Managing assets and finances always requires a degree of foresight which, most of the time,
is hampered by invariable uncertainty. This uncertainty is amplified during periods of market
volatility such as those we are experiencing now. The lingering effects of the Covid
pandemic and subsequent lockdowns, rising interest rates, inflation, and the war in Ukraine
have all contributed to a turbulent contemporary market. Here are some tips for you and your family on how to regain some control when estate planning during periods of economic
uncertainty.
Wealth Transfer Strategies
There are a number of ways to hedge your bets with your assets in order to safely see out
the economic turbulence. Qualified Personal Residence Trusts (or QPRTs) allow you to gift a
property into a trust that will benefit your family at a reduced tax cost while retaining your
right to live there for a prearranged period of years. An alternative to this would be
investment in a Charitable Remainder Unitrust (or CRUT). These are types of irrevocable
trusts that provide the beneficiaries with annual contributions for a term before the remaining sum is donated to a charity of the holder’s choice. As a result, you are entitled to charitable income tax deduction. Moreover, depending on the structure, value, and remainder of the CRUT, transferred assets may also be exempt from capital gains tax.
Monitor, Monitor, Monitor
Keeping an eye on your portfolio and evaluating frequently is a practice that should be
undertaken at all times. During periods of economic turbulence, it is even more crucial. Take
careful note of how assets such as real estate and cash have fluctuated in value since the
last time you checked. Don’t forget to monitor externally, too. Keep watch on tax thresholds
as they will change periodically to accommodate inflation. Putting real estate in an
irrevocable trust may be beneficial to prevent your taxable estate from increasing.
The steps above are insights provided by the advisors at The Calder Group. To begin
protecting your future with us, use the contact form below.