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What the Coronavirus Economic Panic Means for Your Estate Plan


Even if you are an expert at avoiding media hype, you can’t avoid noticing that the novel coronavirus, COVID-19 has almost everyone worried, even though only a few cases have been reported in the United States.  In crowded places like malls and Metro stations, you probably see more people wearing surgical masks than you would expect to see anywhere outside a healthcare setting.  Banks and office buildings have installed hand sanitizer dispensers near elevators and high-traffic door knobs.  Even if you haven’t read the news stories from the last few days that envision what it would be like if major American cities were to go under quarantine to curb the spread of the virus, you have probably noticed that this is bigger than the average clickbait campaign targeting worry warts with itchy clicker fingers.  Stock prices have been in free fall for the last few days, which means that if you have a lot of investments in the stock market, it is a good idea to have a serious conversation with your estate planning lawyer as well as your financial planner in the near future.

Keeping Calm in a Mass Panic

If you have an estate plan, it means that you have already thought calmly about the future.  Perhaps you have placed your assets in a trust so that your heirs will be able to receive them sooner and at a lower cost than if they had to go through probate.  Those assets might include investments that can gain or lose value according to the fluctuations of the stock market, but long-term investments tend to be low-risk.  Even so, if the stock market keeps dropping at such an alarming rate, it can affect even the safest investments.  Market Watch warns against rushing to sell your shares before they have a chance to lose more value; it will only stress you out.

Market fluctuations are outside your control, so even if your investments lose value as a result of fears over the coronavirus epidemic, focus on the other ways you can provide stability for your family.  The safest way to ensure that your wealth will benefit your descendants is to give them parts of their inheritance while you are alive.  The annual gift tax exclusion allows you to give $15,000 to each of your family members in 2020 without anyone paying taxes on the money.  You can’t control what $15,000 will be able to buy when your grandchildren reach middle age, but you do know what it can buy today, and everyone wins if you get to see your children and grandchildren spend the money on something they need or save it for the future.

People often invest in real estate as a low-risk alternative when the stock market makes them worry, but everyone old enough to remember 2008 knows that it is possible to lose money on real estate investments, too.  If you own real estate properties that your family will want to live in, rather than just wanting them as investments, consider making the deeds to those properties transferable on death to those family members.

Let Us Help You Today

One of the main goals of estate planning is to help your descendants weather economic reversals of fortune.  Contact the Washington DC estate planning lawyers at Tobin O’Connor Concino P.C. for help today.




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