Suze Orman—How to Create a Financial Roadmap for a Lasting Legacy

Celeste Headlee:
Okay. Let me ask you now why this topic? At a time when there is so much going on in people’s lives why focus on their end of life documents?

Suze Orman:
So, what’s interesting is that the end of life documents are there for when your life ends but here’s the problem, you don’t know when that moment is going to be. You do not know when the moment that you’re going to become incapacitated, you’re going to become ill, you’re going to need help. You don’t know when that moment is going to be as I just said a few seconds ago. And think about what’s happened over this past year, how many people, young, old, all kinds of ages found themselves in a hospital setting that their loved ones couldn’t even visit them. There was nothing they could do. And so, it’s really important that you have documents in place today to protect the unknowns of your tomorrows. It’s really just that simple.

Celeste Headlee:
So, your book is the Ultimate Retirement Guide for 50 Plus. What is the right age to start this process?

Suze Orman:
Truthfully the right age is to start this process in your twenties. Because when you start this process in your twenties the sooner you start the more money you’ll have in the end because of compounding. But the problem is today most people don’t start in their twenties or their thirties or their forties because they’re still just getting out of debt, student loan debt. They’re trying to buy a home. They’re trying to buy a car. And they don’t take it seriously because they don’t think they’re ever going to get older. So, really the time you have to start by is your fifties and up because if you don’t start then good luck. You may never get to the end result that you want to attain.

Celeste Headlee:
There may be a sense also that they don’t have anything to leave. And I wonder at this moment when so many people are unemployed, so many people are struggling financially, they may be putting off these conversations because they feel that there’s nothing for them to leave for their inheritors. What would you say to someone who says, “Well, nobody’s going to inherit anything from me.”

Suze Orman:
I’d say what you need to think about is a man by the name of Bill Summerlin. And you may say, “Who’s Bill Summerlin?” And Bill Summerlin is a man that for 40 years worked at the Boca Resort Hotel in Boca Raton, Florida arranging the most incredible floral arrangements you’d ever want to see for everybody. And Bill was found on his floor in his apartment after three days of being there by the EMTs and taken to the hospital. Nobody knew who to contact, nobody knew what his wishes were, nobody knew anything about him and the hospital went into a total frenzy. Somehow they contacted a friend of mine and found out who his sisters were, everything about him that they needed to know to contact people. But here’s the end result, in 10 days after that he died.

Suze Orman:
All right. But now his family members can not have his utilities disconnected, they cannot stop his rent, they cannot touch any money that he had in his bank account. They can’t make any decisions for him whatsoever because they did not have a power of finances or a durable power of attorney for healthcare or any of the things that one needs. So, this isn’t just about, the must have documents is not just about where does everything go after you have died. All right so you don’t have anything but do you understand that maybe you have a little money in a retirement account, maybe you have money somewhere that somebody has to make decisions over and if you don’t have documents in place there’s no way they’re going to be able to help you in your life and after your death. It’s really become the most chaotic mess I have ever seen in almost the 40 years that I’ve been doing this.

Celeste Headlee:
And you say in your book that people never ask you about this. Of all the questions that you get asked it’s never about this, why do you think that is?

Suze Orman:
People don’t want to deal with the what ifs of life. Especially men, they don’t want to think that they’re ever going to get older, they’re ever going to be incapacitated. Nobody wants to believe that they’re the ones that are going to get sick, they’re going to end up in a hospital. But they have to think that way. It’s so incredibly simple I can’t even tell you especially since I’ve created what’s called the must have documents that can be purchased for $69. Are you kidding me? $2,500 of state-of-the-art documents can be purchased via my Women and Money app. But that’s besides the point. What’s really important is that you take the steps today to protect your tomorrow because if you don’t you will be making out of any other financial mistake you could ever make that will be the biggest mistake you will ever make.

Celeste Headlee:
So Suze, this entire process for most people will have to start with a conversation because your four must have documents, the will, the living revocable trust, the advanced directive, the power of attorney, all of those require you to choose people to do certain things for you. And that means you’re going to have to talk to people about this. And I feel like it’s that conversation, that very first step that prevents them from moving forward. How do you get past the fear of that conversation?

Suze Orman:
The truth of the matter is fear is the main internal obstacle to wealth in every single circumstance, every one. And so, one of the ways that you get rid of fear is through action. It’s actually the only way that you can conquer your fear. And so, you have to have that conversation because if you don’t, do you understand that the state that you live in will make those decisions for you if you have not made them yourself? So back to Bill Summerlin, he doesn’t have a will, he doesn’t have a trust, he didn’t have designated beneficiaries. So now, the state of Florida is going to designate who gets his money and maybe it’s going to go to somebody that he didn’t want it to go to.

