WASHINGTON (AP) _ When 84-year-old Walter Kulinski was approached by salesmen about establishing a living trust, the Wisconsin man thought he had found people to help him provide for his heirs after he was gone.

Now just over two years later, with Kulinski in failing health, his family says he was sold a poorly written trust and bilked out of thousands of dollars.

``The elderly don't realize that everyone they interact with may not be legitimate,'' Judy Kulinski, the man's daughter-in-law, told a Senate hearing Tuesday. ``With the increasing numbers of elderly adults, we need to find a way to protect them from today's not so trusting world.''

Lawmakers say the Kulinskis aren't alone. Each year scores of seniors are targeted for costly living trusts that are often not needed; many still have no idea their documents are worthless.

Lawmakers held Tuesday's hearing to study the issue and weigh whether action should be taken on the federal level.

A recent AARP study found that 18 percent of people over the age of 50 and with incomes of $25,000 or less had a living trust. That's a 125 percent growth in the number of people in that category who had living trusts in 1991, officials said.

``Anecdotal evidence suggests that those with modest means, who have the least amount to pass on to their heirs, are being sold a high-priced package through aggressive financial planning promotions. . .,'' AARP president Tess Canja told the Senate's Special Committee on Aging.

``Living trusts are being hyped by salespersons _ not lawyers _ who want to sell products,'' Canja said.

Often, Canja said, the salespersons' material falsely suggests that AARP endorses or supports the product even though AARP does not endorse any company that markets or sells living trusts.

Seniors ``need to be aware that these scams exist,'' said Sen. Chuck Grassley, R-Iowa and the committee's chairman. ``Living trusts aren't for everyone.''

A living trust is an increasingly popular estate planning tool that allows an individual to set up a trust for his or her assets. The assets must be turned over while the individual is still living for the trust to go into effect. The trusts are most often used by those who want to avoid the probate process, which can be time-consuming.

Many living trust sales outfits are legitimate and can be useful for those with complicated estates and distribution needs, particularly those with estates larger than $675,000 _ the maximum estate allowed before federal estate taxes kick in.

The problem is that companies are targeting seniors of modest means who don't require complicated legal products.

Adding to the concern, officials said, are boilerplate trusts that don't conform to the various state laws. Many seniors are also sold other expensive financial products during the transaction.

In the Kulinski case, the Pewaukee, Wis., man's trust was drawn up based on California laws and never filed, the family said. Adding to the family's woes, Walter Kulinski's IRA was later transferred to another firm and a 30-year annuity was set up, liquidating over $280,000 from mutual funds and stocks.

Kulinski's failing memory forced prosecutors to drop the case and allow restitution. Still, Judy Kulinski estimates her father-in-law lost over $30,000 from the incident.

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On the Net: AARP http://www.aarp.org

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