Administrative Company

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IN THE MA TIER OF THE ADMINISTRATIVE COMPANY, ET AL.

CONSENT ORDER, ETC., IN REGARD TO ALLEGED VIOLA TION·OF SEC. 5 OF THE FEDERAL TRADE COMMISSION ACT Dockets-3731. Complaint, April 14, 1997--Decision, April 14, 199.7 This consent order prohibits, among other things, a Texas-based corporation and its officer from making certain false, misleading or unsubstantiated cla~ concerning the benefits and appropriateness of living trusts or any legal instrument or service they offer and requires the respondents to clearly and conspicuously disclose to conswners that such trusts may be legally challenged on stmilar grounds as wills, that living trusts may not be appropriate in all instances, and that the transfer of an individual's assets into a living trust is not included in the price of creating the trust. Appearances For the Commission: Elizabeth M. Palmquist. For the respondents: Tony Chiccio, Chiccio & Associates Dallas, TX.

COMPLAINT The Federal Trade Commission, having reason to believe that The Administrative Company, a corporation, Michael P. Mcintyre, individually and as an officer and director of The Administrative Company, and Pre-Paid Legal Services, Inc. ("Pre-Paid"), a corporation (collectively, "respondents"), have violated the provisions of Section 5 of the Federal Trade Commission Act, as amended, 15 U.S.C. 45, and it appearing to the Commission that a proceeding by it in respect thereof would be in the public interest, alleges: PARAGRAPH 1. Respondent Michael P. Mcintyre's current address is 4328 Hollow Oak, Dallas, Texas.

Respondent The Administrative Company has ceased doing business. Its address is the same as that of Michael P. Mcintyre. Respondent Pre-Paid Legal Services, Inc., is an Oklahoma corporation, with its principal office or place of business at 321 E. Main Street, Ada, Oklahoma.

PAR. 2. Respondents, at all times relevant to this complaint, have advertised, promoted, offered for sale, and sold living trusts to consumers. A living trust is a trust into which an individual can place all of his or her assets during his or her lifetime and, by transferring Complaint 123 F.T.C. ownership of the assets to the name of the trust, thereby remove the assets from the individual's estate.

PAR. 3. The acts and practices of respondents alleged in this_ complaint have been in or affecting commerce, as "commerce" is defined in Section 4 of the Federal Trade Commission Act. PAR. 4. In the course of marketing their products to the public, respondents, directly or through commissioned sales agents, have caused to be disseminated sales literature concerning living trusts, including, but not necessarily limited to, the attached Exhibits 1 and 2. This literature contains the following statements: (a) It is your legal right as a UNITED STATES Tax Payer to establish a Living Trust. By establishing a Living Trust, at your death your estate avoids PROBATING YOUR WILL which can COST SEVERAL THOUSANDS of dollars in legal and executor fees and TAKE SEVERAL YEARS before being transferred to your family and loved ones. YOU RETAIN FULL CONTROL OF ALL ASSETS! YOU COULD SAVE THOUSANDS OF HARD EARNED DOLLARS! Exh. 1. (b) A LIVING TRUST eliminates ALL PROBATE FEES and COST.... With a LIVING TRUST, your family will not have to go through probate, and can avoid paying expensive probate fees and costs. Exh. 2, p. 18. (c) A LIVING TRUST allows a quick DISTRIBUTION to your heirs. Assets in probate court are often frozen two years or more, even with a: WILL. A LIVING TRUST allows these same assets to be distributed within days to your loved ones, since a LIVING TRUST avoids Probate Court. Exh. 2, p. 17. (d) Total assets [pass through a] living trust [to] spouse or heirs [in] 1-3 days. Exh. 2, p. 24.

·(e) A LIVING TRUST prevents a WILL CONTEST.... Through a LIVING TRUST your wishes will be carried out with~ut interference. Exh. 2, p. 17. (f) Membership entitles you to:

1. FREE LEGAL SERVICES FOR PREPARATION OF A REVOCABLE LIVING TRUST BY A QUALIFIED ATTORNEY IN YOUR STATE AND A FREE "POUR-OVER" WILL. Exh. 2, p. 8.

(g) AN A-B LIVING TRUST protects against catastrophic MEDICAL COSTS . ... With an A-B LIVING TRUST, if you become seriously ill, your trustee can make gifts of your property to your heirs, and three years thereafter, can seek government benefits for your care, so that the bulk of your estate will go to your heirs. Exh. 2, p. 19.

(h) Is There Anything Bad About a Living Trust? No. There is nothing bad about a Living Trust. Exh. 2, p. 20.

PAR. 5. Through the use ofthe statements contained in the sales literature referred to i~ paragraph four, including, but not necessarily limited to, the sales literature attached as Exhibits 1 and 2, respondents have represented, directly or by implication, that: THE ADMINISTRATNE COMPANY, ET AL. 1049 1047 Complaint (a) The use of a living trust avoids all probate and administrative costs.

(b) At death, a living trust allows assets to be distributed immediately or almost immediately.

(c) A living trust cannot be challenged.

(d) Living trusts are prepared by local attorneys. (e) A living trust protects against catastrophic medical costs. (f) A living trust is the appropriate estate planning device for every consumer.

(g) There are no disadvantages to a living trust. PAR. 6. In truth and in fact:

(a) A living trust does not always avoid probate and administrative costs.

(b) The use of a living trust does not necessarily result in immediate distribution of assets since creditors may file claims against the trust instrument.

(c) A living trust is not immune from challenge. (d) Most living trusts prepared for AASC members were not prepared by local attorneys. Instead, of the 3,064 living trusts prepared for AASC members in 43 states, approximately 3,000 were prepared by an Arizona attorney licensed to practice law solely in Arizona and New York.

(e) A living trust does not protect against catastrophic medical costs.

(f) A living trust is not appropriate for everyone. The determination of whether a living trust is appropriate for a particular consumer requires an examination of the assets that compose the consumer's estate, the potential tax consequences of the estate plan, and the objectives of the consumer.

(g) There are disadvantages to a living trust. For example, while probate law imposes a statutory deadline beyond which creditors can no longer file claims against a will, in some states, there is no law limiting the time that creditors may file claims against a trust instrument.

Therefore, the representations set forth in paragraph five were, and are, false and misleading.

PAR. 7. Through the use of the statements contained in the sales literature referred to ill paragraph four, including, but not necessarily Complaint 123 F.T.C. limited to, the sales literature attached as Exhibits 1 and 2, respondents have represented, directly or by implication, that at the time they made the representations set forth in paragraph five, respondents possessed and relied upon a reasonable basis that substantiated such representations.

PAR. 8. In truth and in fact, at the time they made the representations set forth in paragraph five, respondents did not possess and rely upon a reasonable basis that substantiated such representations. Therefore, the representation set forth in paragraph seven was, and is, false and misleading.

PAR. 9. In their advertising, promoting, offering for sale, and sale of living trusts, respondents have failed to disclose that the transfer of an individual's assets into the living trust was not included in the price paid for creating the living trust and that it would be the responsibility of the individual purchaser to transfer assets into the trust, once created, or to arrange for another individual or entity to do so. This fact would be material to consumers in deciding whether to, purchase a living trust and from whom to purchase a living trust. The failure to disclose this fact was, and is, a deceptive act or practice. PAR. 10. The acts and practices of respondents as alleged in this complaint constitute unfair or deceptive acts or practices in or affecting commerce in violation of Section 5(a) of the Federal Trade Commission Act.

Tile ADMINISTRATIVE COMPANY, ET AL. 1051 1047 Complaint EXHffiiT I / ~ , , A.A.S.C.