Suze Orman:
You’re a parent and you have a child and you don’t want to have the discussion of who takes care of your minor child if in fact something happens to you. If you don’t have a will where you appoint a guardian guess what? The courts will appoint a guardian for you. Next, you have a child that is 18 years of age or older and now they end up in the hospital totally sick and you think you can make decisions for them. Once a child turns the age of 18 you can no longer have any legal authority over them. So, if they don’t have an advanced directive and a durable power of attorney for healthcare that they in fact give to you, you can’t help a child.

Suze Orman:
So fine, you don’t want to have those conversations? Are you kidding me? The most important people and assets in your life aren’t they your family members, aren’t they your children, aren’t they the ones that you love? So whether you have money, you don’t have money, everything that you do in life will have an effect on those that you love if you don’t take care of certain situations. That’s why it’s not just you only need a will, you only need a trust. It’s you need a will, a trust, an advanced directive and a durable power of attorney for healthcare. You need those four must have documents because those four must have documents will take care of you in every possible situation of the unknown.

Celeste Headlee:
Let me ask you about the things people forget and I volunteer for animal charities and one of the staff members at a shelter was saying that people forget to determine who’s going to take care of their pets. They end up with a lot of pets. And I wonder what in your experience do people forget as they’re planning for end of life? What are the details that often get left out?

Suze Orman:
The details that normally get left out are little things believe it or not such as where do your pets go? Are you going to leave money to take care of your pets? But it’s not just your pets, it’s all the little things around your home that might be precious to you. Maybe it’s the dishes that your mother left you and you want to leave to a niece, maybe it’s a little piece of jewelry that you’ve had with you forever that you want a special cousin to have. Because if you don’t, don’t really pay attention to those things, things that you would really want to have happen aren’t going to happen. But it’s more than just the things it’s do you want to be resuscitated, do you not? All kinds of things. Do you want to be cremated, do you not? Those are the things that you really have to deal with while you can.

Celeste Headlee:
So, you talk about in the book choosing your advocate and I wonder if you’ll explain first of all what you mean and how one goes about choosing that person?

Suze Orman:
Yeah. A durable power of attorney for healthcare is who is going to advocate for you or make decisions for you when you cannot. Go back to Bill Summerlin again. He was found on the floor unresponsive. He was brought to the hospital and put on life support because they didn’t know what else to do, there were no instructions. Finally, like I told you previously, family members came and they had to make a decision. Would he be taken off, would he not? But that wasn’t easy because they didn’t have a durable power of attorney for healthcare.

Suze Orman:
So, after 10 days he was failing himself and so what was interesting is that if you had a durable power of attorney for healthcare, you had an advocate that person has to have the strength to make the decision, “Yes, take that person off life support.” That is not an easy decision. Because there are some people that are out there that’ll be, “No, no, don’t do that. Let’s just see maybe he or she will come back.” So you have to know that that is a person that wants that responsibility number one and number two will carry out your wishes. That if you don’t want to be resuscitated, you don’t want to spend your life on life support. So it’s a really important person in your last wishes documents.

Celeste Headlee:
So another thing that you talked about is the emotional weight that occurs when people have to be making decisions for someone else, the burden of just having to think about these things in the moment and that has to be even heavier right now. I mean, people are stressed out not just financially but in many different ways. People are perhaps not in their best frame of mind anyway. Is this even at this moment a good time to be making these decisions, at this stressful moment?

Suze Orman:
Listen, when these decisions need to be made they have to be made. You cannot have the luxury of saying, “I’m going to wait until I feel better and everything passes to make a decision,” when somebody may be in the hospital and that decision needs to be made right here and right now. So, it’s always a good time. There’s never really a bad time because you have to do what you have to do. Do you understand? So, and it’s all kinds of things, remember it’s not just about health it’s also about wealth. Those two entities come into place so closely all the time. And so, it’s really something you have to do.

Suze Orman:
Listen, I’ve been doing this now for almost 40 years and I’ve been through September 11th, I’ve been through events where thousands of people have died. And when you don’t have these documents, all of them, the pain that you would have gone through in your mind to create them is nothing compared to the pain that you and possibly your loved ones are absolutely going to go through if you don’t have them.

Celeste Headlee:
You went through this with your mom, it’s something that you talk about. From where I’m sitting, I would imagine, “Hey, this must have gone perfectly smoothly and easily for Suze Orman because she knows exactly how to do this.” How did that conversation go?

Suze Orman:
The main problem that I had with my mother in terms of documents was not the trust and all those documents, she did that. But the truth of the matter is, she had absolutely nothing. The main reason that I did those documents for her was to allow me, because in good documents you have an incapacity clause, to allow me when my mother could no longer make financial decisions for her self to access her social security, to do little things like that for her to terminate the place that she was living in when she died. I needed those rights otherwise I couldn’t have done it.

