Unauthorized Practice of Law: Trust Mill Fined $6.4 Million

Unauthorized Practice of Law: Ohio "Trust Mill" Fined $6.4 Million

Beware of non-lawyers who try to scare you into taking unnecessary action

In a precedent-setting case, the state of Ohio has punished a father and son team for their unauthorized practice of law.

This story spotlights the obvious reasons why people should have their living trusts and other estate planning documents prepared only by a qualified estate planning attorney. If you are considering “buying” a trust from a non-lawyer, consider what happened in Ohio.

The Ohio Supreme Court ordered two companies that duped thousands of senior citizens into buying unneeded legal plans and annuities to pay $6.4 million in fines and barred them from doing business in the state.

The companies, American Family Prepaid Legal Corporation and Heritage Marketing and Insurance Services, Inc., are co-owned by Jeffrey and Stanley Norman.

The Ohio bar association initiated the action, accusing the Normans of running an illegal “trust mill” from 2003 through 2005. The lawsuit further alleged that, through threats and promises, the Normans pressured senior citizens into buying $2,000 in pre-paid legal services and annuities.

According to Law.com, American Family bought lists of residents aged 65 and older and sent postcards with warnings about huge probate costs. People who responded to the cards (and some who didn’t) were called to set in-home appointments with sales representatives.

The salespeople, who were not attorneys, misrepresented the probate process and used high-pressure tactics on customers to sell them plans that purported to include an array of legal services. However, in nearly all cases, the only legal “service” was the creation of a living trust portfolio.

Customer financial information was passed to an attorney in the company’s Ohio office and then forwarded to its California office, where trust documents were completed and sent back to Ohio.

Heritage Marketing, which shared offices with American Family, delivered the documents to customers to be signed and notarized. While there, Heritage agents would try to sell them insurance and annuities.

The key point of this story: Only a qualified estate planning attorney can reliably review a client’s financial and legal circumstances and offer solid legal advice for planning purposes.

Hoopes, Adams & Alexander, PLC, is a Chandler, Arizona, law firm offering services to Phoenix-area clients in the areas of estate planning, entity formation, commercial and real estate transactions, and civil litigation.