Protecting Your Estate from Investment Scams

The record of retirement investment and trust fund fraud is extensive, and not restricted to sales agents, fiduciaries, and retirement investment advisers.


In New York, attorney malpractice in the area of retirement investment and estate planning has led to professional activism by the New York Bar Association and national affiliation the New York Bar Association, and punitive action by the courts. The Lawyers’ Fund for Client Protection is an independent public trust, financed by attorney registration fees.


The Fund reimburses legal clients for “losses caused by dishonest conduct of former New York State lawyers,” including theft of estate assets and falsely promised and paid for legal services. Adopted by the American Bar Association House of Delegates, the Model Rules for Lawyers’ Funds for Client Protection enacted August 9, 1989 is an amendment of the Model Rules for Clients’ Security Funds first ratified in 1981.  

Trustees of the fund have recently recommended new guidelines for expanded due diligence in review of attorney practice to detect and prevent abuse of clients. If ratified, the Fund would require banks to notice of any overdraft on an attorney escrow or trust account; as well as prohibit overdraft protection on such accounts.


NY Public Trust Payout to Victims

In 2015, the Fund paid a record $12.3 million in awards to New York plaintiffs. Last year, $10.6 million in remedies went toward payoff of claims for losses caused by 87 licensed attorneys now suspended, disbarred or deceased. Of those former attorneys, 10 were responsible for over 70 percent of the total claims reimbursement by the Fund. Claimants alleged $29.2 million in losses in 2017, a decrease from the estimated $42.8 million in alleged losses claimed the previous year.


Identifying a Scam

“Living trust mills” are a convincing vehicle used by perpetrators to defraud seniors. New York Code – Article 7, Part 1 Rules to Governing Trusts provides that a trust may be created for any lawful purpose. Yet when hard-earned retirement funds are transferred to questionable annuities products the financial security of an elder’s retirement fund or estate may be at stake.


Seniors are advised to watch for sales agents of estate planners persuading a client to transfer their current assets to annuities pitched as “less risky” or “higher interest earning” products. These calls are generally motivated by commissions, and seniors should be aware that it is illegal for anyone but a licensed attorney to provide direct legal advisory of estate planning.


Questions about the legitimacy of an estate or retirement investment planning advisory service? Contact the Office of the Attorney General or Office of the Insurance Commissioner in your state.

New York Estate Law Firm

Ettinger Law Firm is a licensed New York attorney practice specializing in estate planning and probate litigation. Contact Ettinger Law Firm to schedule a consultation about an estate or trust law related matter.    

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Protecting Yourself from Elder Financial Abuse

The Role of a Trust Protector

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