be the same for everyone
Estate planning is not one-size-fits-all. Any plan that sounds too simple or too good to be true usually is.
Living Trust Myths Often Used in Scams
Many scams revolve around revocable living trusts, which are legitimate tools—but often misrepresented.
A revocable trust:
✔️ Can help avoid probate
✔️ Can help with incapacity planning
A revocable trust:
❌ Does NOT protect assets from creditors
❌ Does NOT shield assets from nursing home costs
❌ Does NOT provide tax immunity
Scammers often blur these lines.
The Danger of “Medicaid Trust” Scams
One of the most harmful trust scams involves false Medicaid planning promises.
Improperly drafted or incorrectly timed trusts can:
Trigger Medicaid penalties
Disqualify applicants from benefits
Create tax problems
Leave families scrambling during a crisis
Medicaid planning is complex and highly state-specific. Anyone promising “guaranteed Medicaid approval” is misleading you.
Why These Scams Are So Harmful
Trust scams don’t just waste money—they can:
Invalidate legitimate planning
Create tax liabilities
Force families into probate anyway
Delay benefits
Cause irreversible damage
By the time families discover the problem, fixing it may be costly—or impossible.
How to Protect Yourself
Here’s how to avoid trust scams:
1. Work With a Licensed Estate Planning Attorney
Estate planning is legal work. Make sure your advisor is licensed in your state and practices in this area of law.
2. Ask Direct Questions
Ask what the trust can and cannot do. Honest professionals explain limitations clearly.
3. Be Wary of Pressure
Scammers thrive on urgency. Legitimate planning allows time for questions and reflection.
4. Avoid “Seminar-Only” Sellers
Education is helpful—but documents should never be sold without individualized legal advice.
5. Get a Second Opinion
If something feels off, it probably is. A review by a qualified attorney can save you thousands.
What to Do If You Already Have a Trust
If you already have a trust and are unsure whether it’s legitimate:
Have it reviewed by an estate planning attorney
Do not assume it provides protection without confirmation
Review funding, tax consequences, and compliance
Many problems can be fixed—if caught early.
Final Thoughts
Trusts are valuable tools—but only when used correctly and honestly.
If someone promises a trust that solves every problem, protects every asset, and requires no trade-offs, you’re likely being sold a fantasy—not a plan.
Protect your legacy by working with qualified professionals and asking the right questions.