What is a Ponzi scheme?

What is a Ponzi scheme?
What is a Ponzi scheme?

In the recent past, you must have heard a lot of news about Ponzi schemes. They guarantee exciting promises but lead people towards frustration and hassle in the long run. Therefore, it is important for all people to have a clear understanding of “What is a Ponzi Scheme”. Then you will get the opportunity to avoid frustration linked with them.

What is a Ponzi scheme?

A Ponzi scheme can simply be defined as investment fraud. It promises amazing returns for all investors. In fact, investors are convinced that they will be provided with amazing returns via the funds that are raised from newly joined investors. Due to this reason, existing investors would be tempted to get new investors into the scheme as well.

For a Ponzi scheme to work, it should have a continuous flow of investors. In such a situation, organizers of the Ponzi scheme will be able to win a higher amount of money within a short period of time. But when the Ponzi scheme fails to recruit new investors, it will collapse.

The first-ever Ponzi scheme was started back in 1920 by a guy named Charles Ponzi. He cheated thousands of people who lived in New England by promising them to deliver 50% of their investments within 90 days. Since then, Ponzi schemes have evolved along with time. Therefore, it is important for people to have a clear understanding of how to avoid them.

What can you do to avoid Ponzi schemes?

  • Always be skeptical

If you are approached by an individual who tries to sell a massive investment, you should be skeptical about it. The investment scheme would look promising. In other words, it would convince you that you will be able to get amazing returns without any risk. This is a common example in a Ponzi scheme. When you are provided with such an investment plan, you should be extra cautious. In most cases, returns would be generated by a thing that you haven’t heard before. Or else, you would think that it is impossible to generate such returns via the method explained. If you don’t have any idea at all, you are encouraged to go ahead and seek the assistance of someone who has experience and knowledge about the subject.

  • Be suspicious when you come across unsolicited offers

During a Ponzi scheme, a person would get in touch with you unexpectedly. For example, you will be asked to come and take part in an investment seminar. You should always look at such instances with a suspicious eye. If you are a senior citizen, you should keep in mind that you are in the high-risk category of being subjected to investment scams. People in your age category are more vulnerable to such scams as well. Therefore, you need to be suspicious when you are provided with an unsolicited offer.

  • See whether the investment opportunity is a registered one or not

Once you are provided with an investment opportunity, you should see whether it is registered or not. Usually, the Ponzi schemes are unregistered. They will not be provided with registration by the controlling authorities due to nature. You can simply ask for additional information about the investment from the individual who promotes them to you. If that person tells you that the investment opportunity is not registered, you need to inquire why it is not. It is true that an investment opportunity doesn’t need to be registered at all times. However, moving forward with a registered investment opportunity would provide you with the opportunity to keep peace of mind. It can also keep you away from fraudulent Ponzi schemes. Therefore, it is a must for you to see whether the investment is registered or not.

  • Analyze the seller

The seller who’s trying to promote the investment opportunity to you should also be analyzed properly. If you get in touch with FINRA, you will be able to get additional information about the seller. Here, you need to see whether the seller has obtained the required licenses. In addition, you should keep an eye on all sorts of negative information about the seller as well. If there are negative remarks or if the seller has not obtained the required licenses, you should never go for the investment opportunity. There is a high chance associated with it to be a Ponzi scheme and it’s better to be safe.

  • Be 100% sure about the investment before you spend money

Most people in today’s world do the mistake of spending their money before they get 100% sure about the investment opportunities. This can be considered as one of the most prominent reasons why people become victims of Ponzi schemes. If you don’t understand any part of the investment opportunity, you should ask for additional information. Plenty of resources are available on the internet for you to get the required information. By going through those details, you will be able to get a better understanding of how to invest your money. Then you can also evaluate the opportunities that are provided to you. This would improve your knowledge about Ponzi schemes as well and you will be able to stay away from them.

  • Report the Ponzi schemes that you come across

Last but not least, you need to be careful to report all the Ponzi schemes that you come across in day-to-day life. By going this, you will get the opportunity to save another person from becoming a victim of it. As soon as you come across a Ponzi scheme, you need to file a case with FINRA. Or else, you can get in touch with the Securities and Exchange Commission to do it. When you report the Ponzi Scheme, you will be ensuring that you save lots of other people from falling into the trap as well.

