Sound estate planning means ensuring that your family is provided for, whatever happens to us in the immediate future.
Planning your estate as efficiently and effectively as possible is complicated with the COVID-19 pandemic giving us additional anxiety.
Here are some ways we can effectively plan for our estate in this time of the pandemic:
- Consider marketable securities. Remember that during this pandemic and other large-scale global events, markets today are extremely volatile and low. In a way, now might not be a great time for investments due to the risk of not being able to maximize ROIs. However, this dip related to the pandemic can give an opening to transform marketable securities as gifts. For as long as you, the gift-giver, stays below your exemption, you can low-value assets as gifted marketable securities for free. Moreover, if you use less of your exemption amounts, you get more allowance for your future gifts. As an advantage, by the time markets recover, gift-givers such as yourself can now maximize ROIs in these gifts.
- Consider intra-family loans. If you made a loan towards family members or towards a trust for the benefit of family members, these loans can be created into a gift provided the loan falls on a below-market interest rate. In short, for as long as this loan has an interest that falls on the Applicable Federal Rate, you may have this loan not treated as a gift. In turn, you can give a loan to a grandchild or a child and have a paying interest that won’t incur the usage of gift tax exclusion, or without the need to pay any form of gift tax. And then, the borrower can use this loan you’ve lent them for investments, potentially earning them a lot of ROI in the process.
- Consider creating business interests with your family. Aside from marketable securities, business holdings and business interests may receive an opening in terms of their potential contributions to an estate. Instead of giving a gift, you might want to consider creating a business entity with family entity interests. In turn, you can use lower asset values to create a limited partnership or limited liability company in the form of a
- Consider charitable gifts to maximize the current situation. Given how today’s economy has created increased unemployment and a public health crisis, perhaps charitable gifts of cash or assets might help reduce your taxable estate. Moreover, doing this can help you receive the benefits of a charitable income tax deduction. Prior to the global health situation, there has been a decrease in the availability of itemized deductions while there’s an increase in standard income tax deductions. In turn, more people began “bundling” charitable gifts much faster compared to a time that would almost take these multiple years just to get to a more desirable result.
- Hire professionals to ensure efficient spending. Another important consideration when it comes to estate planning has to come from the “planning” stage itself. If we want to use our spending for our estate more efficiently, it helps to hire professionals such as lawyers for our estate planning, and teams such as NYC movers to facilitate any estate plans that involve moving houses or moving properties. That way, you have the assurance that only trained professionals with the right skillset are handling the finer things involved in your estate planning at large. Thanks to their help, you can at least have the guarantee that the professional end of your estate planning needs can be met with the right kind of approach and the right kind of skill set.
Estate Planning In COVID-19: Make It Possible
With the above tips in mind, it’s important to remember that estate planning in COVID-19 is perfectly possible if we look in the right direction. Moreover, it’s a good thing to learn that the pandemic can actually open better opportunities for us to plan our estate, especially if we use these opportunities efficiently and effectively. Remember, it’s perfectly possible to plan our estate in the time of COVID-19, provided we carefully take into account the methods as explained above and how we can best take advantage of these opportunities.