AVOIDING THE $50K DIY WILL:

10 Things You Should Know About Estate Planning to Save Your Family Thou-
sands of Dollars and Infinite Stress

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Story Behind the $50K Will
During the last year alone, I have worked on at least three estate litigation cases
that exceeded $50,000 per family in collective attorney fees and caused count-
less months of emotional turmoil for my clients stuck in the middle of estate
litigation. Although not all estate litigation is avoidable, I am determined to
help people learn from the common mistakes or improvements I identify for
these litigated estate plans so that more people are able to achieve peace of
mind and predictability for their loved ones. Unfortunately, there is not current-
ly a one-size-fits-all solution for avoiding litigation, but through proper docu-
ment drafting, legal advice, and attempting to maintain a strong network of
family or social connections, we can help safeguard ourselves and our loved
ones against elder abuse and ensure that the plans we design have the high-
est chance to succeed in creating a legacy upon which those we love can build.

What is an Estate/Disability Plan, and Why Should You Care?

An estate plan or disability plan typically consists of a set of documents de-
signed to provide instructions for your personal care and the care of your
property while you are alive and for the distribution of your property after your
death. However, our firm encourages you to think of these plans as more than
a set of documents. These plans require strategic decisions and should grow
with you as your family, your property, and the laws change. Your plan should
be customized through careful design to provide ultimate protection for you
and your loved ones.
If you have no estate or disability plan, your loved ones are likely to spend thou-
sands of extra dollars and significant time and stress trying to manage your
affairs. Even if you have a set of documents for your estate or disability plan,
if they’re out of date, not carefully prepared, or if your family doesn’t know
where to find them, you’re not much better off than if you had no estate plan.
Thoughtfully designing your plans for the care of you and your property will
help achieve the best outcomes for those you care about most.
If your family does not get along now, their relationships are likely to deterio-
rate after you have become disabled or have passed away. The stress of a family
member’s illness or death can make people more likely to fight about powers
of attorney, guardianship, or probate documents. Providing clear, legally en-
forceable instructions minimizes stress and conflict. Taking advantage of the
best available legal tools for providing these clear, legally enforceable instruc-
tions can help save thousands of dollars that could otherwise be wasted on
legal battles or avoidable legal proceedings. If you become seriously ill, injured,
or pass away, your family and friends must be able to find the documents ap-
pointing short-term and long-term guardians for children, powers of attorney
and other agency documents, and your Will. There should also be a method
for your loved ones to access funds for your care or for the care of your children
without having to wait weeks or months for guardianship appointments to
become finalized. Creating clear, properly drafted legal documents and a solid
strategy that adapts to your changing life can help save your loved ones signif-
icant financial and emotional costs during these traumatic times that unfortu-

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nately do affect every family.

What is a Will?
A Will is a document in which a person, referred to in the will as the “testa-
tor,” provides directions about the management and distribution of testator’s
property after death. The Will appoints a personal representative, commonly
referred to as the executor, to step into the testator’s role of managing property
and ensuring that it is transferred to the beneficiaries named in the Will.
A Will does not have any legal effect until the testator dies and someone applies
to have the Will “admitted to probate,” which is the legal process required to
confirm the Will’s authenticity and to appoint the executor with legal authority
to manage the estate. The executor cannot take action under the Will until the
Will has been admitted to probate and the executor receives a document from
the court called Letters Testamentary proving the executor’s legal authority.
After receiving Letters Testamentary, the executor can begin gathering all the
testator’s property and preparing the paperwork required to pay the debts and
change title into the beneficiaries’ names. The probate section describes in
more detail what types of property must be transferred through the court’s le-
gal process, but it is crucial to understand that if you have probate property, it
is difficult or sometimes even impossible for any of your beneficiaries to access
the property until the court has validated your Will and appointed an executor.
Although a Will can be handwritten or somewhat informal, the process of ad-
mitting a Will to probate is significantly easier, meaning less expensive and
less time-consuming, if it follows the precise format that is recommended un-
der state law. The format of a Will is very important because, as described in
the probate section of this book, the court must authenticate a Will and con-
firm the signature and the enforceability of the Will as a substitute for the tes-
tator’s live testimony about his or her last wishes. Each state has laws about
the level of proof necessary to authenticate a Will, including both proof of the
testator’s capacity at the time of signing the Will and proof of the testator’s sig-
nature. Formatting errors from using online or do-it-yourself forms can result
in thousands of dollars of additional costs due to additional proof required for
the authenticity of the signature or the testator’s capacity, and an attorney can
provide the best documents or document optimization and advice to help the
probate process flow smoothly and without legal expenses that result from pro-
bating do-it-yourself Wills. Even worse, if your Will does not incorporate “best
practices” about the format and signatures, the additional proof requirements
for authenticating your Will open the door for legal conflicts or Will contests.
To minimize these costs and chances of Will contests, it is imperative that you
address the following issues in your Will: (1) follow the most recent law for prov-
ing your capacity and your signature, including notarization and signatures
of two witnesses (in Texas, as of the time of writing in 2019); (2) make sure that
your Will is formatted in a way that the judges and attorneys in your jurisdiction
recognize and easily accept; (3) name an executor and at least two alternate
executors who will act responsibly as fiduciaries for your estate; (4) include a
“residuary” clause to ensure that none of your property is required to be trans-

