Estate planning isn't just for the wealthy. Louis Barajas explains why you need a living trust, will, and power of attorney if you own property or have kids, and warns that probate can take 1 to 1.5 years in California without one.
Welcome back. This is Luis Baragas, your financial life healer. And a question that I got this past week as well. Is that what, you know, like, how much wealth do I need to create an estate plan? Okay. And an estate plan is basically to get your living trust, a will, durable power, attorney, a health care directive, maybe a nomination of guardian. That's what an estate plan consists of. Of those several documents, there's. And it's never about how much money you have. It is about, you know, most people actually lead an estate plan. And I will share with you, if you're married and you have children and God forbid something were to happen to both of you, you and your spouse, while you go out to dinner, while the grandparents are taking care of the kids, you know, it's going to be critical that you have an estate plan because you know, you already have some assets, you may have some life insurance policies and they will not. The life insurance companies will not give that money to a 3 year old or a 5 year old or a 10 year old. And it's going to go through the court system, it's going to go through the probate system. It may take. Here in California, it takes maybe a year, year and a half to go through a probate system. So if you have children, please, please, please get an estate plan. If you own a piece of property, please get an estate plan. Even if you bought your first property and you say your debt, you have, you know, it's almost all debt, it doesn't matter. Get an estate plan because if something does happen to you, you cannot transfer property to other family members. Right? Unless you bought it with your spouse as a jo in as a joint tenancy, but you can't transfer it, so you need that. I will share with you that an estate plan doesn't have to be a trust either. It could be a will. Like I said, the durable power of attorney is basically a financial power of attorney that if you become incapacitated, you get hurt and you need somebody to make financial decisions for you while you're alive and you're going to be fine, but maybe right now you're going to be in the hospital for a month or two. They can't do that without that durable power of attorney or somebody making medical decisions for you. If something happens to you and you can't make those decisions yourself in the hospital, you need an advanced healthcare directive as well. So pretty much I will share with you that everybody needs it. The problem is that there's a lot of superstition around it. People think if they get an estate plan they think they're somehow going to die. There's a lot of misinformation and right now there's a lot of financial technology companies where if you search online for the really simple cases, you can do it online very, very inexpensive. You don't have to pay an attorney lots of money. Now if you've got children from other spouses and businesses and whatever, please don't do that. Hire an attorney who's going to do things for you because it gets a little bit more complicated. But I feel that almost everybody needs an estate plan. We got away from thinking that it's only for the rich. I think if you're going to go from generational poverty to generational wealth, you need to think about getting that dent as soon as possible. Talk to you soon and keep sending your questions. I appreciate you and please like and follow as we continue to grow our base. Thank you.
