The pandemic has impacted more than just the healthcare industry and unemployment rates, it has also heavily affected the United States economy. Investors are seeing record-setting fluctuations in marketable security values as a result of COVID-19, and all sectors are experiencing a suppression in asset values.
These wavering market trends can be tempting, but anyone who makes an impulsive decision to capitalize on these fluctuations could end up hurting their investments or personal finance goals. However, these market swings do present a unique opportunity for estate planning with careful preparation.
The COVID-19 pandemic has shown exactly why personal planning is so important. Unprecedented times come without warning, giving you little time to protect yourself from the unexpected consequences. Choose to be proactive instead of reactive. When was the last time you had your estate planning documents updated? If it has been a while, these documents might not accurately reflect your goals, or they may contain out-of-date information.
In addition to adequately protecting yourself against uncertainty, the historically low interest rates and reduced asset values provides you with an opportunity to engage in low-cost wealth transfers. Any gifts of assets that have dropped in value can leverage the lifetime federal gift tax exemption and exclusion amounts that are already available under our current law.
Married couples can take advantage of these tax exemptions if each spouse creates a trust that includes a lifetime interest in that trust for the other spouse. Similarly, individuals can now gift assets to their children and pay less gift tax in order to do so.
The pandemic has been a unique opportunity to plan ahead, but that planning must also be accompanied by the right support system. However you choose to benefit from the situation, you need to work with a reputable appraisal firm or else your efforts will be in vain.
There has been an estimated $10 trillion that has begun changing hands from one generation to the next. Estate planning provides a lasting legacy for descendants, so make sure you are protecting that legacy by working with certified valuation experts that will make sure your information is correct and up-to-date. If you want to take advantage of estate planning in the midst of the coronavirus pandemic, contact our team today and we will walk you through the process so that everything is in order.