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ferred through intestate legal proceedings; (5) name alternate beneficiaries
or include language describing who should receive property if your primary
beneficiaries predecease you; (6) specifically disinherit any people you desire
to prevent from receiving a share of your estate. It is also imperative that you
keep track of your original Will, because admitting a copy of your Will requires
additional legal proof of its authenticity. Although it is possible and common to
admit a copy of a Will to probate, you will save hundreds or even thousands of
dollars by following these steps to preserve the original signed draft of your Will
and follow guidelines to simplify the process of proving your Will, appointing
your executor, and identifying all of your property and the beneficiaries enti-
tled to receive it.
The goal of estate planning is to help you provide clear, enforceable instruc-
tions about your wishes to your loved ones. An attorney can provide both the
best documents or updates and optimization of your documents and the best
legal advice to ensure that your wishes are followed while also avoiding com-
plications that can cause both extreme emotional and financial strain on your
family.

How can I change my will?

Because your Will does not have any legal effect until you die, your Will can be
changed through a codicil or an entirely new Will. The most recently signed
Will is presumed to be the Will entitled to be admitted to probate, and most
Wills include a statement revoking all prior Wills. Unfortunately, the fact that
your Will can be replaced until the minute you die and does not have any legal
effect until it is admitted to probate does require you and your loved ones to
take additional precautions to safeguard your wishes while you are compe-
tent and to track and understand the documents so that a clear plan of action
can be followed. It is quite common for people to take advantage of a person
during a time of vulnerability and induce the vulnerable person to change a
Will, power of attorney, and ownership of bank accounts, or other assets, and
it is important to understand the process by which these changes can occur.

What is a Trust?
A trust is a legal relationship between the person or people creating the trust
(sometimes called “grantors,” “trustors” or “settlors”), the trustee who is ap-
pointed to manage property in the trust, and the beneficiaries of the trust. The
rules of this relationship are governed by a trust agreement, which contains
all the rules governing the rights and duties of the grantors, the trustee, and
the beneficiaries. There are many different types of trusts that can be used to
achieve many different outcomes, including avoiding probate, asset protec-
tion, minimizing estate taxes, minimizing income taxes, and easy and efficient
management of property placed in the trust, just to name a few of the most
common trust purposes. Because there are so many different types of trusts, it
is important to make sure that you use the right type of trust agreement with
the proper language to accomplish your objectives, and you should consult an

