What Your Estate Planner Attorney Won't Tell You (But I Will) | Repair The Roof Podcast

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In this conversation, estate planning attorney Ted Gudorf discusses critical aspects of estate planning that are often overlooked. He emphasizes the importance of understanding the implications of wills and trusts, the necessity of incapacity planning, the significance of properly titling assets within a trust, and the tax implications associated with revocable trusts. Ted aims to educate families on how to avoid common pitfalls in estate planning to ensure their loved ones are protected and not burdened with unnecessary legal complications.

Signing Your Estate Plan Is Only the Beginning. What Happens Next May Determine Whether It Actually Protects Your Family.

Most people walk out of an estate planning attorney’s office with a folder full of signed documents and one reassuring thought:

“My estate plan is done.”

Unfortunately, that may be exactly where the problems begin.

A will can still send your family through probate. A trust may accomplish very little if your assets were never properly connected to it. And even a carefully drafted estate plan can leave a major gap if it doesn’t address what happens when you’re alive but unable to make decisions for yourself.

After more than 35 years of helping families with estate planning, I’ve seen the consequences when these details are overlooked.

The issue usually isn’t that someone failed to create an estate plan.

It’s that they assumed signing the documents was enough.

Here are four important issues your estate planning attorney should help you understand—and why reviewing them now could make a significant difference for your family later.

1. A Will Does Not Automatically Keep Your Family Out of Probate

One of the most common estate planning misconceptions is that having a will means your family can avoid probate.

Generally, that isn’t what a will does.

A will provides instructions for how certain assets should be distributed after your death and can nominate people for important roles, such as an executor or guardian for minor children.

But assets controlled by your will generally pass through probate.

Probate is the court-supervised process used to administer an estate. Depending on the circumstances, your family may need to file documents with the court, notify creditors, complete inventories, satisfy legal deadlines, and obtain court approval for certain actions.

That can create three problems families often want to avoid:

  • Time: Probate can take months and sometimes significantly longer.
  • Cost: Court expenses, professional fees, and administrative costs can reduce what ultimately passes to beneficiaries.
  • Privacy: Probate proceedings are generally matters of public record, which can make information about the estate accessible to others.

Even an estate that appears relatively straightforward can encounter delays.

That becomes especially important when family members need access to assets quickly to handle expenses, maintain property, or address other financial obligations.

A Will Still Has an Important Role

None of this means a will is unnecessary.

A will can remain an essential part of an estate plan. For example, it can nominate guardians for minor children and provide instructions regarding assets that are subject to probate.

The key is understanding what the will can—and cannot—accomplish.

If one of your primary objectives is avoiding probate, maintaining privacy, or simplifying administration for your family, relying solely on a will may not accomplish those goals.

A properly structured and funded trust may be part of the solution, depending on your circumstances.

The question to ask your attorney is simple:

“Is my estate plan actually designed to avoid probate, and if so, which of my assets will still be subject to probate?”

The answer may reveal gaps you didn’t know existed.

2. Your Estate Plan Needs to Protect You While You’re Still Alive

Most people naturally associate estate planning with death.

But one of the most important reasons to create an estate plan has nothing to do with what happens after you die.

What happens if you’re alive but cannot make decisions for yourself?

An unexpected illness, injury, or cognitive impairment can leave someone temporarily or permanently unable to manage financial or healthcare decisions.

A will generally does nothing to solve that problem because it only becomes effective after death.

Without appropriate incapacity planning, family members may need to seek court involvement to obtain authority to make decisions.

Depending on the circumstances and applicable state law, this could involve a guardianship or similar court proceeding.

That process can be time-consuming, expensive, and public.

More importantly, the person ultimately given authority may not be the person you would have chosen yourself.

Incapacity Planning Changes the Conversation

A comprehensive estate plan should answer questions such as:

Who handles your finances if you cannot?

Who makes healthcare decisions?

Who manages assets held in your trust?

How is incapacity determined?

What instructions have you provided about your care?

A properly drafted and funded revocable living trust can allow a successor trustee to manage trust assets if you become unable to do so yourself.

Other documents can address decisions outside the trust.

For example, a healthcare power of attorney can authorize someone to make certain medical decisions when you cannot make them yourself. A financial or general durable power of attorney can provide authority over financial matters within the scope of that document.

These documents should work together rather than contradict one another.

