With the stock market significantly done from its all time high, many people are putting of doing their estate planning. So the question is, is now a good time to engage in estate planning transactions?
First, if you don’t have a will or other testamentary documents, then when you die, all of your property that is not jointly owned passess by what’s known as intestacy. That means the State decides based on a pretermined formula where your property goes, and not you.
Wealthier individuals probably already have their estate planning documents in place (I hope). But now, with a depressed economy and a down market, now is a great time to look into transerring assets to the next generation.
One thing you can do is make what’s known as annual exclusion gifts. The annual exclusion this year is $13,000. That means you can give $13,000 to as many people as you want, tax free. If you are married, you can give $26,000 to each of your children, their spouses, your grandchildren, etc. Most importantly, it doesn’t have to be cash. You can give stock in companies that have declined in value but are still good solid companies. That way, you not only remove the asset from your estate, but all of the future appreciation.