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attorney and accountant about the legal and tax implications of administering
your trust.
A trust can be thought of as a box created to hold legal title to property. The
property placed into this box is titled in the name of the trust, and the trustee
is given legal authority to carry the box and control how and when property
is distributed from the box to the beneficiaries. Because the property is titled
in the name of the trust instead of the grantors or beneficiaries’ names, the
property is not considered a “countable resource” for Medicaid or social secu-
rity eligibility, and an attorney can help you strategize to shield the property
from probate and guardianship estates so that court orders are not necessary
for management of the property. Of course, placing property into the trust to
minimize the need for legal proceedings requires careful selection of a trustee
who will safeguard the trust property and consult legal and tax professionals to
ensure proper trust management for the beneficiaries.
Some examples of the different types of issues your attorney must address
during the trust planning stage include describing whether the trust is revo-
cable and how it can be amended, naming or classifying the trust beneficia-
ries, describing when distributions should be made and to whom, describing
whether beneficiaries have the right to become trustees or to control distribu-
tions of the trust, and stating how new trustees will be appointed or removed.
These decisions affect the extent to which the trust agreement accomplishes
the various objectives of avoiding probate, minimizing estate taxes, minimiz-
ing income taxes, or achieving asset protection from creditors. With careful
planning and ongoing advice, trusts are a powerful tool that can help avoid
legal proceedings like probate and guardianships, and they can promote Med-
icaid eligibility and discourage claims from creditors (including spouses). It
is also important to consult with an attorney and tax advisor regarding the
types of property placed in the trust and to ensure the trust is properly fund-
ed. Additionally, even if a trust agreement is properly tailored to promote the
objectives of the trust and is funded properly, the trustee must administer the
trust properly to preserve the design and avoid expensive mistakes, so a trust-
ee should continue to consult attorneys and tax advisors regarding significant
trust events and decisions after the trust has been formed.
The trustee has a fiduciary duty to the beneficiaries to put the beneficiaries’
needs and best interest above those of the trustee, and the trustee may only
receive compensation or property if the trust agreement gives permission to
do so. As described in the fiduciary section of this book, a fiduciary duty is the
highest duty under the law and should be taken very seriously because a fidu-
ciary can be punished severely for breaching the duty to the beneficiaries.

What is a Power of Attorney?

A power of attorney is a document in which someone called a “principal” grants
authority to someone called an “agent” to take action on the principal’s behalf.
The agent has a fiduciary duty to follow the principal’s instructions in the pow-
er of attorney. The power of attorney must follow legal formalities to be accept-
ed by third parties or to be enforced in court if a dispute arises.

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Two of the most common types of powers of attorney are the statutory durable
power of attorney (often called a “financial power of attorney”) and a medical
power of attorney. These two powers of attorney give the agent the authority
needed to avoid most guardianships by empowering an agent to make most
or all of the same decisions that a guardian would have to make for the princi-
pal. There are some circumstances in which a guardianship might still become
necessary, if for example, the power of attorney doesn’t grant all of the neces-
sary authority or is invalidated. However, without a financial or medical power
of attorney, the chances of requiring a guardian to manage your care or prop-
erty are exponentially higher, and almost everyone encounters the need for a
financial and medical power of attorney at some point during life.
Along with the financial and medical power of attorney, other “ancillary” docu-
ments should be prepared, including a living will (also known as an Advanced
Directive or Directive to Physicians), a HIPPA release, an Authorization for Dis-
position of Remains, guardianship designations, and other documents in-
tended to help you give clear instructions about your medical care and other
important decisions about your personal care and the care of your property.
These documents serve as a substitute for your own decision making if you
are not available to communicate these decisions for any reason. If you do not
have these documents or no one can locate them, and if they are not kept
up to date, it very likely your loved ones will fight about these decisions when
you become sick or die, and clarity helps avoid expensive legal disputes about
these decisions.

What is a Fiduciary?
A fiduciary is a person who holds a legal relationship of trust. A fiduciary duty
can be created many different ways, but one of the most common ways of cre-
ating a fiduciary duty is through a document, such as a Will, trust agreement,
or power of attorney. Executors, trustees, agents appointed in a power of attor-
ney, attorneys, financial advisors, and corporate board members are all exam-
ples of positions that involve fiduciary duties. A fiduciary relationship can also
arise without a written agreement when a professional or personal relationship
involves a high degree of trust between parties. For example, a husband and
wife owe each other a fiduciary duty in some jurisdictions.
Someone who owes a fiduciary duty owes the highest duty under the law to
act at all times for the sole benefit and in the best interest of the one who has
entrusted the fiduciary. A fiduciary has duties to disclose information and to
maintain loyalty to the beneficiaries or principals who have appointed the fidu-
ciary, and breaching a fiduciary duty can result in punitive damages, forfeiture
of compensation for fiduciary services, and possibly even criminal charges or
incarceration for intentional breaches.
It is important to discuss your legal plans with the fiduciaries named in your
documents so that they are aware that you have appointed them and so they
have access to all the important information about your intent so that they can
faithfully follow your instructions.