Imagine discovering during an emergency that your trust names one person, your financial power of attorney names someone else, and an outdated healthcare document names a third person you no longer want making decisions.

That is exactly the kind of confusion good planning is supposed to prevent.

Pull out your estate planning documents and ask:

“If I became incapacitated tomorrow, who would have authority to act—and are my documents consistent?”

If the answer isn’t immediately clear, your plan may deserve another look.

3. Signing a Trust Does Not Mean the Trust Is Actually Working

This may be the most overlooked issue in trust planning.

You can pay an attorney to create a carefully drafted trust, sign every document correctly, place everything in an organized binder—and still have assets that end up outside the trust.

Why?

Because creating a trust and funding a trust are two different steps.

A trust generally controls assets that have been properly transferred to it or otherwise directed to it under the estate plan.

If an asset remains individually titled, the trust may not control it merely because the trust document exists.

Consider your home.

If your estate plan calls for your home to be owned by your trust but the deed was never changed, the property may remain outside the trust.

Similar issues can arise with financial accounts and other titled assets.

This creates a frustrating situation for families because everything may look complete on paper.

The trust exists.

The documents are signed.

The instructions are clear.

But the assets and the documents never got properly connected.

Beneficiary Designations Can Create Another Gap

Some assets pass according to beneficiary designations rather than through a will.

Retirement accounts and life insurance are common examples.

That means beneficiary designations need to coordinate carefully with the rest of your estate plan.

Suppose you create a trust designed to hold an inheritance for a child under specific terms.

But your retirement account still names that child directly as beneficiary.

Depending on the account, plan documents, applicable law, and beneficiary designation, those assets may pass directly to the child instead of under the trust provisions you intended to use.

That can defeat part of the planning objective.

It’s also important not to assume every asset should simply name your trust as owner or beneficiary. Retirement accounts, life insurance, vehicles, and other assets can have different legal and tax considerations.

The correct structure depends on your specific circumstances.

That’s why estate planning needs to go beyond document drafting.

It requires coordination.

Review items such as:

  • Real estate deeds
  • Bank and brokerage accounts
  • Life insurance ownership and beneficiaries
  • Retirement account beneficiaries
  • Vehicle titles
  • Transfer-on-death or payable-on-death instructions

Then compare them with what your estate plan is actually designed to accomplish.

The most important question isn’t:

“Do I have a trust?”

It’s:

“Have my assets and beneficiary designations been coordinated with my trust?”

That distinction can determine whether the plan functions as intended.

4. A Revocable Living Trust Isn’t Automatically a Tax-Saving Strategy

Another common misconception is that simply creating a revocable living trust reduces your taxes.

Generally, it does not.

A standard revocable living trust is primarily an estate planning and asset-management tool. While you’re alive and retain control of the trust, creating the trust generally does not by itself eliminate income taxes, capital gains taxes, or federal estate taxes.

That doesn’t make the trust unimportant.

Its value may come from other areas, including:

  • Probate avoidance for properly funded assets
  • Privacy
  • Incapacity planning
  • Continuity of asset management
  • More efficient administration after death
  • Greater control over how certain beneficiaries receive assets

Taxes still need to be considered separately as part of the overall plan.

Appreciated Property Deserves Special Attention

Consider a home purchased years ago for $300,000 that is worth $900,000 at the owner’s death.

Under current federal tax rules, inherited property may generally receive an adjustment in tax basis to its fair market value as of the owner’s date of death, subject to applicable rules and individual circumstances.

That adjustment can have a major impact on potential capital gains if beneficiaries later sell the property.

But this is precisely why families should understand the difference between estate planning and tax planning.

The way property is owned, transferred, and ultimately sold can have legal and tax consequences.

A trust may help streamline how property passes, but simply having a revocable trust does not create a universal tax advantage.

Before transferring, gifting, retitling, or selling highly appreciated property, it is important to coordinate with qualified legal and tax professionals.

The objective isn’t simply to avoid probate.

It’s to make sure one planning decision doesn’t unintentionally create another problem.

The Estate Planning Question Most People Never Ask

There is a larger lesson behind all four of these issues.

Estate planning isn’t primarily about documents.

It’s about whether those documents work when your family actually needs them.

You can have an impressive estate planning binder and still leave your family facing court proceedings, conflicting instructions, improperly titled assets, or beneficiary designations that undermine your intentions.

