2019 was like few others. A confluence of factors, created a planning opportunity to implement strategies that could pay off for years, even decades, to come. This may once again be the time to take action as market conditions and policy changes could be around the corner. Let us discuss several aspects of current events that provide potential planning opportunities. Politics aside, presidential elections involve potentially massive shifts in public policy. While one side is traditionally prone to raising taxes, there may be a bipartisan need to raise government revenue to pay for trillions of dollars in stimulus spending. Planning now for increased taxes could yield significant savings. This can be particularly true for estate taxes. Current estate tax and gift tax exemption limits are scheduled to sunset on December 31, 2025. Starting in 2026, the estate tax exemption limit will be reduced by roughly half. New election proposals have floated an even greater reduction in the exemption limit while raising the current estate tax rate. As rates start to fall, a planning opportunity to take advantage is essential Skyrocketing interest rates may be devastating the economy in terms of lost jobs, shuttered businesses, and depressed asset values. While the stock market seems to have recovered, many estate assets remain lower than their previous valuations. At some point, an economic rebound may be likely to happen. Gifting under-valued assets to future heirs, however, provides huge potential benefits. For tax purposes, gifts are valued on the date they are given. Thus, any future appreciation will escape normally associated tax. There may be ways to take advantage of current opportunities to benefit your estate and future heirs.
