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“Trust Mill” Shut Down, But State Pays Parent Company

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Fremont Life Insurance Company did a profitable business selling seniors living trusts. They used the usual pitch: avoid probate and the legal system, save on taxes and simplify your estate plan. Oh, and while we’re helping you plan your estate we think you should buy an annuity from our insurance company.

The State of California sued to stop Fremont Life and its parent company, Fremont General Corporation, from engaging in its deceptive business practices. The State alleged that agents of both Fremont Life and its parent practiced law without a license, and misled purchasers selling them insurance products without disclosing that there were substantial surrender charges.

California’s Attorney General argued that Fremont Life and Fremont General together operated an abusive “trust mill.” The practice is widespread throughout the country: seniors are lured to seminars about how to avoid probate and end up buying inappropriate and expensive annuities.

Fremont General acknowledged that it might lose the litigation, and offered to pay the State $2 million to avoid trial. The California Attorney General declined the offer and proceeded with the case. The State ultimately won a $2.5 million judgment against Fremont Life, along with an order that it return money to its annuity purchasers. The State’s claim against the parent company, however, failed; it did not show that Fremont General Corporation was really just another name for Fremont Life, or that Fremont General employees were involved in a conspiracy with Fremont Life agents.

Because the $2 million offer of judgment was more than the State recovered, court procedural rules permitted Fremont General to seek its court costs from the State. The reasoning behind the rules: when a plaintiff refuses what turns out to have been a reasonable offer of settlement the defendant should not be penalized by having to pay for unnecessary litigation. The effect in the Fremont General case was dramatic.

Court costs and expert witness fees incurred by Fremont General in its successful defense totaled over $880,000. The State of California was ordered to pay that amount, despite the fact that it had prevailed in its lawsuit against Fremont Life. The State appealed.

In its appeal the State argued that it would be against public policy to make the government pay for an action in which it sought to enforce rules against the unauthorized practice of law. The State also insisted that it could not have accepted the offer of settlement in any event, since it would not have known how much of the money should be repaid to the customers it alleged had been defrauded. Both arguments were rejected. People v. Fremont General Corp., June 14, 2001.

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Robert B. Fleming


Robert Fleming is a Fellow of both the American College of Trust and Estate Counsel and the National Academy of Elder Law Attorneys. He has been certified as a Specialist in Estate and Trust Law by the State Bar of Arizona‘s Board of Legal Specialization, and he is also a Certified Elder Law Attorney by the National Elder Law Foundation. Robert has a long history of involvement in local, state and national organizations. He is most proud of his instrumental involvement in the Special Needs Alliance, the premier national organization for lawyers dealing with special needs trusts and planning.

Robert has two adult children, two young grandchildren and a wife of over fifty years. He is devoted to all of them. He is also very fond of Rosalind Franklin (his office companion corgi), and his homebound cat Muninn. He just likes people, their pets and their stories.

Elizabeth N.R. Friman


Elizabeth Noble Rollings Friman is a principal and licensed fiduciary at Fleming & Curti, PLC. Elizabeth enjoys estate planning and helping families navigate trust and probate administrations. She is passionate about the fiduciary work that she performs as a trustee, personal representative, guardian, and conservator. Elizabeth works with CPAs, financial professionals, case managers, and medical providers to tailor solutions to complex family challenges. Elizabeth is often called upon to serve as a neutral party so that families can avoid protracted legal conflict. Elizabeth relies on the expertise of her team at Fleming & Curti, and as the Firm approaches its third decade, she is proud of the culture of care and consideration that the Firm embodies. Finding workable solutions to sensitive and complex family challenges is something that Elizabeth and the Fleming & Curti team do well.

Amy F. Matheson


Amy Farrell Matheson has worked as an attorney at Fleming & Curti since 2006. A member of the Southern Arizona Estate Planning Council, she is primarily responsible for estate planning and probate matters.

Amy graduated from Wellesley College with a double major in political science and English. She is an honors graduate of Suffolk University Law School and has been admitted to practice in Arizona, Massachusetts, New York, and the District of Columbia.

Prior to joining Fleming & Curti, Amy worked for American Public Television in Boston, and with the international trade group at White & Case, LLP, in Washington, D.C.

Amy’s husband, Tom, is an astronomer at NOIRLab and the Head of Time Domain Services, whose main project is ANTARES. Sadly, this does not involve actual time travel. Amy’s twin daughters are high school students; Finn, her Irish Red and White Setter, remains a puppy at heart.

Famous people's wills

Matthew M. Mansour


Matthew is a law clerk who recently earned his law degree from the University of Arizona James E. Rogers College of Law. His undergraduate degree is in psychology from the University of California, Santa Barbara. Matthew has had a passion for advocacy in the Tucson community since his time as a law student representative in the Workers’ Rights Clinic. He also has worked in both the Pima County Attorney’s Office and the Pima County Public Defender’s Office. He enjoys playing basketball, caring for his cat, and listening to audiobooks narrated by the authors.