In the Raleigh Durham, NC area, at this time of year we want to be closest to our loved ones, Covid-19 is still making it difficult to spend time together. Public health officials warn that indoor events pose a far greater risk of spreading the disease. And many of the people we're most anxious to see, such as grandparents and other older relatives, are the most vulnerable.
Covid-19 has created a lot of financial worries, which can wreak havoc for entrepreneurs — from business decisions to personal relationships. PPP loans may be a lifeline, but only if there’s plan in place to ensure everything’s done by the rules and the documentation to prove it — or business owners may miss out on loan forgiveness.
Putting The Market's Surge in Proper Focus It’s almost like the stock market is on another planet, with its record-breaking performance while the real-economy seems to be a different world. But when you take a closer look, the separation of the market from the real economy is not so mysterious but driven by “Covidnomics -- the unique economics of the Covid pandemic. The FAANGM companies -- Facebook, Amazon, Apple, Netflix, Google, and Microsoft -– led the economic recovery after the Covid shutdown, and they have roared ahead of the broader market. But appreciation in shares of FAANGM share prices are magnified enormously in the performance of the major stock indexes, like the Standard & Poor’s 500, which weights each company by market capitalization –- the price times the number of all shares outstanding. The largest 25 companies in the S&P 500 account for about 42% of its return, while the smallest 25 of the 500 companies in the index accounted for just three-tenths of 1% of its return. The huge losses sustained by the smallest 25 companies are hardly a factor in the market-cap weighted S&P 500 index, but they reflect the world of pain in the real economy. Of the 500 stocks in the S&P 500, 294 suffered share-price declines so far in 2020 and the average loss was 24.1%! At the same time, it’s also important to note that the FAANGM stocks are not wildly overvalued. The PEG ratios of the FAANGM – their price-to-earnings ratios divided by their earnings growth rate – are not unreasonable, nothing like a stock-bubble of 1999! With stock indexes breaking records, remember that the S&P 500 is NOT the real economy. It’s just Covidnomics, just one of many financial economic anomalies caused by the Covid pandemic shutdown and recovery. Please contact us with any questions or to set up a meeting firstname.lastname@example.org , and don't hesitate to share this video with people who might benefit from our work
Covid Hits Private Wealth The Coronavirus is leaving a path of economic devastation, transforming the landscape of investing and taxation, and it’s challenging families to act on new risks and opportunities in managing their wealth. It’s an abrupt change in conditions, and it amounts to a "perfect storm“ threatening family wealth. Across the nation, state governments are forecasting huge budget shortfalls State and city tax revenues have plunged in the pandemic but government services, like transportation and police, continued to be provided, with no letup in expenses. Meanwhile, federal government emergency stimulus payments to individuals and financial aid to businesses have added a whopping $2.4 trillion to Uncle Sam’s long-term debt! And for the first time, the national debt is larger than the annual gross domestic product! With hikes to state and federal income taxes as well as transfer taxes on the horizon, it’s wise to review your situation with this new tax outlook in mind. For individuals with taxable estates, the current $11.58 million per person exemption from estate and gift tax will be cut in less than half on January 1, 2026. However, the exemption amount could be slashed much sooner, depending on the outcome of the November 3 election. Maximizing annual gift-tax exclusions, making charitable donations, and establishing trusts can make a big difference in preserving your family’s values, and the downside risk of failing to plan has increased. Every month, the IRS releases the minimum interest rates you are permitted to charge on loans to family members, trusts, and other entities. With this "applicable federal rate" currently at less than 1%, loans may be a savvy way to transfer wealth to the next generation for buying a home, starting a business, or making charitable bequests. With the pandemic potentially lowering the value of real estate and business assets, and frequently causing stock market volatility, optimizing low rates to make intrafamily loans may suddenly be a more viable solution to reduce taxes and boost your legacy. Finally, with tenants more often unable to pay rent, and a tidal wave of small business failures expected, landlords and business owners suddenly face an explosion in their liability exposure. Asset protection strategies to mitigate personal liability and creditor exposure require preparation before a problem arises or may not hold up to legal challenge. The destruction wrought by the virus crisis has changed tax and financial conditions and requires proactive engagement of family members as well as advice from tax, legal and financial professionals. Please contact us with any questions or to set up a meeting email@example.com , and don't hesitate to share this video with people who might benefit from our work
