Your estate can benefit from a refresh every now and then. And that includes how you manage your portfolio in a down market. Stocks are declining as worries about tariffs and a potential recession loom large. But for those with an estate they want to pass on to heirs, the declines can spell opportunity.
The article from Kiplinger discusses how a downturn in the market can actually benefit estate planning. When asset values decrease, the taxable value of an estate also decreases, potentially reducing estate taxes. This scenario allows for several strategic moves: individuals can gift assets at a lower value, which could appreciate over time, thus transferring wealth out of their estate at a lower tax cost. Additionally, lower asset values can make it an opportune time to fund trusts or make charitable donations, as the same amount of money can buy more shares or property. The article also suggests that this could be a good time to review and possibly adjust estate plans, taking advantage of lower valuations to minimize future tax liabilities. It emphasizes the importance of understanding how market conditions can influence estate planning strategies, particularly in terms of gifting, trust funding, and tax planning.
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