The Testamentary Trust Trap: Why That $150 Online Trust Won't Protect Your Family

You're doing your research on estate planning. You Google "create a trust" and suddenly you're bombarded with offers: "Set up your trust for only $150!" or "Complete estate planning for $200!"

Meanwhile, you call a lawyer and get quoted $10,000 or more.

What's going on here? Is estate planning really that expensive, or are lawyers just price gouging?

The answer is more disturbing than you might think—and it could cost your family everything.

The Hidden Danger of "Cheap" Trusts

Recently, I sat down with Ron Palmiter, my business partner at Enduring Legacy Mentors, who brings nearly 30 years of estate planning expertise to the table. What he revealed about testamentary trusts should concern anyone who's ever considered buying a trust online.

"I don't like having this conversation because it seems like we're pushing our agenda," Ron admitted. "But I just want to make sure people are getting what they think they're getting."

What Exactly Is a Testamentary Trust?

Here's the bombshell: A testamentary trust only takes effect after you die.

That might sound reasonable until you understand the implications. Unlike a revocable living trust, which protects your assets during your lifetime and after death, a testamentary trust forces your family through probate court—the very thing most people are trying to avoid.

"The court system will still put you through probate if you have a testamentary trust," Ron explained.

Quick probate recap: Probate is the legal process where courts oversee the distribution of your estate. It typically costs between 3-7% of your total estate value, takes an average of 12-18 months to complete (sometimes years), creates public records that expose your family's financial information, and gives judges—not you—final authority over your assets.

According to the American Association of Retired Persons (AARP), probate costs American families billions annually, with average expenses ranging from $20,000 to $100,000 depending on estate size and complexity.

The One-Word Warning Sign

Want to know if you have a testamentary trust? Ron shared a simple test:

"If you have a trust today, pull it back up. Open it. If it says 'will' and then your name of your trust—if it has the word 'will' in front of it in the name of the trust—that is a testamentary trust."

Examples:

• ❌ "Last Will and Testament of the Smith Family Trust"
• ❌ "Will and Trust of John Doe"
• ✅ "The Smith Family Revocable Living Trust"

A testamentary trust is essentially a hybrid document—part will, part trust. And like a will, it provides no protection from probate.

Why Would Anyone Sell These?

This is where things get really troubling.

The Lawyer's Business Model

"What the lawyers really love to do is to take you to court so they can get paid more," Ron said bluntly. "They're paid more in court than they are for just doing paperwork."

Think about the business model:

1. Initial Hook: Offer a cheap trust ($150-$200) that's essentially worthless
2. Guaranteed Return: When life changes happen (new baby, new property, death), clients must come back
3. Hourly Billing: Charge $200-$400+ per hour for updates and modifications
4. Probate Payday: If the client dies, represent the estate in probate court at premium rates

According to the National Association of Estate Planners & Councils, estate attorneys typically charge between $250-$500 per hour, with probate litigation fees often exceeding $50,000 for moderately complex estates.

"The lawyers all they're after is to protect you honestly, but they also want to make a living and they always charge by the hour," Ron explained. "So if they are providing you a service that's just mediocre or just enough to get by, to comply, then they know you're gonna have to come back to them."

The Hidden Costs Add Up Fast

I've talked to several people in Texas who were quoted a minimum of $10,000 to set up a proper will and trust. But here's what many don't realize: that's often just the beginning.

Common scenarios that trigger additional fees:

• Adding a new beneficiary (new grandchild): $500-$1,500
• Adding property to the trust: $750-$2,000
• Updating trustee designations: $400-$1,000
• Annual trust reviews: $300-$800

Over a lifetime, these "small" updates can easily exceed the cost of proper planning upfront.

Why Proper Estate Planning Costs More (And Why It's Worth It)

"We know based on what we provide our client base, that it doesn't cost 150 bucks," Ron said. "It costs quite a bit more."

But why?

The Difference Is Customization

At Enduring Legacy Mentors, we don't do cookie-cutter solutions. We recently worked with a client (we'll call her Susie) who has special needs children.

"She has special needs children, so that in itself is customized," Ron explained. "It's not just that cookie cutter trust because it's so much more detail."

Susie's situation required a combination of first-party and third-party special needs trusts—one child can work and drive but has disabilities; the other cannot work or drive and needs more comprehensive protection.

"It's a very unique, customized kind of situation," Ron noted. "This is why I love what we're able to do—providing solutions for people into the future."

We spent hours with Susie:

• Initial consultation to understand her family dynamics
• Detailed questionnaire about assets and wishes
• Multiple drafts and revisions
• Education about how special needs trusts work
• Ongoing support for life changes

This level of service simply cannot exist at $150.