That’s why an estate plan should be treated as a coordinated system.

Your will, trust, powers of attorney, deeds, account titles, and beneficiary designations all need to point in the same direction.

And your plan shouldn’t remain untouched indefinitely.

Major changes involving your family, finances, property, beneficiaries, or applicable laws can create reasons to review whether your existing plan still reflects your goals.

One Estate Planning Review Could Reveal the Gap

If you already have an estate plan, don’t assume you need to start over.

Start by asking better questions.

Who has authority if you become incapacitated?

Which assets would still pass through probate?

Has your trust actually been funded?

Do your beneficiary designations support or bypass the protections in your trust?

Are your estate and tax strategies properly coordinated?

You may discover everything is structured exactly as intended.

Or you may discover one overlooked detail that could create significant complications later.

Either way, knowing now gives you an opportunity to address the issue before your family is forced to deal with it.

Conclusion: Your Signature Doesn’t Finish the Plan

Signing a will or trust can feel like the finish line.

In reality, it’s often the beginning.

A strong estate plan needs to address what happens after death, what happens during incapacity, how your assets are titled, who your beneficiaries are, and whether all of those pieces work together.

The goal isn’t simply to have documents.

The goal is to create a plan that functions when the people you care about need it most.

Take another look at your estate plan. Check your documents, account titles, deeds, and beneficiary designations. Then discuss any inconsistencies or unanswered questions with your estate planning attorney and tax professional.

Because the effectiveness of an estate plan isn’t determined by how good the documents look in the folder.

It’s determined by what happens when that folder finally has to do its job.

Transcript: Prefer to Read — Click to Open


Ted (00:00.046)

Most people think their estate planning attorney has already told them everything they need to know. Well, they haven’t. I see families every week who signed a will, signed a trust, and walked out of the office feeling done. But signing the paperwork isn’t what protects your family. What happens after that signature is where most plans fall apart, and almost nobody explains that part to you.

I’m Ted Gudorf, a board certified estate planning attorney in Dayton, Ohio, and I’ve spent over 35 years watching families find out the hard way that their plan didn’t work the way they thought it did. In this video, I’m going to show you four things your estate planner rarely sit down and explain, including the one most people never think about until it’s too late. The first thing they won’t tell you is that a will is

means your family is likely heading to probate court. Most people believe a will keeps their family out of court. It doesn’t. A will only takes effect after you die and it sends your family straight into a process called probate. In fact, a will guarantees probate. I had a client last year with a fairly simple estate. No fighting between the kids, no complicated assets, nothing really unusual.

It still took almost a year to settle that estate, and the legal fees ran into the tens of thousands of dollars. Remember, as a general rule, probate fees run up to five to eight percent of the value of the estate. On a million dollar estate, that’s roughly fifty to eighty thousand dollars. Money that doesn’t go to your family, it goes to the process. Here’s what probate actually looks like.

Your family has to file court forms, notify creditors, wait out legal deadlines and get a judge’s permission before they can do much of anything. Creditors get six months to file claims against the estate before anything is finalized. If your family needs money fast for a funeral, for medical bills, for a mortgage payment, probate can freeze that access for months. And here’s what most people don’t realize.

Ted (02:26.52)

Probate is a public record. Anyone can look up what you own and who got it, including an inventory of assets and the details of who received what. A will still does some things well. It names a guardian for your kids. It tells the court who should get what. But if privacy, speed, and avoiding probate matter to you, a will by itself is not going to get you there.

So here’s what to do. Ask your estate planning attorney directly. Is my plan built to avoid probate or is it just a will? If the answer is just a will, that’s the first thing to fix. And the fix is moving your assets into a trust while you’re still alive. The second thing they won’t tell you is the one almost everyone misses, and it has nothing to do with what happens when you die. Every estate plan.

Plan that I see deals with death. But almost none of them deal with what happens if you become sick or injured and cannot make decisions for yourself. This is called incapacity planning. And it’s the piece people forget to ask about. A will does nothing for you while you’re alive. If you become incapacitated and you only have a will, your family has to go to

Probate court and ask a judge to appoint a guardian. Both a guardian of your person to make medical decisions and a guardian of your estate to handle your money. We call this living probate, and it works exactly like the probate process after death. It lasts the rest of your life.