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Why Having a Will is Not Enough.
It is important to consider your estate and disability plans as a process, not as
a set of documents. If you only prepare a Will without also preparing powers
of attorney, guardianship designations that are separate from your Will, and
some of the other important ancillary documents, you are inviting legal dis-
putes and unnecessary legal costs.
Just because you have a Will does not mean that it currently suits your needs
or that it is enforceable. If you do not know the location of your original Will,
and more importantly, if your family members do not know the location of your
original Will, there is a good chance that your Will might not be probated or
that it will cost thousands more dollars than it should for probate. If your Will is
not optimized or easy to locate, there is also a much higher risk that your Will
could be contested and therefore might not be enforced exactly as you intend.
In addition to these issues of optimizing and locating your Original Will, it is
important to have all the other documents that protect you and your family.
These documents include powers of attorney, standalone short-term and long-
term guardian designations (especially if you have minor children so that you
can avoid undue risk of children being placed in temporary protective custody
or foster care), and other planning documents that minimize the possibility of
disputes about the care of you and your property.
While you update your Will and other “ancillary” documents, you should take
the opportunity to discuss your existing estate plan with an attorney to see
whether you can save legal fees or taxes through additional planning. Some of
the legal fees for estate and disability planning might be deductible from your
income taxes if the legal services and documents relate to income or estate
tax planning, and your attorney and CPA can assist you with designing an es-
tate plan that can help minimize these taxes.

Why Parents MUST Have a Solid Estate and Disability Plan

Parents with minor children must take extra precautions with their estate plan,
both in making sure to complete a full spectrum of planning documents and
in making sure that all of the people appointed in their estate plans are aware
of their roles and what to do if something happens to one or both parents. Who
should care for the kids short term? Who will provide long-term care? Who
should manage the money left to children? Is there anyone who should be ex-
cluded from caregiving or financial roles? Do the people appointed know your
values and the decisions you would make for your children? To avoid tempo-
rary placement of children in protective custody, it is crucial that parents take
advantage of all of the available methods of providing instructions and ensur-
ing the location of these instructions about the care of their children so that
there is always someone available and authorized for these important roles.
In addition to creating a complete plan with clear instructions about who and
who should not become authorized to care for minor children, parents should
also create a complete financial plan for their children. Keep in mind that, with
the exception of specialized financial accounts, minor children may not own

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property in their own name. Your estate plan must leave property to them in a
manner calculated to make funds available for your appointed guardian’s use
as quickly as possible, which means your guardian should not have to wait sev-
eral weeks (or even several months in same cases) for probate and guardian-
ship appointments. At the same time, you should not rely on naming someone
as a joint owner on a financial account as a method of avoiding probate to en-
sure funds are available immediately upon your death without understanding
the risks of this decision; pay on death designations or trusts are much safer
methods of making funds available without probate proceedings, and an at-
torney can help you understand these decisions and structure an estate plan
that will help provide your loved ones with an easier transition during a very
difficult time.

What is a Guardianship?
A guardianship is a court-created legal position for the care of a person and a
person’s property. Just as the law divides powers of attorney for the care of fi-
nances and medical care, courts create separate guardianships for the care of
an individual and the management of the individual’s property (called the “es-
tate”). It is quite common to appoint a guardian of the person without appoint-
ing a guardian of the estate, and it is best to avoid the need for a guardianship
of the estate if at all possible.
Guardianships are typically created when somebody is mentally or physically
disabled or when a minor does not have a parent alive or available to provide
care. Although guardianships are occasionally established because of the need
to limit a disabled person’s rights, such as the right to engage in financial trans-
actions or the right to drive or vote, guardianships are most frequently created
to empower someone with legal authority to make all the care decisions on
behalf of a minor or disabled individual.