• i,; · ~shi~t1155 15th Street0~~ N.W.~77:Suite1637610 URGENT MESE;AGE ENCLOSED TO OPEN ~ IMMEDIATELY! I I .J. CAR-RT-SCRT** c~-02 AYTA 081 4812 S264 1549 541 V':~ITURA AVE SAN ~~TEO CA 94403-3223 SPECIAL BULLETIN:

It is your legal right as a UNITED STATES Tax Payer to establish a Uving Trust. By establishing a Uving Trust. at your death your estate avoids PROBATING YOUR WILL which can COST SEVERAL THOUSANDS of dollars in legal and executor fees and TAKE SEVERAL YEARS before being transferred to your family and loved ones. YOU RETAIN FULL CONTROL OF All ASSETS! YOU COULD SAVE THOUSANDS OF HARD EARNED DOLLARS! INFORMATION IS AVAILABLE ON HOW TO OBTAIN A FREE LIVING TRUST Just fill out and return this postage paid card. Name:._ _ _ _______ Ages: =Mafe __ : Female __ _ ·::: . C>unry: _________ • ••.~t!* c A A•·Rr~s O'R.T• • · ·cR-02 A·3!A , 081 4812 5264 ·15.49.

Home Phone: (__J ------ 54,1 1fE~TURA AVE ·.... , .• " Sec-""IY SA~ Mateo CA 94403-3223 ------""'.llloc,.af No._______ -- -·- J )52 FEDERAL TRADE COMMISSION DECISIONS 123 F.T.C. Complaint EXHIBIT-2 NATIONWIDE NON-PROFIT ORGANIZATION 1155 15th Street, N.W Suite 810 Washington, D.C. 20005 1-800-880-1310 THE ADMINISTRATIVE COMPANY, ET AL. 1053 1047 Complaint EXHIBIT2 Dear Member:

We welcome you to the wonderful world of meaningful benefits and services provided as part of your membership in THE AMERICAN ASSOCIATION FOR SENIOR CITIZENS. . As the senior officer of this non-profit Association, and one who is on the sunny side of sixty, I assure you I value my membership and enjoy the many benefits available to all of our members.

This Association was founded several years ago and entrusted with the responsibility of getting the message to people our <;~ge so that we can receive every benefit and advantage to make sure the dollars we have spent a lifetime earning and saving will pass on to our heirs as intact as Uncle Sam wnr allow, . With this responsibility as our driving fon::e, our Association explored every conceivable avenue available before making the decision to .educate our membership on the value and importance of REVOCABLE LIVING TRUSTS. It is also important for you to know and understand what this Association is committed to in regard to a PRE-PAID LEGAL benefit that actually pays the legal fees for your REVOCABLE LIVING TRUST, and provides many other legal benefits. look at the following pages to understand our commitment to you in this respect. In addition, we have sought meaningful and worthwhile consumer benefits and services for our membership. We are sure you can recognize the value of these benefits for you and your family. We are happy you have joined our "YOUNG AT HEART' adult Association. A living trust is the most important gift you can give to your loved ones.

Also, a portion of American Association of Senior Citizens membership dues are used to support the research efforts of medical research facilities, and others, as they seek better treatment and cures relating to our senior citizens. AASC Medical Research Foundation's charter. as ex.plained in the follolllfing section, is to continually stay abreast of current research efforts throughout the United States to determine who should receive financial support from the Foundation. Please know we are here to make things a little better for you and all of our growing family of members. As soon as we receive your application I will see that your membership kit is forwarded to you.

Warmest personal regards.

Jl.,,.u..;f-£~ Donata T. Berlinn E.xecut1ve Director Complaint 123 F.T.C. EXHIBIT2 _..;..,·_ ·....

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MEDICAL RESEARCH FOUNDATION THE ADMINISTRATIVE COMPANY, ET AL. 1055 Complaint EXHIBIT2 As Directors on the Board of AASC Medical Research Foundation, we are charged with guiding the Foundation to fulfill its charter of supporting worthy medical research that relates to better health care for our senior citizens. In many cases, this money has a direct impact on community awareness, education anp health care delivery. About our President . . .

Dono11an F. Ward, M.D.

AASC Medical Research Foundation President. Past President of the American Medical Association.

A Fellow of the American College of Surgeons. President of the Fifty Year Club of American Medicine. Member of the AMA's committees on Medical Practice and Public Relations.

Past President and National Director, American Health Care Advisory Foundation.

Complaint 123 F.T.C. EXHIDIT2 Our other Directors are . . . Robert P. Ewing, is past Howard E. C..rtwright, Chairman and President of of Chicago is ~t CEO ol Bankers ufe and Casualty CoRege of American Company and is a 'hlsree of Pathologists. past Director of the MacArthur Foundation. a College ol American Director of Evanston Illinois Pathologists Foondacion and a Hospital and a former Director member of American of the Health Insurance Association r:l Medical Society Association ot America. Executives. · Denis J. Fu, M.D., a Joseph W Lawrence, M.D., Samuel A. Sherman, M.D., practicing physician in Hawao, has a long and distinguished has a long ist r:l has served as a medical career in P\Jb'c Health and is accompistvnents including: consultant lor various state currently the Health Officer for past President af the Calil'omia and national development lee County. Aorida. a position Medical Association. programs. he has held since 1960. All of our listed Directors .are also members of the Advisory Board of American Alexander L Sadowski, Donald T. Berlinn, has Association of Voce President has accumulated over been D.D.S., of ITT Senior Citizens and Ufe Insurance Company 1000 hou.-s of continuing education. served on the New Agency and President of advise the Mexico State Dental Medical Ail' Services Association's Finance Associatiol\ the nation's first Association on Committee and is both past nationwide air ambulance pr esident and secretary of the service. Cun-ently Presicent developing new Southwest District Dental of Affordable Dental Soc:ety. Connection and Assoc:at:on benefits or improving Management Group anc existing benefits for . Fresident of American Association tor Senior our senior cicizens. C ; tiZ~nS . THE ADMINISTRATIVE COMPANY, ET AL. 1057 1047 Complaint EXHIBIT2 Financial support is provided by the AASC Medical Research Foundation to the following and other research facilities: • American Medical Association • American Heart Association • American Public Health Foundation • Alzheimers Disease and Related Disorders Association • California Medical Education and Research Foundation • Leukemia Research F;,oundation • Mt Sinai Foundation • National Multiple Sclerosis Society • National Kidney Foundation • Regional Cancer Treatment Center - Iowa • University of Iowa Dept. of Immunology • University of San Francisco Cardiovascular Research In addition, the Foundation has given grants to the following, and others: ON LOK Senior Health Services Cancer Research Foundation Iowa Methodist Health Foundation of North Texas March of Dimes - Walk America Allegheny-Singer Research Institute University of Iowa College of !y1edicine University of Florida - Oncology ·San Antonio Area Lupus Fpundation St. Jude's Children's Hospital Tulane University Medical Center, Sloan-Kettering Cancer Center Dept. of Pediatric-Cardiology North California Transplant Bank Cancer Counseling, Inc. ALS & Neuromuscular Research Tarrant County Cancer Care Services Foundation Cystic Fibrosis Foundation Children's Hospital Medical Center Univ. of Connecticut Health Center Florida Geriatric Research Jean Marie Colbert Bone Marrow Foundation Transplant Center Regional Cancer Foundation Children's Heart Foundation Children's Memorial Foundation Fred Hutchinson Cancer Research Cancer Care Services Center The AASC Medical Research Foundation was formerly known as the American Health Care l;dvisory As sociation Foundac.'on. providing financial support co the above and other re searc.~ lac~ities. • 1SS 1. Arnenc.Jn Assoc:at:1Jn 'or Senior Ctt.:..z~ns 105 8 FEDERAL TRADE COMMISSION DECISIONS Complaint 123 F.T.C. EXHIDIT2 ( AASC Provides for its Members ( the Benefits of I Pre-Paid Legal Services, Inc.® I r' A few ol the most common personal worries and business activities ne~ an attorney's professional counsel and assistance indud:e:

Tl'ruc;ala~ .....0.0. Caloaian c.ntnctar o;,..c. _ E.ct.om Crmnol""'" Tlw'ua I 'L' An American Stock I Exchange Company 1 Paid Over 80,000 Attorneys· l ,• Paid Over $80,000,000 in Legal Fees Over 5,000,000 Members Have Access to Services Nationwide l.