Final Words

Now you have a clear understanding of the answer to the question “what is a Ponzi scheme”. Any person can become a victim of a Ponzi scheme. Hence, it is extremely important to keep your eyes open and make sure that you don’t become a victim. Now you have a clear understanding of how to avoid the frustration associated with Ponzi schemes. As the next step, you need to keep an eye on the Ponzi schemes around you. If you come across any, you should be careful to stay away from them.

What is probate court?

What is probate court?
What is probate court?

Probate court is one of the specialized types of courts, which is dealing with the debts and property of a person who has passed away. The main objective of a probate court judge is to take a look at the debts that the deceased person has obtained and make sure that all the creditors are paid accordingly. If there are any remaining assets left after the payments to the credits, the beneficiaries will be able to get them. In fact, the assets will be properly distributed among the beneficiaries in such a situation.

What exactly is probate?

Before you understand what is probate court, you need to understand what exactly is meant by probate. Probate refers to the legal procedure, where a court will be able to take a look at the distribution of assets that belonged to a deceased person. You will be able to discover specialized probate courts operating in numerous states.

In some of the states, the probate court is called in different names. For example, you will be able to see names such as chancery court, orphan’s court, and surrogate’s court being used by the different states. Regardless of the name, all of them are catering to one main objective, which is to ensure that the assets are distributed in a fair manner among the beneficiaries, after making all the obligation payments to the creditors.

The probate court would usually appoint a person and he will be able to take complete control over the assets of the deceased person. This is where it is possible to ensure that all the debts are paid in an appropriate manner. Then the same person will be able to divide the remaining assets among beneficiaries as well.

What would happen during probate if there is no will?

If there is a will, the assets can be distributed accordingly to it. But if there is no will, things would become trickier. That’s because the property will be distributed to the next of kin of the deceased person. This will be fully determined by the probate law. In fact, this is one of the most important aspects that you can find in probate law as well. It is called the law of intestate succession.

It has the ability to properly outline the way how the next of kin will be able to inherit the spouse. In here, the spouse of the deceased person will be able to get a part of the property owned by the decedent. On the other hand, the law would further break down to what the siblings, grandchildren, aunts, uncles, and the siblings will be able to inherit.

It is also important to understand that the probate law would vary from one state to another. Due to the same reason, you should get in touch with a lawyer in your state and get a clear understanding of the law that you will need to adhere to. This is the most effective method available for you to refrain from facing any complications while trying to deal with the probate law.

What would happen for probate with a will?

What would happen if a person dies with a will? In this kind of situation, the will act as the last statement. Hence, the property will be distributed according to the way how it is described in the will. But if the deceased person has debt, the probate court will pay attention to the will. Here, the probate court would initially check and confirm if the will is still valid or not.

If there is a will, the surviving spouse would be able to receive a portion of the property. This will be called the effective share of the surviving spouse. However, this amount would vary from one state to another as well. That’s why you should work closely with a probate lawyer and get to know about the conditions that exist in your state.

Understanding the probate process

The overall probate process would begin when a person files a petition. In most instances, family members or one of the lenders will go ahead and file this petition. Then the case will be taken to the probate court. If you happen to go to a probate court, you need to understand what is a probate court. Based on that understanding, you will be able to get yourself familiar with the actions that are taking place within the probate court.

If there is a will, it is important to file a copy of that will along with the petition. Then the probate court will be able to consider the will and proceed with the rest of the work that will be conducted at the probate court. In some of the states, you will be able to discover probate court forms. If your court is offering such a form, it would be possible to navigate through the proceedings with ease. That’s because the probate court form will provide you with a clear understanding of what you should be doing.

The probate court will then issue an order, where a person will be appointed. This person will be representing the estate. Here, the appointed person will be usually called the executor or personal representative. However, there are also situations where that person is called the administrator. If there is no will, the appointed person will usually be called the administrator.

It would be the responsibility of this personal representative to take care of all the administrative work. In other words, he will have to open the estate bank accounts, arrange public notices and publish them within the newspapers, determine the validity of all the claims that are put forward by the creditors, sell the assets if there is a need, send notices to the beneficiaries, fill all the court documents and file the last tax return for the deceased person. After doing all these things, the executor would usually transfer the remaining assets to the beneficiaries.

Final words

The probate court will be able to provide relief to the creditors as well as the loved ones of a deceased person who will inherit the assets. It is important to have a clear understanding of the nature of work that is done by the probate court and act accordingly. Then you will be able to get all the support that you need from the probate court in an effective manner. To overcome complications associated with this process, you should always be working along with an experienced lawyer. Then you will not come across any troubles.