The COVID pandemic has led to many changes in the economy which may have short- and long-term effects on your existing estate plan. If you have not revisited your plan in the past 3-5 years, now may be a good time to do so. Particularly with potentially large estates, this could be one of the best times in history to update your plan.
1. Estate Exemptions
Until the end of 2025, the federal estate tax exemptions are at all-time highs. If you anticipate your estate’s total net worth’s will exceed $10 million, you should evaluate how to use these exemptions.
2. Low interest rates
Federal interest rates continue to drop and remain at historic lows. If you have not already, the sale of closely held interests to an irrevocable grantor trust may be an effective estate planning tool for you. Sales to grantor trusts take advantage of the disconnect between income tax and transfer tax rules- giving you the ability to sell a property for gift tax purposes, but still own it for income tax purposes.
3. Low asset valuations
Most assets (property, stock, etc…) have significantly decreased in value in the past few. This is likely temporary. The equity markets are starting to rebound, and the real property market has shown signs of heating up. however economic data in the coming months will be very challenging. Now may be a great time for estate planning valuations.
Takeaway
These three conditions provide powerful wealth transfer opportunities for affluent families. Need to update or draft your estate plan? Contact CASHMAN LAW today for a free consultation to see how we might help you determine if your estate plan needs to be updated.
Thank you for taking the time to read our blog. If you would like to receive notice as each new blog article is posted, fill out the “Contact Us” form and indicate in the comments section that you would like to receive an email. You will not be contacted for any other purpose, unless you specifically request it.
The contents of this blog are intended to convey general information only and not to provide legal advice or opinions. The posting and viewing of the information on this blog should not be construed as, and should not be relied upon for, legal or tax advice in any particular circumstance or fact situation. While effort is taken to update the information presented, it may not reflect the most current legal developments. Please contact CASHMAN LAW FIRM LLLC (Hawai’i)/ CASHMAN LAW LC (California) to consult with an attorney for advice on specific legal issues.