Estate Planning Opportunities During a Bad Market

Each passing day can be more stressful than the last. As these uncertain times continue to progress, we continue to dream of the days past where the future and our estates were more concrete. While we continue to adapt our social lives to the coming changes, what about your financial stability? Perhaps you wrote your will before these changes happened, or were in the process of developing your estate plan. Due to the unforeseen circumstances, you may be struggling to manage your financial accounts, and estate planning may no longer seem doable. But even in the darkest times, there is a light at the end of the tunnel.

Opportunities to Create a Brighter Future

With the stock marketing being so volatile, now is a great time to find opportunities to protect your estate and secure it in ways you wouldn’t have needed to in normal circumstances.

Opportunities to consider:

  • Investments
  • Gifting Property

Safeguarding Investments

We may not like this term as it paints the image of someone drastically flailing about trying to grasp their bearings, but this is a time of crisis management when it comes to stocks and investments that make up part of your estate. Developing a plan and being prepared is better than braving the storm without any kind of safety net. 

Now is the time to look into making changes and review the hard-earned financial security that you want to provide to your heirs. Wanting to save as much as possible so you can be assured that your family is taken care of, is understandable. 

We have your best interests in mind as well, and that is why we believe that, while the markets are down, this might be an excellent opportunity to convert standard IRAs into Roth IRAs. Typically, when it comes to investments, you want to avoid those pesky taxes so you can avoid paying more before you have to. But since markets are down, so are tax rates, making the conversion a smaller barrier of entry and allowing you to save significantly more in the long run, to hand down to your family. The way Roth IRAs work is that you pay taxes now, so, in the future, you have a more substantial tax savings than with a standard IRA. Put into simpler terms, pay more now, but save even more down the road. If you don’t already work with a financial advisor, we would be happy to make an introduction to a professional who could walk you through this process and determine if this would be the best strategy for you.

Gifting Property

In some cases, you don’t always have to wait to pass parts of your estate off to family or loved ones. During these times, playing the longer game will yield greater rewards down the road, and gifting parts of your estate now can be seen as a win-win for you and your family. Each year, you can gift $14,000 worth of your estate ($28,000 if married) to family or loved ones to give them peace of mind and reduce your estate tax by reducing your estate’s overall size.

Planning for a Better Future

There are many other opportunities you can take advantage of to turn this bad market into one that benefits you and your family. Our initiative is family first, and we will be there for you now in your estate planning process, and as your family’s unique situation changes. 

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