The Real Cost of Getting It Wrong

Here's what most people don't consider: the cost of a cheap trust isn't $150—it's everything your family loses when that trust fails.

According to research from the National Center for State Courts, the average probate process involves:

• 12-18 months of legal proceedings
• Court fees averaging $2,000-$5,000
• Attorney fees of 3-7% of the estate value
• Executor/administrator fees of 2-4% of the estate value
• Lost investment opportunities during the frozen period
• Family conflict and emotional trauma

For a $500,000 estate, probate could easily cost $25,000-$50,000 or more—not including the time, stress, and family relationships damaged in the process.

The Truth About Wills

Many people think a will solves these problems. It doesn't.

"My barber just told me she needs a will, and she thought that by getting a will, she won't have to go to probate court," I shared with Ron. "But a judge in court can say, even though her will says this, I'm deciding we're gonna do this."

Critical fact: A will is just a wish. It's like tossing a penny into a well and hoping.

Judges have authority to:

• Override your guardian selections for minor children
• Reinterpret vague language
• Allow challenges from disgruntled family members
• Appoint administrators you never chose

"All a will is, is a letter. This is what I would like, but there's zero guarantee unless you have a trust and the trust is funded," Ron confirmed.

According to the American Bar Association, approximately 60-70% of wills face some form of challenge or dispute, leading to additional legal costs and family conflict.

The Successor Trustee Mistake

Even with a proper revocable living trust, many people make one critical error.

"You wanna make sure you have a successor trustee," Ron emphasized. "You need to have it named because if you don't have it named, even in your revocable trust, the court can still appoint one."

Why this matters:

Your successor trustee has power over:

• All your finances
• Your entire estate
• Any debts you have
• Your stocks and bonds
• Healthcare decisions (with healthcare power of attorney)

If you don't name one, the court chooses. They could appoint someone who:

• Doesn't know your family
• Doesn't share your values
• Makes poor financial decisions
• Even steals from the estate

"They could completely screw over the family," I noted. "Then someone sues. Who's gonna pay for the lawsuit? The estate. And by the time it's done, that thing has become very small."

The Professional's Ironic Confession

Ron shared a personal story that illustrates how easy it is to overlook estate planning—even for professionals.

"I've been in this business for so long, I know it's important to have life insurance for my family, and it's a substantial amount of money to protect them when I do pass," he said.

"The irony of it is, my wife asked me just the other day, 'You know what? I don't know where to find that. I don't even know what insurance company you have it through.' And I'm going, 'What did I do?'"

This is why we created the Survivor Guide—a one-page document that tells your family exactly where everything is.

"We do this for other people," Ron laughed. "We know what you guys go through. We've thought about it for ourselves personally, and that's why we love to do what we're doing—because we know we're protecting our family for sure, and we wanna protect your family even more."

A Better Approach to Estate Planning

At Enduring Legacy Mentors, we've built our business differently:

What sets us apart:

• No hourly billing for trust updates
• Customized solutions, not cookie-cutter templates
• Attorney-drafted documents that comply with state law
• Ongoing support without nickel-and-diming
• Education so you understand what you're getting
• Transparent pricing upfront

"You will never have to pay hourly lawyer fees for your will and your trust to be updated," I explained. "We have set up a system where those updates do not require bringing in a lawyer whom you have to pay hundreds of dollars an hour."

The trusts are still drafted by licensed attorneys who are approved by law to do this work. "You literally get the best of both worlds. You're not spending a ridiculous amount of money, but at the same time, you're getting a trust that has integrity both legally and financially to protect your loved ones into the future."

Take Action Now

Death is uncomfortable to think about. But avoiding it doesn't make you safer—it puts your family at risk.

"People don't like talking about death," I acknowledged. "But the reality is we're gonna die. So why not address it now and have a plan set up, then push it off and have to worry about it?"

Three steps to take today:

1. Check your existing documents - Do they have "will" in the trust name? If so, you have a testamentary trust.
2. Get expert guidance - Whether with us or another qualified professional, make sure you're getting a true revocable living trust, not a testamentary trap.

Your family deserves better than a $150 gamble with their future.

Talk to an Estate Planning Professional right now.

Disclaimer: This article provides educational information about estate planning and asset protection strategies. It is not legal, tax, or financial advice. Every situation is unique and requires personalized guidance from qualified professionals. Laws vary by state and change frequently. Consult with licensed attorneys, CPAs, and financial advisors before implementing any strategies discussed.