Suze Orman:
The problem was with long-term care insurance. After my father died, he was 71 when he died, back in 1981 I asked my mother to please get a long-term care insurance policy and she kept saying, “I don’t need it. I’m never going to need long-term care.” And I said, “Mom, I’ll pay for it for you. It’s not a big deal.” Seven times I applied and seven times she refused to sign the documents to get long-term care insurance. All right my mother now goes from 66, which is how old she was when my dad died, to 76 to 86.

So here she is in her late eighties, early nineties, moves to Florida to be in an independent living facility under the conditions that I moved here as well which I did. And now she’s in there, everything’s okay, and as she’s getting older she’s getting more frail. Before you know it she needs full time care. Now, thank God Suze Orman was her daughter because that cost me $20 to $30,000 a month every single month for almost seven and a half years.

Suze Orman:
My aunt and uncle on the other hand, listen to me they got a long-term care insurance policy, had the same care that she had, but guess what? It did not cost them that. So, that was the problem that I had with my mother. So, for those who can afford it, for those where it makes sense, and it is not everybody. Everybody needs must have documents, not everybody can afford long-term care insurance but I talk about that in great detail in the Ultimate Retirement Guide for 50 Plus. Again, this is a fascinating book and very different advice that I have ever given before it in any other book that I have written. And the reason for that is I knew these times were going to be different.

Suze Orman:
I knew that we were going to be facing new financial challenges that we had never faced before. I wrote this book at the end of 2019. I already knew that something was going to happen in 2020. If you listen to my March 1st, 2020 podcast this year in 2020, I do a recap of everything that I said in 2019. The four shows starting in July that I said, “Beware of February, 2020.” I said it four times, the last time in December of 2019. So I only say that because as this book was written knowing that we were going to have a really rough time starting in 2020.

Suze Orman:
So, I give advice in this book that I’ve never given before and the conversations and why you have to downsize sooner than later and all of these things. So out of all the books that I’ve written, and this now really is my 10th consecutive New York Times bestseller, this may be the most important book I’ve ever written. And that is because as people tend to get older nobody targets anything towards them. I’m now 69 years of age and you only matter to the advertisers and to everybody if you’re 25 to 54. Once you’ve entered your fifties they don’t care about you anymore. Nothing’s targeted towards you.

Suze Orman:
And it’s very different writing and talking about retirement when you are 69 than when you’re 45. Because it’s not just about what you do with money it’s about what do you do with the identity of who you are? What do you do with that when you no longer can define yourself by what you have, your job title, all of these things? What do you do with the hours of a day that make your life fulfilled? And so, now I’m able to write and talk about this from a perspective of somebody who is 69 who did retire for two years before all this craziness started. And it was almost like a demand, “You’ve got to come back Suze Orman. There’s only one Suze Orman.” And so, that’s what makes this book so incredibly important.

Celeste Headlee:
My last question for you is that this could be our new normal for a while. I just spoke with a virologist yesterday who said we could be wearing masks for two years. I wonder what you see that may be not changing as we go forward. What has changed do you think especially financially that will not go back?

Suze Orman:
Yeah, I think here’s the biggest thing financially is that we still have maybe 20 some odd million people on unemployment and it’s really probable that 40% of those people are never going to go back to the job that they had. And I think the most dangerous thing that has happened from this is that major corporations have realized that they can make as much money automating everything or having people work at home that they could when they had all these people coming into these massive offices, all the expenses, all the bills that it takes to run that type of entity. So with that comes why pay somebody $100,000 a year to sit at home to do a job when probably somebody from a foreign country can do the exact same job equally as well for $40,000 a year? Because it doesn’t matter where those people are.

Suze Orman:
The next thing is robotics. Don’t think that one day you’re not going to drive into a McDonald’s or a Wendy’s or a Taco Bell and what you’re really going to see is no people on any level. You’ll order from your app, you’ll pay on your app, you’ll drive up to a window, it will be there. Behind the screen will be all of these robots automating everything. They don’t have to worry about COVID, they don’t have to worry about health insurance, they don’t have to worry about 401k plans. So, don’t think that this world because of this now with artificial intelligence, robotics, automation, everything, is not going to totally change.

Suze Orman:
So with that said, if you currently have a job, if you’re currently making money, interest rates are low, do not make a mistake of, “Oh, I’m fine. Everything is okay. I’m going to buy a bigger house because interest rates are at 2%.” Actually they’re at 2.37% just to be exact. But don’t make those mistakes. This is the time when you do have a job that you should be saving all the money you possibly can. You should make sure that you’re totally out of debt. You should absolutely make sure you have an eight month emergency fund. And again, you should make sure that your documents are in order and everything is going the way that it should. Because the future is going to be very, very different financially speaking than we’ve ever seen before.

Celeste Headlee:
Suze Orman, thank you so much for your time.

Suze Orman:
You are welcome.