.Covid Crisis And Your Financial Affairs The Covid pandemic is causing families unimaginable suffering and grief, and it’s forcing many individuals to confront mortality, to consider in very real terms what will happen when their life is coming to an end. What happens to you at the end of your life is governed largely by a handful of documents. A durable power of attorney permits someone else to manage financial matters while you’re living, empowering someone you name to pay bills, write checks, or sell and purchase assets on your behalf. A health care proxy and living will names someone to make medical decisions if you’re unable to express your wishes and contains instructions about end-of-life care. This is top-of-mind for a lot of people now, understandably. A last will and testament provides the details take effect at your death for disposing of your property, and should be reviewed annually to make sure that the trustee and executor as well as guardians of minor children you appoint conform to your current wishes. A revocable trust also provides for the disposition of your property after you die but avoids the probate court process. Because courts across the country were shut down for a time and are are dealing with a surge in filings and probate cases due to the pandemic, it’s more important to have a revocable trust to avoid probate court delays. To set up a revocable trust, you’ll need to retitle bank and brokerage accounts, real estate, and other assets, so it involves signing documents with a witness present and this has become more complicated during this time of social distancing, but remote signings can be done online. It’s important to speak with family and friends, or whomever you’re appointing, about your wishes, so that they’re aware of your plans. You also want to be certain beneficiary designations on retirement plans and life insurance policies are up to date. Please contact us with any questions or to set up a meeting firstname.lastname@example.org , and don't hesitate to share this video with people who might benefit from our work
Year-end tax planning is not what you’d normally call adventurous, astounding or even exciting. Due to the tax and financial tumult resulting from the Covid crisis, yearend tax planning is going to be an adventure sport this year. So we’re giving you a heads up now, to be prepared: 2020 yearend tax planning is going to be more important, more complex and more deadline-driven than in years past. Coincident with multiple layers of tax changes, epidemic economics has forced yields to a low unprecedented in modern U.S. history, which, along with high stock volatility, has drastically changed year end tax math. For example, individuals who take required minimum distributions from individual retirement accounts, or who are about to start taking RMDs, have a major tax-saving opportunity, a individuals who may never have thought about converting traditional IRA assets into to Roth IRAs, are suddenly going to be confronted with decisions that will need to made before the end of the year. The stakes are also raised by the November election because that’s going to determine the precise strategies you must take before the end of the year. So please be aware that the upcoming yearend tax planning season may be an adventurous one and you may want to start preparing for it now so you can nail it. Please contact us with any questions or to set up a meeting email@example.com , and don't hesitate to share this video with people who might benefit from our work
Today we are going to talk about estate planning in the time of coronavirus. If ever there was a time for people to get their affairs in order, this is it. No one is immune from this virus. Many of us are already feeling some anxiety about the state of our estate planning and may not be sure of the things we should be doing. Todays show is about Covid-19 Estate Planning. We’re not going to talk about estate planning in its entirety. Instead we’re going to focus on what can be done right now to offer some immediate protections. Later, when there is more time, and travel restrictions have been lifted, you can come back to your estate plan and fill in the gaps. But for right now there are several things you can and should do. We know you have a lot going on in your life right now, but this is important. Today I hope to help you understand the urgency of getting certain documents done, whether you are doing it for the first time, or updating them in light of this vicious virus that now makes the possibility of serious illness and even death more real. Joining us for this discussion is Markeith Gentry who is the WNCU’s Production Assistant and makes sure Mastering Your Money is available to our listeners. Welcome back to Mastering Your Money, Markeith Gentry