The Dow Jones recently saw a substantial plunge fueled by the spread of the coronavirus, or COVID-19. Estate planning, however, is as important as ever during such uncomfortable times. Rather than focus on the next few months or year, it is best to engage in long-term estate planning to make the most out of your estate plan. To help you prepare your estate plan during the Coronavirus, this article reviews some helpful estate planning strategies that can prove advantageous. 

Review Your Estate Planning Documents

During uncertain times, there are various events like births, deaths, marriages, serious illness, and incapacity that can end up impacting the terms of your estate planning documents. While your intentions might change as the result of life events, you should still make sure that your estate planning documents are adequately updated. As a result, in light of these various changes, you should make sure to adequately review your estate plan and make any necessary changes. 

Utilizing Favorable Exclusion Amounts

The federal exclusion amount for each person in this country is allowed to exclude up to $11,580,000. Gifts over this limit are taxed at the rate of 40%. Under current law, these amounts will return to a much lower rate of $5,850,000 after December 31, 2015. There is also a possibility that Congress might decide to reduce or increase this threshold before 2026. 

With these limitations in mind, it is a good idea to engage in estate planning now to pass on assets to a loved one. While it is uncertain if exemptions will continue to remain this low in the future, recent changes in the stock market might also create a chance to make lower value transfers now that increase in later years. Consequently, assets that are passed on to loved ones now are at an increased risk of future appreciation. 

Also Take Advantage of the Annual Exclusion Amount

Besides the exclusion amount, during uncertain times it is also a good idea to remember that the gift tax annual exclusion amount is $15,000 for each recipient. This means that a person could distribute gifts to an infinite amount of individuals up to $15,000 without facing tax repercussions. This amount offers an excellent way to make tax-free gifts to the younger generation or loved ones.

Remember Interest Rates are at an All-Time Low

Interest rates for some types of estate planning transfers have reached an all-time low. These rates are favorable to people who engage in certain types of estate planning methods like grantor retained annuity trusts, intra-family loans, and sales to grantor trusts. If you are considering making any of these types of estate planning strategies, now is the time to do so.

Speak with an Experienced Estate Planning Lawyer

While the country is currently in an uncertain state, now is the time to take advantage of some powerful estate planning strategies. If you need the assistance of an experienced estate planning attorney, do not hesitate to contact attorney Jim A Lyon today to schedule a free case evaluation.