A properly funded trust avoids this entirely. When you set up your trust, you name a successor trustee, someone who steps in and manages your affairs the moment you cannot. Without a judge, without a courtroom, without anyone outside your family knowing. You can also spell out exactly how you want to be cared for. Do you want to stay in your home as long as possible? Who decides when you’re no longer able?

Ted (04:51.362)

To make decisions for yourself. Those questions get answered in advance, in writing, instead of left to whoever ends up in a courtroom fighting about it. Alongside the trust, you also need a healthcare power of attorney and a general power of attorney. The healthcare document names who makes medical decisions for you if a physician determines that you cannot. The general power of attorney names who handles your finances.

While you’re alive but unable to act. Now the assets already sitting inside your trust don’t need either document to be managed because your successor trustee just steps in. So here’s what to do: find your healthcare power attorney and your general power attorney and confirm your successor trustee is named in both documents, not just in the trust. If they’re missing or don’t match,

That’s a conversation to have with your estate planning attorney this week. I’ve watched families go through a guardianship because a parent only had a will. It’s expensive, it’s public, and it doesn’t go away. This is the piece I want you to remember most because it’s the one your plan is probably missing. Picture the folder your documents are sitting in right now. If your successor trustee isn’t named consistently across every page,

That folder isn’t doing its job. The third thing they won’t tell you is that signing a trust doesn’t mean it’s actually working. This is the one that surprises almost everyone I meet with. You can sign a trust, feel like your planning is done, and still have a trust that does nothing for your family, whether you’re incapacitated or you’ve passed away. A trust only avoids probate, both living probate and death probate.

If your assets are actually titled inside of the trust. If your house is still titled in your name, the trust can’t help you. If your bank account is still in your name, the trust can’t help you. I’ve seen this happen more times than I can count. Someone signs a beautifully written trust, but the house never gets moved into it. When they die or when they become incapacitated, the house still goes through the court process.

Ted (07:18.198)

And the trust just sits there unused. This applies to more than just your house. Your bank accounts need to be retitled directly into the name of the trust, not just left with a beneficiary designation. Your vehicles should be retitled too, since a car without a title in the trust name can still require a probate filing. Life insurance policies.

Need both the owner and the beneficiary change to the trust, not just the beneficiary. Otherwise, the payout skips the protections you built into the trust entirely. Retirement accounts cause a similar problem, but in a different way. A parent sets up a trust hoping to protect an inheritance for their kids. But the retirement account still lists the child directly as beneficiary. The money skips the trust entirely.

The child gets a lump sum with no rules and no protection, which means that money is exposed to their lawsuits, perhaps a divorce or a bad decision down the road. This is exactly the kind of gap a continuing trust is designed to close. If that same retirement money passed into a trust for your child, it would stay protected from creditors, from lawsuits, and from a

possible divorce for that child’s entire life. So here’s what you need to do. Pull out your deed, your bank statement, your vehicle titles, your life insurance, and your retirement account paperwork, and check exactly how each one is titled. If your trust isn’t listed as the owner or beneficiary, call your estate planning attorney this week and get it fixed. The fourth thing they won’t tell you

Is that a revocable trust does not lower your taxes, but it still helps your family avoid unnecessary costs. A revocable trust doesn’t reduce your income tax, your capital gains tax, or your estate taxes while you’re alive. What it does is control how your assets pass, avoiding probate and letting your family act quickly instead of waiting on a court.

Ted (09:39.83)

Say you bought your house years ago for three hundred thousand dollars and today it’s worth nine hundred thousand. When your kids inherit it through a properly funded trust, the tax value resets to what it’s worth on the day you pass away. This is called a step up in tax basis. If they sell soon after, they may owe little to no capital gains tax.

And they can sell fast without probate holding up the paperwork or freezing the property. So here’s what to do. If you own a home or property that’s grown significantly in value, talk to your attorney about how it’s titled and confirm your family understands the step up in basis before they sell. That one conversation can save them a real tax bill. None of this is about fear.

It’s about making sure the people you love don’t inherit a mess you could have prevented. If you’ve already signed your plan, check today how your house, your accounts, and your retirement plans are titled. Ask who steps in if you become incapacitated tomorrow. If you’re not sure whether a will or a trust fits your situation, click on a will versus a trust. Which do you need right here?

I’ll show you exactly how to decide.

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