r THE ADMINISTRATIVE COMPANY, ET AL. 1059 1047 Complaint EXHIBIT2 embership entitles you to: Iff] FREE LEGAL SERVICES FOR PREPARATION OF A REVOCABLE LIVING TRUST BY A QUALIFIED ATTORNEY IN YOUR STATE 1 AND A FREE "POUR-OVER" WILL (see following section) LEGAL SERVICES AT DEATH 2 IN-OFFICE ATTORNEY CONSULTATION 3 UNLIMITED TELEPHONE CONSULTATIONS WITH A PROVIDER ATTORNEY 4 MOTOR VEHICLE LEGAL SERVICE s TRIAL DEFENSE FUND 6 IRS AUDIT PROTECTION 7 LEGAL ASSISTANCE IN MANY CASES 8 s C 1991_ ~ml!ncen As.soc:at.cn lor 5enK)f" C.t::~I"S Complaint 123 F.T.C. EXHIBIT2 nlimited Telephone Consultations: [!} • As a member of AASC, you may call the Pre-Paid Legal Toll-Free Number, 1-800- 654-7757. from 8:30 a.m.-5:00 p.m. any business day. Pre-Paid Legal will direct you to your provider attorney for legal advice. • You do not need to guess about your legal rights or spend hundreds of dollars for consultations with an attorney. In the privacy of your own home, you simply call the attorney and he will answer questions concerning ANY personal or legal matters. The following are just a few examples of the types of questions you may need answered:

1. "I am 67 years old and collecting social security. Is it legal for me to claim a deduction for a dependent who earns an income?"

2. "My company is tr"ying to force me into retirement by offering me an early retirement buyout. What are my rights?"

3. "It has been 12 weeks since I was in the hospital and my insurance company has still not paid the $1,500 hospital bill. How long do they have to settle the claim?" 4 . "My neighbor's teenage son. despite my requests to stop, continues ·to play loud music that keeps me awake at night. Is there anything I can do?" 5. "I had a contractor fix my roof, it still leaks and the contractor will not return my call. What can I do?"

6. "My husband is in a nursing home. I do not feel he is getting the proper care. Aren't there certain standards set by the state that nursing homes must follow? What are my husband's options?"

7. "I inherited some land in another state and I would like to lease it out. How do I do this?"

In addition to advising you of your rights, the attorney, if necessary, will personally call or send a letter to help resolve your problem. I.

THE ADMINISTRATIVE COMPANY, ET AL. 1061 1047 Complaint EXHIBIT2 P to SO Hours Legal Assistance [!] at Death: Everyone needs a lawyer upon the death of a family member for settlement of the estate and consultation with the surviving spouse or children: • To finalize tn.Jst documents • To resolve liens contesting the trust, including the IRS • For out-of-state property settlements and property sales~ • For deed transfers • To resolve claims of creditors. including hospitals, funeral homes, etc. • Fo~r protection against any person who attempts to challenge the estate The settlement of an estate is a complicated and lengthy process. Qualified attorneys usually charge between $175-$300 per hour for their services. This translates into a cost of approximately $8,750 - $15.000 for 50 hours of legal assistance to settle an estate. As a member of AASC, your membership entitles you to up to SO hours of legal assistance, depending on your member classification. A True Story:

A Senior Citizen of Dixon, Illinois joined AASC in June of 1991. In July. 1991, he passed away. His children, rather than beginning the long and costly process of finding an attomey to probate his estate, simply called the AASC members' toll-free number. A Pre-Paid Legal attomey immediately began to settle the estate. "My father only became a member six weeks ago but we feel so fortunate that he did We immediately called a provider attorney and were so relieved to leam that we would have the legal work on my father's estate done immediately thanks to Pre-Paid Legal The service is invaluable," said the daughter. Complaint 123 F.T.C. EXHIBIT2 On-Office Consultation:

ONE PER YEAR AASC provides its members with .a Living Trust. Each year it should be reviewed and updated with changes concerning: • Any Legal _Matter • Investments · -• Deeds • -Property and Real Estate • Cars, Trucks and Equipment • -Bank-Accounts • c;.o._·s THE ADMINISTRATIVE COMPANY, ET AL. 1063 1047 Complaint EXIDBIT2 motor Vehicle Legal Service fljJ Expense Benefits: Nearly every American drives some fonn of motor vehicle every day. You are at risk. every time you get behind the wheel of your·car. AASC is proud to offer you a wide variety of coverage in the area of motor vehicles. Flead below to discover the valuable benefits you will have after enrollment. • MINOR LEGAL EXPENSES: If a licensed member, spouse, or any covered dependent. while Qriving any licensed motor vehicle, is accused of an alleged traffic violation, the Company pays your attorney fees. pursuant to the following schedule: Up to $75 for legal assistance regarding such charge: up to $125 for legal assistance requiring court appearance: up to $200 for legal assistance which includes trial work. • MA.JOR LEGAL EXPENSES: If a licensed member, spouse or any covered dependent, while driving any licensed motor vehicle, is accused of a criminal charge such as manslaughter, involuntary manslaughter, negligent homicide or vehicular homicide, the Company will pay your attorney fees based on a maximum hourly rate of $100. • SUSPENDED DRIVER'S LICENSE; The Company provides for professional assistance. and if necessary, maintenance of your driver's license. The Company will pay a reasonable attorney fee for the suspended driver's license services up to $250 per occurrence to your attorney.

• LEGAL COLLECTION SERVICE: Should your licensed auto, private boat or motorcycle be damaged in an accident, the Company will assist you in collecting damages done to your vehicle. The Company provides legal assistance. win, lose, or draw. in collecting damages when your auto, private boat or motorcycle is involved in an accident. and will pay up to $250 per occurrence to your attomey. • PERSONAL INJURY LEGAL EXPENSES: The Company will pay your attorney fees, win, lose, or draw, up to $250 per occurrence to collect or file for personal injuries of $1000 or less received while driving, riding, or when struck as a pedestrian by any motor vehicle.

Complaint 123 F.T.C. EXHIBIT2 5,000 Trial Defense Fund: fJ All too often you read in the paper about someone being sued over what you would consider a trivial matter ... It couldn't happen to you. But everday, people just like you are sued by neighbors, friends, co-workers, even family. In this sue happy society, it is.great to know that your AASC membership offers benefits to cover just that. The Company will pay up to a maximum of $5,000 in attomey fees the first membership year for either the member or member's spouse, if he or she is named Defendant or Respondent in a covered civil or criminal action in a court of law. The criminal action must be one which arises out of the direct performance of the Covered Person's employment activities. The trial defense fund benefit will even pay for the attorney even though your insurance company may have retained one for you, if the choice of attorney is not yours and you feel you need your own personal attorney.

BEN~FITS TO BE PAID AS FOLLOWS:

Benefits are based on a maximum hourly rate of $100 and are to be paid as follows: Up to 5250 for any and all legal services rendered in defense of the covered lawsuit prior to the actual trial.

Up to $300 per day for each actual day of trial, including covered criminal preliminary hearings not to exceed an annual aggregate trial defense fund of $5,000 per membership. Upon renewal of the membership the Covered Person will receive additional trial defense benefits at no additional cost to the member. The trial defense fund increases. as follows: 2nd The trial defense fund will be increased to an annual aggregate sum of $10,000 ~•r Ae per membership payable up to $300 for any and all legal services rendered prior 1 newa to trial and up to $350 per day for each actual day of trial, including criminal preliminary hearings.

3rd The trial defense fund will be increased to an annual aggregate sum of $15.000 ~ A per membership payable up to $350 for any and all legal services rendered prior 1 r enewa to trial and up to $400 per day for each actual day of trial. including criminal preliminary hearings.

4th The trial defense fund will be increased to an annual aggregate sum of $20.000 y. Ae per membership payable up to $400 for any and all legal services rendered prior 1 ear newa to trial and up to $450 per day for each actual day of trial, including criminal preliminary hearings.

5th The trial defense fund will be increased to an annual aggregate sum of $25.000 Year Renewal per membership payable up to $450 for any and all legal services rendered prior to tnal and up to $500 per day for each actual day of tnal, tncludtng crtmtnal pre!imtnary heartngs. · THE ADMINISTRATIVE COMPANY, ET AL. 1065 l047 Complaint EXHIBIT2 '• RS Audit Protection Service: 0 I.R.S. • • . The idea of an audit strikes fear in even the most careful tax payer. Why not enjoy the peace of mind that the AASC membership offers through the IRS Audit Protection Service? Here are the details.

