A 2020 Estate Planning Reader

Amid a Global Pandemic, It's Easy to Lose Track of Some Big Things That are Going On

COVID-19 Coverage Planning & Strategy Taxes

In the depths of the stock market pullback, we wrote about the opportunity to take advantage of depressed share values.  When the Applicable Federal Rate fell to historic lows, we wrote about the “double opportunity” afforded by low values coupled with low interest rates.

Which leads us to last week.  During our webinar on the estate planning opportunities in the current environment, fellow panelist Brook Lester reminded us that – in addition to all the other fun stuff going on in 2020 – there’s a presidential election in November.

We possess no political clairvoyance.  However, if a Biden administration were to assume power in January 2021, we know that adverse changes to the current estate tax regime would be likely.  As November draws near, advisors are urging family shareholders to mitigate the political risk by implementing significant transactions now.

In this week’s post, we have assembled some helpful resources we have come across that provide helpful insight on the estate planning opportunities and strategies available to family business owners during 2020.

  • Written in a pre-COVID world, the 2020 Wealth Planning Outlook from Northern Trust still offers valuable perspective for family business leaders.

  • Published in June 2020, this whitepaper from our friends at Diversified Trust provides timely insights for family shareholders evaluating their planning needs in the wake of COVID-19.

  • This article sheds some light on how wealthy families are pursuing estate planning goals with renewed vigor under the shadow of COVID-19.

  • Attorney and Forbes.com columnist Matthew Erskine offers a compelling case for using one’s unified credit sooner rather than later.

  • Finally, this article from CNBC’s website digs deeper into the Biden campaign’s tax proposals, including the elimination of the “step-up” in basis currently available to heirs.

It is generally a bad idea to let the tax tail wag the dog.  However, the combination of depressed asset values, low interest rates, and political risk means that family shareholders should accelerate work on the business and family issues that pave the way for effective estate planning.  If your family has avoided having those conversations, it’s not too late, but the time to start really is now.  A well-reasoned and supported business valuation is fundamental to any estate planning strategy.  Call one of our professionals today to started on a valuation of your family business.