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Financial Responsibility In A Covid-19 World

John Carey, Portfolio Manager

April 30, 2020

The Coronavirus has done more than just rattle financial markets and put a huge dent in the economy. It has also forced us to consider our own mortality too. Whether you’re 50 or 90, you have a responsibility to your loved ones to make sure your financial affairs are in order. There is no better time than the present to get it done. Here are 4 immediate steps you can take that will help put your mind at ease:

Make sure you have an estate plan

We think everybody should have an estate plan, regardless if there is no looming health threat. If you do not have one, there is no better time than now to put it together. Please contact us directly to understand what documents are needed for an estate plan or to get in touch with a professional that can help you.

Re-configure your asset allocation

Market volatility can throw your asset allocation off target. While it is natural to feel a level of fear about making any investment right now, we believe there may be no better time to re-balance your portfolio. Work with your portfolio manager to ensure that you are diversified enough to capitalize on potential market opportunities while limiting downside risk.

Establish philanthropic goals for your heirs

The authors of the Cares Act rightly recognized the desire for businesses, foundations and individuals to make charitable contributions in the age of COVID-19. Individual donors who are well-positioned to give generously can take immediate advantage of a tax code change for the year 2020. There is now no limit to the deductions you can take for charitable contributions whereas previously you could only deduct up to a maximum of 60% of your adjusted gross income. If you wish to establish philanthropic goals but have not had the opportunity to do it, now would be the perfect time.

Set up 529 family education accounts

You can open a 529 account and name anybody as the beneficiary. Federal tax law permits you to contribute up to $15,000 (for 2020, or $30,000 for a married couple electing to split gifts) to a beneficiary's 529 account each year, free from federal gift taxes. Funds in a 529 plan grow federal tax-free and will not be taxed when the money is withdrawn for qualified education expenses. When choosing a 529 plan, you will want to compare fees, investment options and lifetime contribution limits, which may differ from state to state. Please contact us directly if you need help establishing a 529 Plan for your family.


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