The other method I was thinking of turns out to be more trouble for you lol. I was thinking about creating poly text with no caps. Then combining all the letters into 1 mesh and using the append to poly tool to start piecing them together.

I'm thinking you should just use the boolean difference.
1. Create text
2. Create the cube you plan on cutting the text out of.
3. Make sure the text goes all the way through the cube. You should see the text in front and behind the cube.
4. Make sure an edge passes through all the letters. also make sure and edge passes through any parts of letters that are disconnected. For example, the letter B has two holes and each hole needs to have an edge through it. Since the horizontal edge doesn't go through both holes on the B, I created a Vertical Edge for the letter B in the attached image. Hope that's making sense to you.
5. Once you have all the edges you need on the cube, perform your boolean difference. Select the cube, then the text and perform boolean.
6. If you did everything correctly, you should be able to bevel the inside edges of the letters without your geometry going crazy. You'll probably want to use the split poly tool though to connect the inside edges to the outside. You'll be able to get better bevels if you do, otherwise your bevels may end up being really small.

I posted a screenshot of the text settings I used in case you were interested.