The Company will pay up to a maximum of $5,000 in professional fees for either the member, spouse, or dependent children, to the members choice of any licensed publjc_ accountant. certified public accountant, enrolled agent or attomey or any combination thereof when a member is notified in writing by the Internal Revenue Service OASI. of an audit of such members tax return or such member is requested in writing to appear at the offices of the IRS conceming such member's tax return. BENEFITS TO SE PAID AS FOLLOWS: . i: Up to 5100 for consultation, advice and/or assistance; upon receipt of written notice from the IRS that the member's tax retum is being audited or such member is requested in writing to appear at the offices of the IRS concerning such member's 'tax' return. In the event settlement is not achieved with the IRS within thirty (30J days, then up to 5250 beginning 011 the thirty-first C311 day to provide the -member, spouse. or dependent children representation at the audit and at the audit and for negotiations, conferences, telephone conversations, settlement conferences, subsequent thereto,· but.prior to the institution of litigation. In the event settlement is not achieved without litigation, then payment will be made up to the balance of $5,000 in professional fees in either event of the IRS suing the member or the member paying the disputed tax and then suing the IRS. Such payment to be made at up to a rate of 5300 per day of each day of trial appearance. Coverage begins with the return due an April 15 of the year this contract is effective.

~4 Complaint 123 F.T.C. EXHIBIT2 {]ega] Assistance in Many Cases:

AASC membership provides legal assistance in many cases including the following . .. .

PHONE CALLS AND LETTERS ON YOUR BEHALF A letter or phone call from your Plan Attomey can get you the results you want fast and cut through the red tape. 'lbu and your Plan Attorney can now decide together when this is the best legal step for you. There is no· charge -for the first letter. «Any further fees are to be set by the Plan Attorney and are the sole responsibility of the Named Member on the Contract.J REVIEW OF CONTRACTS AND DOCUMENTS You can have an unlimited number of legal documents of up to three pages each reviewed by your Plan Attorney. free of charge. Your Plan Attorney will give you an analysis of the documents and suggest changes for your benefit or any other necessary procedures, before you sign! LEGAL FORMS BENEFIT Imagine having access to the most often needed legal documents - just a phone call away! The documents you need will be prepared for you at a greatly reduced rate, but don't worry, still with the same care and concern for your welfare. A list of legal forms available, along with the nominal charges, will be in your contract packet. Complete information about the forms you need can be obtained with just a phone call to your Plan Attorney. THE ADMINISTRATIVE COMPANY, ET AL. . 1067 1047 Complaint EXHIBIT2 \ ' / \ .r: I . . I ·' \ / ;

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ALL ABOUT A LIVING :e TRUST Complaint 123 F.T.C. EXHIBIT2 dvantages of a Living Trust !iJ PROBATE:

A LIVING TRUST avoids a complex PROBATE proceeding. Probate is the court pro- 1cess designed to transfer tide of assets to your heirs. A Probate is required even when there is a WILL The Probate Court procedure is complicated by laws requiring your Executor to obtain special court approval to take any actions, including paying your bills, and distributing your assets.

With a LIVING TRUST. the title to property is transferred through the trust, so that your heirs can easily,receive these assets, and will not have to go through complex Probate Court proceedings.

DISTRIBUTION:

A LIVING TRUST allows a quick DISTRIBUTION to your heirs. Assets in probate 2court are often frozen two years or more, even with a WILL · A LIVING TRUST allows these same assets to be distributed within days to your loved ones, since a LIVING TRUST avoids Probate Court. PRIVACY:

A LIVING TRUST is completely PRIVATE There is no privacy with a public Probate 3 Court Proceeding. A LIVING TRUST is a private document. the size and distribution of your estate remains confidential.

WILL CONTEST:

A LIVING TRUST prevents a WILL CONTEST. In Probate Court, anyone can easily 4 contest a WILL even without a lawyer. Through a LIVING TRUST your wishes will be carried out without interference. CONTROL:

A LIVING TRUST enables you to CONTROL your assets. By making a gift of all of 5 your property to your heirs. you may eliminate probate. However. once the gift is made you have lost ownership of your property, which you may later need for your support. · A LIVING TRUST allows you to retain control of your proper ty, and upon your demise. YOU CONTROL WHEN AND HOW MUCH YOUR BENEFICIARY WILL RECEIVE ,;

THE ADMINISTRATIVE COMPANY, ET AL. 1069 1047 Complaint EXHIBIT2 DISABLED HEIRS:

A LIVING TRUST preserves benefits for DISABLED HEIRS. A disabled their generally 6loses government assistance payments upon receiving an inheritance. A LIVING TRUST can authorize your successor trustee to make special distributions for a disabled their while still preserving govemment benefits. PROBATE FEES:

A LIVING TRUST eliminates ALL PROBATE FEES and COST. Probate fees are based 7on the entire value of an estate, without deducting bills or mortgage. The probate expense can be as much as the following, or more: --' GROSS ESTATE SIZE APPROXIMATE EXPENSES $100,000. $10,000. $300,000. $30,000. $500,000. $50,000. This example also appfies to all other mortgaged property owned in every state. If a couple owns property in four states there would be four probates required, With a UVING TRUST. your family will not have to go through probate. and can avoid paying expensive probate fees and costs.

JOINT TENANCY:

A LIVING TRUST avoids JOINT TENANCY problems. Joint tenancy is a method 8of avoiding probate, where, upon death of one co-owner, the survivor becomes the full owner of the property.

1. As an owner, your child has the power to interfere with your decision to sell or refinance the property.

2. If your child should go through divorce, the other spouse may claim an interest in the property.

3. If your child should owe taxes, the tax collector may take your property to satisfy the tax obligation.

4. If your child should be found liable in any lawsuit. your property may be sold to pay the judgment.

With a LIVING TRUST, probate is entirely avoided and there is ,not exposure of your assets to the debts or liabilities of your child. CONSERVATOR:

A LIVING TRUST avoids a CONSERVATOR. If you ever become incapacitated, the9 Probate Court will appoint a conservator to manage your property, and your estate will be required to pay court fees and costs for the conservatorship each year. With a LIVING TRUST, your trustee can manage your property if ·you are unabie to handle your affairs, and there are no court fees and costs. :a 01591. Amencan A.ssoc~t.1)1"11cr ~ef"'f'" Cwens Complaint 123 F.T.C. EXHIBIT2 INCOME TAXES:

A" LIVING TRUST saves sizeable INCOME TAXES. When a ·couple holds property 10 or stocks in joint tenancy, the surviving spouse is required to pay a capital gains tax upon sale. This tax is based upon one-half of the increase in value of the property since the time of its purchase. '. In a LIVING TRUST. title is transferred into the trust. This entirely eliminates the Federal Capital Gains Tax on all increases in value up to the date of death. ESTATE TAXES:

An A-B LIVING TRUST saves substantial ESTATE TAXES. Estate taxes are paid 11 to the federal governme~t for the transfer of property upon death. Federal estate .taxes are based on the size of the estate and are imposed where the net value of an estate is larger than $600,000.00. The Federal Estate Taxes are almost onehalf of the estate after deducting $600.000.00. A Living Trust saves substantial estate taxes as follows: NET ESTATE APPROXIMATE TAX SAVINGS $ 800,000. $ 75,000: $1,000.opo. $153,000. $1,200,000. $235,000. MEOICAl COSTS:

AN A-B LIVING TRUST prot~cts against catastrophic MEDICAL COSTS. If you 12· ·should: ever require care Jn a convalescent hospital or long term nursing home, the medical expense could eventually wipe out· your estate, thereby denying you the opportunity to leave your property to your loved ones. With an A-8 LIVING TRUST. if you become seriously ill, your trustee .can make gifts of your property to your heirs. and three years thereafter. can seek govemment benefits for your care, so that the bulk of your estate will go to your heirs. :~ THE ADMINISTRATIVE COMPANY, ET AL. 1071 l047 Complaint EXHIBIT2 questions Most Commonly Asked [i} 0: Is There Anything Bad About a Living Trust? A : No. There is nothing bad about a Uving Trust. It is a traditional and well-proven estate planning tool that has been used. in one form or another, for hundreds of years.

