Planning opportunities when asset values decline

A decline in asset values can create opportunities for intrafamily wealth transfers. This piece examines several wealth transfer strategies.

by Casey Verst, Senior Wealth Strategist, Advanced Planning Group 13 Dec 2022

A sharp pullback in the stock market can bring anxiety to investors. Business owners and investors in the private sector similarly become fearful of what market volatility could mean for their future. Although market uncertainty may leave some individuals with a growing fear of the unknown, many others believe that, as in the past, downturns are just part of a cycle and higher values and happy days will come again.

No matter your outlook during a market pullback, the depressed values of assets do shed some light on otherwise difficult circumstances—this may lead to an opportune time to take advantage of certain estate planning strategies using assets when prices are low and possibly undervalued. The Internal Revenue Service (IRS) limits the ability to make lifetime gifts to heirs (e.g., children, grandchildren, other family members, and friends). Generally, the two main tools we have are the annual exclusion and the lifetime exemption. In 2023, the annual exclusion allows a taxpayer to give up to $17,000 to any number of individuals ($34,000 per married couple). Any gifts in excess of this amount count against the taxpayer’s $12.92 million lifetime gift tax exemption in 2023 ($25.84 million for married couples).1 Utilizing assets that have decreased in value to make a lifetime gift, and capturing the “rebound” in an asset outside of one’s taxable estate, can be extremely beneficial and tax efficient. This whitepaper focuses on why estate planning in an uncertain market environment may be something to consider.

Please note: The complete publication, including important information and disclosures, can be downloaded via the link below.

Browse additional articles available from UBS Advanced Planning on topics of interest to ultra high net worth clients and their families.

Purpose of this material.
The information on this page and in the attached document is provided for informational and educational purposes only. It should be used solely for the purposes of discussion with your UBS Financial Advisor and your independent consideration. UBS does not intend this to be fiduciary or best interest investment advice or a recommendation that you take a particular course of action.

No tax or legal advice.
UBS Financial Services Inc., its affiliates and its employees do not provide tax or legal advice. You should consult with your personal tax and/or legal advisors regarding your particular situation.

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