Estate Planning Opportunities

{2 minutes to read}  Now that we are deep into the market correction from the coronavirus impact, we have some estate planning opportunities that I think are worth considering.

Estate planning in a low-interest-rate environment is a great opportunity for many people. In addition, we now have the ability to make larger gifts to children, and into trusts. The window on that will end December 31st, 2025, but right now we have a combination of a large lifetime exemption and a low-interest-rate environment.

It’s important for people to recognize that there are undeniable windows of time in which certain strategies work very well. One strategy is when interest rates are low, making gifts to children or loans to trusts to get them out of your estate becomes very attractive. If I lend $5 million at the current allowable rate, let’s say 2-3%, to a trust growing at 6-8%, it creates a very positive result for my estate plan.

Also, as the market has gone through a tremendous correction over the last couple of weeks with the coronavirus issue, a lot of our assets have a lower valuation. Making gifts of those assets makes sense since in the future, there will most likely be tremendous growth, because after every market decline there is usually a significant market rebound. The combination of the larger lifetime exemption, the low-interest-rate environment, and this downmarket provides a confluence of circumstances that allow us to create some very good estate planning opportunities.

So with that in mind, I urge everybody to take advantage of this window in time and do the planning to secure and protect your wealth. If you have any questions or would like any additional information, please give us a call 516-682-3336 or send an email to michael@swanwealth.com.

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