Any problems people have with a properly prepared Uving Trust have nothing to do with the trust itself, but with the property left out of it because they failed to change titles and beneficiary designations to the name of their trust. The trust stir works - but any property left out risks being probated. If you desire to completely avoid probate. all assets must be in your Uving Trust. It does not take much time to change the titles and beneficiary designations, and once it is done your Uving Trust is easy to maintain.

0: Where Should I Keep My Living Trust Documents? A: We suggest that you make several copies of your original documents and give a copy to each of your back-up trustees. Make sure you tell them where the original documents are located. We suggest you keep the original trust document in your safe deposit box or another safe place ant! keep one copy at home so you can review it from time to time. !Make sure your safety deposit box is titled in the name of your trust. so your back~p trus~ee will have no trouble gaining accessJ 0 : Can I Put Out-Of-State Property Into The Trust? A: 'res. you can, and in fact. you should. Jf you do not transfer out-of-state property into your trust. your heirs will need to have a separate probate in each state in which you own real estate. This may result in probate fees for each state. If, however, the property is transfen-ed into your trust. the probate systems of all of the states involved are avoided.

0: What If I Move To Another State? A: Call Pre-Paid Legal at 1-800-654-7757 to locate a Pre-Paid attomey nearest you. Ask for a review. Most states follow the same general rules, so if something needs changing, only those parts are changed that need to be undt!r the laws of that state. You do not need a completely new document. Q : What If I Buy Property In Another State? A: Before you buy property in another state. especially real estate, check to make sure it can be titled in the same way as in your home state. A bank or title insurance company in the state where the property is located can tell you if the title you want to use is acceptable in that state. · Complaint 123 F.T.C. EXHIBIT2 0: Does Transferring Property Into a Trust Cause a Reappraisal Of The Property So That Property Taxes Are Raised? A: No, it does not. Revenue and Taxation Code 62 specifically states that a transfer into a Revocable Uving Trust does not cause a reappraisal of the property. 0: How Should Property And Accounts Be Titled? A: As a general rule, all of your property should be titled in the name of your trust. Here are some examples:

If you are single:

"(your namely, Trustee under trust dated !insert date you signed your trust]." If you are married:

M(your name and your spouses name], Trustees under trust dated (insert date you signed your trustl."

Very often you will see the letters "UTO" used as a shortened version of the words Wunder trust dated."

0: If I Own Partial Interest 'In Property With Others, Can I Transfer That Interest Into A Trust? A: 'rts. You can transfer your share of any property into the trust without affecting the shares of the others.

0: If I Want To Sell Assets Or Add New Assets To The Trust, Will I Need To Return To The Attorney's Office Each Time? A: No. you will not. 'rtlu can sell assets and add new assets yourself without requiring a change of the trust.

Q: Can I Sell Assets I Have In The Trust Without Any Complications? A: 'rts, you can. 'rtlu can freely sell your property even if it is in the name of the trust. The only difference will be that escrow company officials may ask for a copy of the trust documents. · 0: Can IRAs, KEOGHS And Other Tax Deferred Investments Be Transferred Into The Trust? A: IRAs, KEOGHS and other tax deferred investments cannot be transferred into the trust. However. the trust can be the beneficiary of those investments. Each case must be discussed with an attorney to determine whether it is better to name the trust as beneficiary. or the individuals themselves as beneficiaries. THE ADMINISTRATIVE COMPANY, ET AL. 1073 1047 Complaint EXHIBIT2 Q: What About Adding Other Persons On My Accounts, Deeds, Etc.? A: Never add another person on the title of your property or your accounts !this includes parents and children} without first checking with your attomey. It could cause you or your family some very serious problems, possibly even defeating the purposes of your trust or exposing you to a lawsuit. Q: When Willi Need To Update My Living Trust? A: There is no special time to change your trust, although it is a good idea to review your living trust at least every year. As a general rule, you should change your trust anytime it no longer is what you want. Any major change in your tarruly, such as marriage, divorce, death, adoption. birth, etc. should cause you to think about your trust. If one of your trustees/ guardians can no longer fulfill their responsibilities you should make changes ~accordingly.

Remember that you should keep a separate list of your Special Gifts. Q: How Do I Fund My Trust? A: YOU CAN FUND YOUR TRUST BY THE FOLLOWING THREE STEPS: 1. Go to your bank and change the name on savings, money market and certificate of deposit accounts to the name of the family trust. Also, place trust in safety deposit box.

2. If you own stocks or bonds, contact your stock broker to change the name to the name of the family trust.

3. Finally, if you have real estate, you may use the Quick-Claim Deed to transfer it yourself or you may contact a title company to transfer the title to the name of the family trust.

IF YOU HAVE ANY QUESTIONS CONCERNING THE FUNDING OF YOUR TRUST. CALL PRE-PAID LEGAL AT 1-800-654-7757.

Complaint 123 F.T.C. EXHIBIT2 isadvantages of Going [f) Through Probate 1. Impounded or frozen a_accounts 2. Impounded safety deposit box 3. Probate court cost (1QDJo or morel 4. Waiting period (1-3 years) S. Attorney fees (very costly) 6. Administration fees 7. Public disclosures 8. Impounded mail 9. Forced asset liquidations 10. Expensive litigation 11. Possible Federal Estate Taxes and I or State Inheritance Taxes THE ADMINISTRATIVE COMPANY, ET AL. 1075 1047 Complaint EXHIBIT2 eath Probate versus [j] Revocable Living Trust Total Assets • Home • Auto • Cash • Land • C.D.s • Real Estate • Savings • ufe Insurance • Checking • Pension Anything of Value Probate Process Living Trust I • 'rt:Ju\maintain control while you are • Attomey Fees alive • Administrator Fees • You name someone you trust to -handle Assets after. death • Possible Contestibility • Avoids Probate • Public Disclosure • No Delay • Impounded Assets · • Privacy • No Impounded Assets / SPOUSE 1-3 1-3 or YEARS DAYS Heirs C199 1. Amenu n ASSOC-ilt.D1 tar 5~ Cozens Complaint 123 F.T.C. EXHillJT2 reventi.ng These Situations {j A LIVING.TRUST WOULD HAVE PREVENTED THIS SITUATION: Martha had been a widow for just one year when she put all of her property, including her house. into joint ownership with her married son. She did this thinking that when she died, hei- property would automatically go to her son without the need for probate. Several years later, her son and his wife. separated and Mar:tha decided to sell her house so she could move in with her son. But she soon discovered she could not sell the house without her daughter-In-law's signature on the deed. The daughter-in-law was ..still legally married to her son and was entitled by law to a "marital interest" in the property. The title company would not insure clear title to the buyer without the daughterin-law's signature because it was not clear what her "interest" would be- and the daughterin-law refused to sign unless she got part of the money when tlie house was sold. Martha was stuck! She _qid not :know that joint ownership with a married person can include that person,..•s spouse. And ·because Martha had placed her house in joint ownership, Martha lost control o~ her. own ·home.

A LIVING TRUST WOULD HAVE PREVENTED THIS SITUATION: Bill and Agnes were an elderly couple who put everything they owned . . . including their home and stock ... in their adult unmarried daughter's name. They believed that this would avoid probate and that all of their property would pass directly to their daughter who was an only child, when they were both gone. A year later, Bill died of a heart attack. Several months after that, the daughter was killed in an auto accident. Agnes never believed she would sur vive both her husband and daughter. To add to her distress, Agnes now owned nothing in her own name. Everything was in her daughter's name! She was forced to probate her daughter's estate to get back her own property. During this long process she had to rely on the court to grant her living expenses. Sometimes the court would approve expenses • •• sometimes not:. And during a declining stock market, she helplessly watched the value of her stocks fall to only a fraction of their previous value because the court could not react in time for them to be sold quickly enough. Agnes lost her financial independence plus a substantial portion of her assets to probate ... just trying to get; back what was hers in the first place. THE CONSEQUENCES IF A JOINT OWNER CANNOT SIGN: Most married couples own their property jointly, and they assul'l)e that if one of them becomes disabled or incompetent. the other can continue to take care of their personal and financial affairs without interruption. But look at what happened to Henry and Mary:

Henry and Mary were successful and responsible adults. They made safe investments and planned carefully for their future. They owned everything jointly and even had WILLS, leaving everything to each other. But in just seconds their lives changed dramatically. Henry was in a tragic car accident, and suffer ed extensive head injuries and THE ADMINISTRATIVE COMPANY, ET AL. •1077 1047 Complaint EXHIBIT2 brain damage. Mary could continue to write checks and pay their day to day bills because only one of their-signatures was required on their checking account. But soon the cash started running out, and Mary realized she needed to sell some of their investments, and maybe their house, to pay for Henry's care and the other bills. Mary was unable to sell any of their jointly owned property without both signatures, and since Henry could not sign his name, the only way Mary co&dd sell their property was to place Henry into a probate guardianship and have the court sign for him. Henry's WILL was no help at all because he was still alive.

