One estate planning scam is growing in popularity for people who are looking to begin crafting their estate plan and have amassed wealth or business over their lifetimes. The estate planning aggregator claims to do comprehensive planning for people who have concerns about taxes on their wealth or business issues in their estate.
Estate Planning Aggregator
An aggregator is a person who claims to do comprehensive estate planning for individuals with complex estates. Typically, they recommend that you purchase a “wealth blueprint” or something similarly named for tens of thousands of dollars that will detail how exactly your estate will be taken care of.
Once a person agrees to purchase a wealth blueprint and sends in information regarding their estate and assets, the aggregator will create a thick booklet full of flowery discussion of your wealth, all sorts of spreadsheets and discussion that shows how you can reduce your estate taxes to zero, give your assets silver-bullet protection against creditors, and also reduce your income taxes to a pittance. It sounds great, but once you agree to the plan, the scam kicks in.
The Aggregator Scam
The aggregator will inform you that he does not actually do any of the work for the estate plan, but he can recommend the professionals who will know how to get it done. The planner then sends you a letter recommending that you go see Attorney A about drafting one part of the plan and Attorney B about another part. You also have to meet with Insurance Salesman C because you must have life insurance with your estate plan, and do not forget to see Financial Planner D to invest your moneys.
That is the scam of the aggregator – someone who does not make money doing any of the actual planning but makes great money putting together the information into a pretty booklet. For the tens of thousands of dollars that you paid, he took a couple of hours inputting your information into a program, five minutes printing the pages, and another ten minutes to bind it and stick it in the mail.
Sometimes the aggregator will tell you that the reason for the price is the state of the art software that he developed or the countless hours that he spent creating your plan. However, several companies license software to aggregators and claims of their own proprietary software should not be seriously considered.
Strength of the Plan
Some people might think that the aggregator is still worth it because in the end you got an amazing plan, but the aggregator does not know whether his strategies will work or fail. His job is simply to cast a wide net for planners and strategies that he can sell to potential clients. It does not matter if the strategy works as long as it looks like it could create huge savings for the client.
In addition to the tens of thousands of dollars received by the client, the aggregator also makes much more. Each strategy peddler that the aggregator sends a client to also sends him a referral fee for services, depending on what they spend. The planners are usually just mills, meaning that they only do one or two specific transactions but does a lot of them cookie-cutter style. No matter the client’s particular circumstances or needs, the client is going to be squished into fitting that strategy.