As the COVID-19 pandemic changes financial and life circumstances, here are three estate and gift planning ideas that individuals might want to consider during these uncertain times.
1. Keep Current With Executive Orders and Legislative Action
Review executive orders executed in your home state. Given the fluidity of the COVID-19 situation, local government leaders have been providing relief for their citizens in strategic ways, such as relaxing requirements for executing certain estate planning documents and extending the deadline to file state and federal income tax returns as well as gift tax returns. It is important to understand and take advantage of any benefits these orders may provide.
2. Undertake an Estate Planning Document Check-Up
Given that our health is at the forefront of our minds these days and many of us find ourselves homebound, now is a good time to locate and review the “health” of your essential estate planning documents. Take a few minutes to go over your health care directive, power of attorney, will, revocable trust agreement and beneficiary designations.
As you review your documents, give special attention to the people whom you have named as your health care agent, agent or attorney-in-fact under your power of attorney, personal representative (executor), trustee and guardian for minor children.
3. Consider Tax Planning Strategies
Of course, we are all aware of the economic impact of the COVID-19 crisis. Interest rates have plummeted, portfolios have been adversely impacted and many closely held company valuations are being detrimentally affected. While this financial impact is distressing, it does present a number of opportunities from an estate and gift tax planning perspective. In addition to simply making gifts of assets at lower values, existing family loans might be refinanced to take advantage of lower interest rates, and transfers using GRATs and sales to “defective” grantor trusts are also worth considering.