Mary had no idea how expensive and cumbersome this legal joint ownership" can be. Not only did she have to deal with Henry's situation and the effect of this tragedy on their personal lives, but she afso had to deaf with the court system. She was especially frustrated that she had to pay for the court to approve the safe of their own property and then get the court's approval on how Henry's share of that money was spent even when it was used to pay their personal bills and take ·care of Henry! When Henry finally died more than five y~ars later, Mary found herself back in probate court - this time to probate Henry's WILL · THE SAME THING CAN EASILY HAPPEN TO YOU If you awn property through joint ownership. Many older parents list their adult sons or daughters as joint owners on their property (especially real estate and C.D.sl, mainly to avoid probate when they die. And many mistakenly assume that their adult child will automatically be able to take over for them if they become· disabled or incompetent. Most people just do not know how easily join~ ownership can lead to a probate guardianship. · <s Complaint 123 F.T.C. EXHIDIT2 OTHER MEMBERSHIP BENEFITS& SERVICES THE ADMINISTRATIVE COMPANY, ET AL. 1079 1047 Complaint EXHIBIT2 medical Air Ambulance Services fi!jJ Specialized Facilities ... often at distant locations, available to our members at NO out-of-pocket cost when the need arises. · Ten Separate Services .. ~ ·Some Lifesaving . .. Some Peac~ of 'Mind:

• EMERGENCY AIR TRANSPORTATION to any specialized hospital in the nati_on with what could be the single life .sustaining· ererni:mt." available to you or a member of your family. ·· ·: • ESCORT TRANSPORTATION for your spouse, family, mem~er or companion to accompany you in flight if space permits. .- ;.;: '-._ • NON-IN.JURY TRANSPORTATION to have ·afamify tnember flown round trip by common carrier to the city where you are hospitalized for more than seven days. · · ;"-' • REPATRIATION, should the patient and his attending physician determine that recuperation nearer home is feasible, air transportation will be provided. • ORGAN RETRIEVAL/ORGAN RECIPIENT TRANSPORTATION. If a member requires a heart, heart/lung, liver, kidney, lung, or pancreas transplant, this service will transport the organ to the recipient or fly the recipient candidate to the organ.

• RETURN TRANSPORTATION either by air ambulance or scheduled air carrier for your return home.

• MINOR CHILDREN RETURN, including an attendant, if necessary, when minor children are stranded as a result of you being hospitalized out of town. • VEHICLE RETURN. Privately owned or rented cars, vans. motorhomes, or travel trailers left unattended as a result of the medical emergency will be returned to your residence.

• PHYSICAL REMAINS RETURN. Will return mortal remains. Complaint 123 F.T.C. EXHIBIT2 Listen to What People Say About Medical Air Services: Louis C. Timm Katherine G. Bennett 716-328-9824 • Rochester, New York 716-637-6468 • Brockport, New York "We could not have asked for better treatment, 'The Bennetts are staunch believers that e-.-:'";One in face we have been telling our tn"ends about should be a member of Medical Air Services. )bu MASA." . showed concem far beyond the service anyone could expect. • · Lee and Violet Frost Margaret Kreutzer 618-832-6538 • Anna. Illinois 204-326-9972 • Edinburg, lexas "We are satisfied with your service we cake every opportunity to encourage friends to enroll in "I am very pleased with the services I received from MASA.N your company after the death of my husband." Mrs. James rThelmal Wilkinson Frankie Adkins 515-652-3244 • Ottumiba, Iowa· 512-429-2534 • Brunswick. Missouri 'We have only good thoughts and remarks tcJ make "'!11e made a call to Medical Air Services and found of Medical Air Services. • out our daughters flight tc be with her criticalfy iU father would be t:iJken care of. \1\.t! certainly thank your "flight for life" service and don't intend co be Mr. Victory. Kalinoski without it. • 218-681-4767 • Thief River Falls, Minnesota "It was a 400 mile trip one way. We were very Mrs. Joyce E~~ans pleased in Chat no time was wasted and everything 816-638-4561 • Urich, Missouri· seemed very well planned. We recommend this "V1.ords cannot express what I feel for your com- service very highly. " pany. lflu were all so helpful and courteai/S. I would love to enroh same ofmy friends who have not heard Harold and Ruth Wendt . of your services. Please send me some enroDment 715-229-2770 • Owen, Wisconsin applications. • ~ "I am now well on the way tcJ recovery from open heart surgery while in Jexas in ApnZ We express Stanley Snodgrass our special thanks for the line and prompt service 513-922-4562 • Cincinnati, Ohio Medical Air Services provided dunng our emer- MASA win always be a part of our insurance pro- gency. Besides providing air service home, we es- gram as long as it is a~~a~1able to us. On a scale pecially appreciated having a driver t:;Jke our auto- of one tcJ ten, we ra~ you a ten plus. • mobile 1700 miles to IMsconsiil. • Mr. and Mrs. Robert Taylor Christine J. Adamson 612-894-9709 • Bumsllille, Minnesota 3 13-659-6080 • Rushing, Michigan "'!11e wish to thank you for the 71assle free" way "We feel Chis service is very valuable for the security in which you handled all the ait7Jngements to fly it provided and we feel it is one of the best invest- me and my injured husband home after he fractured ments we have ever made." a vertebra in his back. We say thanks for all your help.· Bruce Theel 701-477-5244 • Rolla. North Dakota Helen Redekal "Your company is providing a critical medica/service 507-938-4241 • Canby, Minnesota to the population living in remote areas. without "In this day and age it is very difficult to believe air facilities closer to major medical centers. Could some company would st:ilnd behind their promises you sell hospitals such a service, so that more and react so efficiently and promptly in our crisis. people are ,iJfarmed of this marvelous service you I highly ~~commend this service to each and gtve ac suc.'7 a reasonable rate?" ever-;one THE ADMINISTRATIVE COMPANY, ET AL. 1081 1047 Complaint EXIITBIT2 Prescription Program tid The lowest price available at your local pharmacy! • Over 30,000 participating neighborhood pharmacies • Fill all your prescription needs AT or BELOW average wholesale prices ail Order Pharmacy fi!iJ The preferred option for maintenance medications! • TOLL FREE ORDER - Comparison cost line • NO shipping or handling charges • Doctor-Verified prescriptions • Easy to use • Convenient at-home delivery Savings that really add up! Complaint 123 F.T.C. EXHIBIT2 !fordable Dental Connection !iJ Free & Discounted Dental Service • FREE Diagnosis • FREE Dental History • FREE Bite Wing X-Rays • FREE Flouride Treatment for Children • FREE Oral Hygiene Instructions • FREE Oral Cancer Examination Discounts of 20°/o to 50°/o off the Dental Providers "usual and customary~~ fees. • Prosthodontists • General Dentistry • lmplantologists • Orthodontists • Oral Surgeons • Endodontists THE ADMINISTRATIVE COMPANY, ET AL. 1083 1047 Complaint EXHIBIT2 [} yewear Savings SPECS brings you savings at Sears,- Montgomery Ward, JC Penney, Dillard's, Marshall Fields, Royal Optical and many other stores.

