Estate Planning During the Coronavirus Pandemic

On Behalf of | Mar 19, 2020 | Estate Planning, Financial Planning, Important Documents, Wills

Facing mortality and the difficult conversations that come with it are obstacles we deal with every day as we help our clients build their life plan. However, in this case, coronavirus presents a more imminent threat—one that can’t be swept under the rug.

“It’s a distinguishing feature,” said Suzanne Shier, chief tax strategist and tax counsel at Northern Trust Wealth Management. “People care about their wellbeing, that of their families and their communities. This is a correction, yes, but it has at its core a virus that affects people’s true well-being, not just financial. And I think that’s a different level of care or concern.”

First, and most importantly, you need to make sure you have, at a minimum, your basic documents in place.

(Read more about the 6 most important documents we all need HERE.)

These include your will, powers of attorney, beneficiary designations and health care proxies. These are necessary documents. If you don’t have them, or care for an older loved one who doesn’t have them, now is the time!

When it comes to your finances and savings, you might want to consider a few changes. Such as making an annual gift exclusion. You can make an annual tax-free gift of about $15,000 (indexed for inflation) that does not count against your lifetime gift tax exclusion. Using marketable securities as the gifted asset when volatility is high, and valuations are down, can offer some extra mileage on gifts made now as valuations recover in the future.

You might also want to consider Roth IRA rollovers. Because the “cost” of converting a traditional IRA into a Roth means paying taxes now on the current value of the IRA, it’s best to make these conversions when the market is down. Doing this will also insulate you from future tax redistribution, assuming tax rates going forward will be the same or higher.

Another consideration is moving assets into existing trusts or funding a new one. Similar to the annual gift, funding a trust with securities while valuations are low allows for more assets to be placed in the trust (when measured against the lifetime exclusion).

Regardless of your situation, it might be the perfect time to look over your documents and think about your financial investments.

We are here to help! We are available online, by phone, email or in personDon’t wait, call today. Your health and well being is our utmost concern.