This coronavirus is certainly an ill wind and we are all doing our best to cope. We also remember the saying that, “It is an ill wind that blows no good.”
So what is the planning one could accomplish?
There is no better time to make a gift than when the value of an asset is low, if you have confidence that the value will grow. We are lawyers, not investment advisors, but we listen to the investment advisors, all of whom say confidently that the stock market values will not stay low forever. So if you can afford to do so, and do so without worrying about your own ability to enjoy life as you are accustomed to doing, then consider gifting. Gifts to your children and grandchildren could move a great deal of value out of your estate today that would have utilized far more of your lifetime giving opportunity than a few weeks ago. Think about giving say 1,000 shares of IBM stock today. The value of that gift at the stock market close on Friday March 20, 2020 would be about $95,000 whereas the value on February 6, 2020 would have been about $156,000. That means that today you could make a gift of 50% more shares to your beneficiary and use the same amount of your lifetime gifting opportunity as you would have six weeks ago.
Whether you make an outright gift or utilize a simple trust or one of the very sophisticated methods such as GRATs or GRUTs or SLATs or any other method, this is the possible silver lining to an admittedly dark cloud.
This post was written by LeRoy Metz