)bu receive the SPECS Vision Plan free as It's ;;o easy! There's no waiting, no forms to part of your membership benefit package. complete, and no limitations - all merchan- The SPECS Vision Plan is designed to offer dise is included. Most locations are open both you and your family savings of up to evenings and weekends for your convenience. 60Dfo on all your eyecare needs. And, you can pay for your order with your store credit card. Simply present the SPECS card at any of the 1.500 participating Sears, Montgomery Ward, ·Jc Penney, Dillard's, Marshall Fields, Royal Optical and many other eyewear departments located throughout the country and let the savings begin.

TYPICAL SAVINGS YOUR Frames Cost Frames up to $54 retail - you save 60% ............ .. ..... ... . .... $20.00 Frames $55 to $74- you save 60% .......... . .......... .. ....... $30.00 Frames over $74 ............. .. .............. . ...... . ....... ... ... 500/o off Lenses Single Vision - you save 45% ... ....... . ....... . . . ..... . ... . . . . .... $28.00 Bifocal - you save 400fo .......... . . . . . .... .......... ... ........ . ... $50.00 Trifocal - you save 400fo ..... ........................... . .......... $60.00 Lenticular - you save 500fo ... . . . . ....... . ............. . .... . .... . . $95.00 Contact Lenses & Non-Prescription Sunglasses 200fo Discount from regular retail prices Eye Examinations Spectacle: $5 off regular fee Contact: $10 off regular fee • Eye E.amnatJOns are provided by Doctors at Optometry located in or adjac!llt tD most participaong 01>tical depar-tments. The lee lor fitting and dispensing specu~ces !including unlmted adjustments) is only $8. There is flo cfjspens•ng fee for contacts.

· ~991. Amencan 4 ssoc;.atlon fcrSef\IOJ"C.c.a.z~ens 1-084 FEDERAL TRADE COMMISSION DECISIONS Complaint 123 F.T.C. EXHffiiT2 hearing Aid Discounts [J} Save 60°/o or MORE! • All world famous name brands.

• When is a $400 hearing aid better than an $800 hearing aid? When it's the same hearing aid!! 30 day No cost - No obligation FREE home trial Hear better today! hiropractic Discou~ts {g Nationwide network of over 2200 licensed chiropractors.

• Free Chiropractic Evaluation! • Preferred Client 15% discount.

Headaches • Neck Pain • Pain In Lower Back. Hips or Legs Tight Muscles or Spasms • Decreased Aexibt1ity Abdominal Pain • Dizziness or Blurred Vfsion Shoulder or Arm Pain • Numbness in Extremities Breathing Difficulties Get rid of that pain! · THE ADMINISTRATIVE COMPANY, ET AL. 1085 1047 Complaint EXHIBIT2 discount Shopping Service [j} · Members sa.ve .UP to 50°/o on thousands of nationally advertised items.

As a Member you'll enjoy huge savings through substantial discounts on most major consumer purchases. It's easy. Just pick up the phone and you'll receive the guaranteed lowest price available for the item you want. Use your price to comparison shop at your local stores.

• Audio Equipment • Sewing Machines ·• Cameras • Video Recorders • Carpeting • Exercise Equipment • China and Silverware • Televisipns • Diamonds • Typewriters • Fine Jewelry • Video Tapes • Furniture • Binoculars • Personal Computers • Air Conditioners • Luggage • Major Appliances Plus thousands of • Pianos and Organs other items! You'll save hundreds of dollars! Complaint 123 F.T.C. EXHffiiT2 rocery Coupon Program m ~ .: . ·· · Manufacturer's coupons for brand name items you want, need, and use!!! Save hundreds and hundreds of dollars each year on your grocery bills.

. .

Saving Money on groceries has never been easier.

THE ADMINISTRATIVE COMPANY, ET AL. 1087 1047 Complaint EXHIBIT2 ift Catalog · {B Savings Galore! Over 550 Items! Our members SAVE up to 80°/o Cameras • Jewelry • Household Appliances • Silver Plate Luggage • China • Watches • Telephones · Silverware • Tools • Leather Goods • Fur Coats Receive impressive savings on gifts for e~ A~~ .. w~ G~ · c~ SAMPLE SAVINGS Suggested Item Retail Your Price ladies or mens quartz Diamond Watch .. .... . .. ... .. . . . ... . $ 119.00 .....•.. . . . . . . ... . . . . . . S 23.00 35mm Camera - auto focus.

aut o wind. auto loading . ........ ... .. . $ 269.00 ... . ... . ... . .. .. .. .. .. S 69.00 Cordless telephone . .. .... ........... $ 17 9.00 ... . ... ..... . .. ...... . S 59.00 l adies Black Eel-Skin purse . ... . , ... . $ 345.00 ..... .. .. . . .. .. .. ... .. S 69.00 Norwegian blue Fox fur coat . ......... $1250.00 . . ....... ...... ....... 5256.00 •i991. Arnerlc.Jn Assooat:on tor Set\101" Ciwens Complaint 123 F.T.C. EXHIBIT2 a cation & Travel Discounts m· Your membership travel services are waiting for you NOW Let our travel consultants accommodate you! • Prompt, courteous, professional assistance • Lowest currently available air fares • Up to 5°/o off on air fares to many destinations worldwide · • $100,000 Accident lns&,.~rance on s~lected flights • ·, Discounts from many of the world's. most desired resorts.

cruise lines, and tour packages Get that dream vacation! otel, Motel, Resort Condominium DiscountsCJ Guarantees 50°/o Savings • At over 2000 hotels, motels, and resort condominiums.

• Available at thousands of destinations worlwide.

The world can be yours! c 15'91, Amei"'C31'1 Asscctat~onlor ~or Cotlttons THE ADMINISTRATIVE COMPANY, ET AL. 1089 1047 Complaint EXHIBIT2 ew Car Discounts flJ Save $1000 or MORE! For a nominal service charge you'll receive a computer printout showing the dealers cost for the make and model you want.

Information tha.t gives you a price advantage! Knowing what your dealer knows can get you the very best price on the car you want [!}sed Car Discounts Outstanding savings on late-model pre-owned cars.

For a modest fee, you will receive a price quote for the late-model car of your choice that will also include the retail price and trade-in value.

Make your best deal! Every car is prepared for sale under guidelines which meet the highest standards and conditions. c= ~S91 . /&menun Assoc:at:on tor Str-or c ,tllens Complaint 123 F.T.C. EXHIBIT2 ree Kodak Film [} A $350 Value!! • Our members are provided certificates for 10 FREE rolls of KODAK Color Film. • Send in a roll of film for processing - Receive a new roll of film FREE. • MONEY SACK GUARANTEE: You pay only for the prints that come out! iscounts on Flowers {g · Fresh & Beautiful • Over 5,000 participating Florists worldwide. • Open 24 hours a day - 7 days a week ar Rental Discounts {8 ·· SAVE 10°/o to 40°/o every time you rent a car! • Free upgrade in car class at Hertz, Avis. National. • Special exclusive flat-rates at National and Alamo. [} family Entertain=.f.t:c_ounts At such places as: •='"*'""""" .............,. ~~!/IJ(f)I~ And we are negotiating new entertainment discounts every day that will be added to your membership as available! - Something for everyone! ~ 1991. Amencan Assoc:at.C:'\ fer Semor C.t. .: ~ns THE ADMINISTRATIVE COMPANY, ET AL. 1091 1047 Complaint EXHIBIT2 NATIONWIDE NON-PROFIT ORGANIZATION Decision and Order 123 F.T.C. DECISION AND ORDER The Federal Trade Commission having initiated an investigation of certain acts and practices of the respondents named in the caption hereof, and the respondents having been .furnished thereafter with a copy ofa draft of complaint which the Denver Regional Office proposed to present to the Commission for its consideration and which, if issued by the Commission, would charge respondents with violation of the Federal Trade Comiriission Act~ and The respondents, the attorney for the individual respondent, and counsel for the Commission having thereafter executed an agreement containing a consent order, an admission by the respondents of all the jurisdictional facts set forth in the aforesaid draft of complaint, a statement that the signing of said agreement is for settlement purposes only and does-not constitute an admission by respondents that the law has been violated as alleged in such complaint, or that the facts as alleged ip. such complaint, other than jurisdictional facts, are true, and waivers and other provisions as required by the Commission's Rules; and The Commission having thereafter considered the matter and having determined that it had reason to believe that the respondents have violated the said Act, and that a complaint should issue stating its charges in that respect, a~d having thereupon accepted the executed consent agreement and placed such agreement on the public record for a period of sixty (60) days, now in further conformity with the procedure prescribed in Section 2.34 of its Rules, the Commission hereby issues its complaint, makes the following jurisdictional findings and enters the following order:

1. Respondent The Administrative Company is a corporation organized under and by virtue of the laws of the State of Texas, with its current address at 4328 Hollow Oak, in the City of Dallas, State of Texas. The Administrative Company has ceased doing business. Respondent Michael P .. Mcintyre's current address is 4328 Hollow Oak, in the City of Dallas, State of Texas. 2. The Federal Trade Commission has jurisdiction of the subject matter of this proceeding and of the respondents, and the proceeding is in the public interest.

