Everywhere I turn I see slick salesman (some attorneys, some not licensed to practice law) pitching living trusts and annuities. When used correctly, they are both great tools to accomplish certain goals. When used in the wrong situation, then you have a problem. California recently made the news with an action against an insurance and annuity company. I imagine this trend will grow through all the states as the seminar wave sweeps across the country.
A California company will pay $7.2 million to settle allegations that it misled thousands of senior citizens into purchasing unsuitable annuities.
The settlement will be paid by Family First Advanced Estate Planning and Family First Insurance Services; John Owen, president of Family First Insurance; and American Investors Life Insurance of Kansas.
About $5.5 million will be used to reimburse clients who purchased annuities, while the balance will go to civil penalties and administrative costs.
The suit filed by the California Department of Insurance and the Attorney General's Office alleged that the companies deceived victims into purchasing thousands of living trusts and related services, and misled them into buying annuities worth hundreds of millions of dollars.