What is Probate, and How Can I Avoid It?

Probate is the legal process through which a deceased person’s estate is dis-
tributed to the closest living relatives (the “heirs”) or designated beneficiaries
in a Will. The probate process is designed to replace the deceased person’s
signature and authority through procedures to authenticate the Will and reg-
ulate the collection of probate estate property, payment of estate debts, and
the distribution of estate property to the proper parties. The probate process
requires several forms of notice to estate beneficiaries and to estate creditors.
Therefore, the contents of the will and to some extent, the information about
assets of the estate and the beneficiaries receiving them are publicly available.
An important part of the probate process includes the court appointment of
a personal representative, often called an “executor” for probate of a Will and
“administrator” for probate without a will. As described in the sections regard-
ing Wills and intestacy, property that does not have another method of being
retitled will have to be retitled through the probate process of the jurisdiction
where the property was owned, and the executor or administrator cannot con-

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trol or distribute the property until the hearing at which the court issues an
order appointing the personal representative. If property like a house or bank
account cannot be retitled through a probate avoidance method, no one will
have legal authority to manage the property until the court order is issued.
There are many ways to avoid probate, including, for example, using beneficia-
ry designations on life insurance policies and IRA’s, pay on death designation
for financial accounts, holding title as joint tenants with right of survivorship or
proper language creating life estates, and creating trusts that hold your prop-
erty during your life and allow for the automatic transfer of property at your
death. Some of these methods of avoiding probate may create risk or unin-
tended consequences, so it is important to consult with an attorney about the
proper use of these methods of avoiding probate. It is very important to note
that powers of attorney do not avoid probate, because they terminate upon
your death.

Why are some legal proceedings so expensive?

Sometimes, even when there is no dispute about facts about an estate or
guardianship, the legal cost will still be several thousand dollars. Sometimes
these costs can be avoided or minimized with proper planning, but sometimes
an estate or guardianship court proceeding will be required and there will be
court costs and attorney fees for these proceedings. Cases requiring appoint-
ment of third parties such as attorney ad litems and guardian ad litems (de-
scribed below) are more expensive and involve longer waiting periods than
cases without ad litems, but ad litems serve an important role in guardianship
cases and in cases where someone dies without a valid Will.

Guardianships
When a guardianship application is filed, the court is required to appoint an in-
dependent attorney called an attorney ad litem, and sometimes must appoint
another individual called a guardian ad litem, both of whom represent the in-
terests of the person alleged to need a guardian who may not be able to par-
ticipate fully in a court proceeding. For example, a disabled adult cannot nec-
essarily appear in court and testify about the person’s abilities and whether the
person’s rights should be limited under a guardianship, so the court appoints
an attorney ad litem and sometimes a guardian ad litem to represent the inca-
pacitated individual and help determine whether a guardianship is appropri-
ate. As described in the guardianship section, a guardianship is a legal process
of appointing someone to manage the care and sometimes the property of
someone who is a minor, or an adult who is incapacitated. The guardianship
process terminates many of the incapacitated person’s rights, and the scope
of rights that are terminated or transferred to the guardian requires proof of
the level of disability. Therefore, the ad litem also helps determine whether the
court should create a full guardianship or a limited guardianship. In addition
to the ad litem’s investigation and report, a Court investigator usually conducts
an independent determination of the guardianship and the qualifications of

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the guardian applicant based upon the evidence. Because this process re-
quires so much effort, and because so many attorneys and court resources are
involved, a guardianship can become quite expensive to create. It is difficult to
estimate the total cost of creating a guardianship of the person, but the typical
minimum cost would be approximately $1500 at the time of writing this book.
In addition to these costs for creating a guardianship for the care of a person,
a guardianship of the estate to manage property can require significant addi-
tional legal expenses. Before appointing a guardian of the estate, the court will
conduct a more rigorous investigation of the proposed guardian and will re-
quire an annual bond to protect the estate. In addition to maintaining a bond,
a guardian of the estate must file an annual report. The annual financial report
filed with the court is public record, which requires complete disclosure of all
estate assets and all receipts and disbursements. Therefore, preparing this an-
nual financial report may require assistance from professionals, including an
attorney and accountant. In addition to the cost of professional fees for prepar-
ing the annual report, the guardian of the estate will have to pay the amount of
the annual bond, which varies but is typically several hundred dollars each year.