THE ADMINISTRATIVE COMPANY, ET AL. 1093 1047 Decision and Order DEFINITIONS For purposes of this order:

a. ''Living trust" means a trust into which an individual can place all of his or her assets during his or her lifetime and, by transferring ownership of the assets to the name of the trust, thereby remove the assets from the individual's estate. . . b. "Probate" is the legal process that validates a will, which is a legal document that contains instructions to the court on how an individual's assets and liabilities are to be divided and distributed at death.

ORDER I.

It is ordered, That respondents The Administrative Company, a corporation, its successors and assigns, and its officers; Michael P. Mcintyre, individually and as an officer and director of The Administrative Company; and respondents' agents, representatives, and employees, directly or through any corporation, subsidiary, division, or other device, in connection with the advertising, promoting, offering for sale, or sale of living trusts, do forthwith cease and desist from misrepresenting, in any manner, directly or by implication, orally or in writing, that:

A. The use of a living trust avoids all probate and administrative costs.

B. At death, a living trust allows assets to be distributed immediately or almost immediately.

C. A living trust cannot be challenged.

D. Living trusts are prepared by local attorneys. E. A living trust protects against catastrophic medical costs. F. A living trust is the appropriate estate planning device for every consumer.

G. There are no disadvantages to a living trust. Decision and Order 123 F.T.C. II.

It is further order.ed, That respondents The Administrative Company, a corporation, its successors and assigns, and its officers,; Michael P: Mcintyre, indiv~dually and as an officer and director of The· · Administrative Company; and respondents' agents, representatives and employees, directly or through any corporation, subsidiary, division, or other device, in connection with the promoting, offering.for sale, or sale: of living trusts, do forthwith cease and desist from failing to disclose, clearly and conspicuously, in writing, and prior to the consummation ofthe sale, the following information:

A_. Living trusts may be challenged on similar grounds as wills. B,_Living, trusts.may not be appropriate. in all instances~ and all estate planning ·options should be examined before determining which estate plan.best suits a particular individual's needs and wishes. III.

It is further ordered, That respondents The Administrative Company, a corporation, its successors and assigns, and its officers; Michael P. Mcintyre, individually and as an officer and director. of The Administrative Company; and respondents' agents, representatives and employees, directly or through any corporatio11, subsidiary, division, or other device, in co:rinection with the promoting, offering for sale, or sale of living tnlsts, do forthwith cease·and desist from failing to disclose, clearly and conspicuously, in writing, and prior to the consummation of the sale, the following information, if true:

· A. The availability of informal probate under this state's statutes allows minimal or no contact with the courts and reduces the time required to probate a will.

B. The transfer of an individual's assets into the living trust is not included in the price of cre.ating the living trust. C: It is the sole responsibility of the purchaser of the living trusl to transfer assets into the trust.

D. Creditors have a longer period of time to file a claim against a living trust than against a probated estate. THE ADMINISTRATIVE COMPANY, ET AL. 1095 1047 Decision and Order IV.

It is_further ordered, That respondents The Administrative Company, a corporation, its successors and assigns, and its officers; Michael P. Mcintyre, individually and as officer and directm: of an .T~e Administrative Company; and respondents' agents, representatives and employees, directly or through any corporation, ~ubsidiary, division, or other device, in connection with the a~vertising, promoting, offering for sale, or sale of any legal instrument, service or program, do forthwith cease and desist from making, directly or by implication, orally or in writing: A. Any-statement or representation of material fact that is false or misle.ading; and - · B. Any statement or representation about the advantages, risks or consequences of such legal'instrument, service or program unless, at the time of making the statement or representation, they possess and tely.upon-a reasonable basis.

v.

It is further ordf!red, That, for a period of five (5) years from· the date of issuance of this order, respondents, and their successors and assigns, shall maintain and upon request make available to representatives of the Federal Trade Commission for inspection and copying all documents relating to living trusts or the preparation of .living trusts that are developed, written, reviewed, authorized, or used by respondents, their successors and assigns, their officers, and their agents, representatives and employees, directly or through any corporation, subsidiary, division, or other device. VI.

It is further ordered, That, in connection with the advertising, . promo_ting, offering for sale, or sale of living trusts, respondents shall maintain, for a period of five (5) years from the date of issuance of this order, books, records, and accounts which, in reasonable detail, will demonstrate compliance with this order and accurately, fairly, and completely reflect the incomes, disbursements, transactions, and use of monies by respondents and, upon reasonal:>le notice, make such books, records, and accounts available to representatives of the Federal Trade Con1mission for inspection and copying. Decision and Order 123 F.T.C. VII.

It is further ordered~ That the corporate respondent shall notify the Federal Trade Commission, through its Denver Regional Office unless otherwise directed, at least thirty (30) days prior to any proposed change in the corporate respondent, .such as dissolution, assignment, or sale resulting in the emergence of a successor corporation, the creation or dissolution of new corporations, subsidiaries or affiliates of the respondent, the planned filing of a bankruptcy petition, or any other corporate change that may affect compliance obligations arising out of this order. VIII.

It is further ordered, That respondent Mic~ael P. Mcintyre shall, for a period of five ( 5) years from the date of issuance of this order, notify the Federal Trade Commission, through its Denver Regional Office unless otherwise directed, within forty-five (45) days of the discontinuance of his present business or employment, including selfemployment and of his affiliation with a new business or employment, including self-employment. Each notice of affiliation with any new business or employment shall include the respondent's new business address and telephone number, current home address and a statement describing the nature of the business or employment and his duties and responsibilities.

IX.

It is further ordered, That respondents shall: A. Within thirty (30) days of service of this order upon them, provide a copy of this order to each of respondents' current principals, officers, directors and managers and to all personnel, agents and representatives who are or have been participating or engaging in any manner in respondents' living trust sales activities. B. For a period of five (5) years from the date of issuance of this order, provide a copy of this order to each of respondents' principals, officers, directors and managers, and to all personnel, agents and representatives who are participating or engaging in any manner in respondents' living trust sales activities, within three (3) days after the person assumes his or her position.

THE ADMINIS1RA TIVE COMPANY, ET AL. 1097 1047 Decision and Order X.

It is further ordered, That this order will terminate on April 14, 2017, or twenty years from the most recent date that the United States or the Federal Trade Commission files a complaint (with-or without an accompanying consent· decree) in federal court alleging· any violation of the order, whichever comes later; provided; however, that the ·filing of such a complaint will not affect the duration of:. ·· · A. Any paragraph in this order that terminates in less than tw¢nty ~~; I . B. This order's application to any respondent that is not named as a defendant in such complaint; and C. This order if such complaint is filed after the order has terminated pursuant to this paragraph. · Provided further, that if such complaint is dismissed or a 'federal court rules that the respondent did not violate any provision :of the order, and the dismissal or ruling is either not appealed or upheld on appeal, then the order will terminate according to this paragraph as though the complaint was never filed, except that the order will not terminate between the date such complaint is filed and the later of.the deadline for appealing such dismissal or ruling and the date such dismissal or ruling is upheld on appeal.

XI.

It is further ordered, That respondents shall, within sixty ( 60) days of service of this order upon them, and at such other times as the Federal Trade Commission may require, file with the Commission a report, in writing, setting forth in detail the manner and form in which they have complied with this order. · Complaint 123 F.T.C.