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Has COVID-19 Triggered More Estate Planning Conversations?

One silver lining of our current crisis is that it’s bringing our attention back to some important areas of life, and conversations around estate planning are crucial. Cheri Dorsey explains why.

Transcript

Tim Maurer
Hello, Tim Maurer back with another episode of Ask Buckingham, a new video podcast designed to bring clarity in the midst of confusion by connecting your great personal finance questions with straightforward answers from industry thought leaders. Today’s question will be answered by Cheri Dorsey, an estates and trusts attorney at the firm she co-founded, Sessa & Dorsey. And Cheri, one of the silver linings of our current crisis is that it’s bringing our attention back to some of the most important areas of life. And in the realm of financial planning, there may be no more important area than estate planning. Are you finding that people are more interested in having these discussions with you today?

Cheri Dorsey
Yeah, absolutely, Tim. I think that there’s been just a global pause and it’s provided people with a chance to think about some of these difficult issues. You see the headlines and so people are starting to realize their mortality. Unfortunately, they might know friends or family members who have struggled with the coronavirus and having some time at home with their loved ones, I think has allowed people to start thinking about these issues that they normally don’t want to slow down and take the time to think about.

Tim Maurer
Sure. And Cheri, I’m curious why do you think people in general tend to avoid estate planning? They might avoid sending you an email and picking up the phone to talk about this topic in which you have so much expertise.

Cheri Dorsey
Yeah, that’s a very interesting question. And I think there’s a large part of that is a psychological hurdle to get over it, to think about. We all are mortal. We all are going to have to face that question and that difficult time at some point. Are people worried that if they start planning for death, they’re suddenly going to get a terminal illness? Maybe there’s a little bit of that to it. I think we all think we’re going to live a normal life expectancy. And so, a 30 year old, a 40 year old, even a 50 or 60 year old thinks that they still have plenty of time. Unfortunately, what we try to tell our clients is we certainly hope that’s the case, but our job is to really help to plan for the unfortunate untimely death. What if something happened to you suddenly unexpectedly? What would that look like for your family?

Tim Maurer
Sure. So then what are the primary steps that you recommend people take? Or practically speaking, what are the three primary documents that everybody should be thinking about in estate planning?

Cheri Dorsey
Well, certainly, we think the basic foundational documents, as I call them, would really be first, a last will and testament or revocable trust, depending on which approach the client decides to take as their principle of dispositive instruments. So the document that’s going to dispose of their assets. And then we also want to make sure that the client has a financial power of attorney and then a medical power of attorney that usually also includes a living will section where they can express their wishes in the time of some kind of end of life situation.

Tim Maurer
Sure. And do estate planning attorneys have a tendency to package these into one particular engagement that they might have with a client?

Cheri Dorsey
Absolutely. When I’m getting a new client and I first sit down with them, those are the three primary documents that I think every client should have. The will of course, is to prepare for when you pass away, powers of attorney documents are while you’re alive, if you need someone to help with your financial matters or your medical matters. Actually, those documents can sometimes be as important as the will because the likelihood that you’ll become disabled at one time or another is much higher. Death is one time, disability can happen throughout your lifetime. But yes, typically, we say, those are the three documents. You’re a new client, you must have those foundational documents in place. And we really do that as a package. Correct.

Tim Maurer
Sure. And these days, Cheri, everything is online, right? Even before the current crisis that we’re in and maybe especially now. So when folks go to Google estate planning documents, one of the first things they might find are several different opportunities to do that for something that might look free or very inexpensive with an online questionnaire of sorts. My preference as an advisor has always been to send clients to specialists like you so that people can engage in a very human conversation with another human. But do you agree with that? Do you find that you would point people in the direction of an online estate planning document creator?

Cheri Dorsey
Oh, absolutely not. I would definitely not send my client that direction. And it’s really not self-preservation for my own profession.

Tim Maurer
You’re right.

Cheri Dorsey
It’s really because those forms are forms, right? They’re online documents that are created for the general population. First of all, most of the time, my clients do not fit into a perfect little box. There are unique situations, whether it be a second marriage, a disabled child, out of state property. There are a lot of things that these forms online don’t take into account. Similarly, I worry about whether those documents are really up to date and are in line with the current state where the person resides. So for instance, my law firm, we are licensed in the State of Maryland and all of our documents we know are acceptable under the laws of Maryland. If you are a resident of a different state, you certainly don’t want to just go on to a website and accidentally pick or have a form from a state where you don’t even reside. So you should always go to the experts. These things are so important and it really makes sense to just make sure it’s done properly.

Tim Maurer
Yeah. Well, I appreciate you acknowledging there is a tinge of self interest in that answer. Like Warren Buffett said, you never ask a barber if you need a haircut. But at the same time, the point you make is so good, that our lives can’t really fit into an online questionnaire. It needs to be a dynamic conversation. Something certainly better than nothing, right? But we would certainly appreciate having the opportunity to have a discussion about this and make the best decisions going forward.

Tim Maurer
Cheri, thank you so much. And thank you for tuning into this episode of Ask Buckingham. If you have a question that you’d like to see us address, you can do so by navigating to the website, askbuckingham.com, or by emailing your question to question@askbuckingham.com, or just click in the upper corner of the screen. It’ll take you directly to the website. Remember that there are no dumb questions, but unfortunately, there are plenty of poor answers out there. Our hope is that in giving you straight answers to your questions, it will bring a sense of calm and allow you to apply what you’ve learned in pursuit of good decision making. So please follow us. And by all means, Ask Buckingham.

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