Intestacy: Probate Without a Will

When a person dies without a will, the deceased person’s property often can-
not be retitled without legal proceedings called “intestate administration” and
“determination of heirship.” These proceedings are described in more detail
elsewhere. Part of the intestate probate process requires proving the identities
of the closing living relatives (the “heirs”), who are the people entitled under
state law to receive a share of the estate. The court must issue an order con-
firming the heirship facts and authorizing someone to gather the deceased
person’s property and retitle it or distribute it to the heirs. The court requires
independent proof the identity of the heirs listed in an application for probate,
so the court appoints an attorney ad litem to represents the “unknown heirs”
of the estate. The attorney ad litem’s job in an heirship proceeding is to inter-
view witnesses and find relevant records confirming the identity of the de-
ceased person’s closest living relatives. In addition to appointing an attorney
ad litem, notice of the pending heirship determination must be published to
give additional methods of ensuring that all interested parties, including family
members and creditors, become aware of a potential claim to estate property.
Because an heirship determination and intestate administration require the
verification of facts about the estate and the family history, it is typical for sev-
eral months to elapse between filing the applications and issuing the court or-
der authorizing estate distributions. The heirship determination and intestate
administration usually cost at least $5000, and it can cost significantly more if
it is difficult to confirm family facts or if there is a conflict about the estate.

What is the Difference Between a Probate Estate and an Estate Tax Estate?
A probate estate includes all of the property that must go through the court
probate process in order for title to transfer to the estate beneficiaries. Real

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estate and financial accounts are some of the most common types of property
that prompt my clients to seek my advice, usually because a title company or
bank has said that they will need to see Letters Testamentary or the Order Ad-
mitting the Will to Probate and a copy of the Will before they will allow sale or
access to the property.
It is important to note that sometimes, property can be pulled into a probate
estate to satisfy creditor claims or claims of family members under some cir-
cumstances, even if the property is not probate property because it has an-
other method of being retitled (such as a deed or pay on death designation).
When probate is “opened” through filing an application to admit a Will to pro-
bate or to open an “intestate” administration where there is no Will, creditors of
the estate have the opportunity to file claims and try to recover property that
would not have otherwise been probate property.
In the estate tax is estate is all of the property, including probate estate proper-
ty and all of the property controlled by the deceased person that doesn’t pass
through probate proceedings, and the federal (and state in some jurisdictions)
government track the taxable estate to determine what estate taxes might
become due.

What is the estate tax?

The federal government assesses an estate tax on estates that have a value
over the exemption amount in effect during the year of death. This exemp-
tion amount fluctuates drastically based upon the presidential and legislative
elections and political climate, and most experts believe that the estate tax will
apply to estates of a significantly lower value within the next 2-6 years. This ex-
emption amount includes not only your estate value on the date of death but
also all of the gifts made during life that are over the annual gift tax exclusion
amount for any given year. The federal government considers most property
that is under your control to be part of your estate, even if you don’t think the
property is held in your name. That’s why it is important to have an attorney
review your trust agreements and any trust that you are a beneficiary of so the
attorney has an understanding of your likely a state tax liability and can give
you good advice about your estate taxes planning.
Like the exemption amount, the estate tax rate varies based upon the political
climate, but during the last several decades the federal government has ap-
plied a 55% tax to estates over the excluded amount. Failing to plan for this tax
may result in the federal government taking 55% of the estate value (over the
exclusion amount) at the time of death, which estate has also been subject to
annual taxation through income taxes and/or capital gains taxes during each
year an individual worked to build his or her estate. For estates that are at risk of
being taxed, it is important to consult regularly with your CPA and attorney so
that you don’t accidentally expose your loved ones to a 55% tax on money you
have worked hard to earn during your life.

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