As you’ve probably noticed by now, we’re in the midst of great economic shifts. The roller coaster of the stock market, rising interest rates, dropping home values, and inflation through the roof. For many, it can be a great financial setback. During every economic shift, whether it’s the Great Depression, the last Great Recession, or even during the pandemic, some people get rich while others lose everything. Whether your family got rich, lost it all, or just hung on by their toes, you can learn from what happened and create the exact future reality you want for yourself and your family.
By taking action now, you can change your family’s future and ensure you have the stability you need to sail through the economic shifts in the best way possible. Whether you’ll be passing on wealth or inheriting it, it’s crucial to have an estate plan in place to reduce the risk of financial loss that will occur if you wait until it’s too late. Let’s dive into how to protect assets during a recession.
The first step in how to protect assets during a recession and ensure your family benefits from the current and coming economic shifts is to have conversations with the people you depend on, the people who depend on you, or who you will depend on if something happens to you or your assets.
With the economic realities that are upon us, this is the time to bring your family together and talk about what there is, where it is, and how it’s being managed (and will be managed), and how to access it all in the event of a a major financial crisis, such as the pandemic, a major stock-market crash or another bank failure.
If you’ve attempted to have these conversations with your loved ones in the past and it hasn’t gone well, reach out and ask for our help. We have processes and systems in place to support you in having these delicate conversations with your parents, kids, or siblings with far more ease than you trying to do everything all on your own.
And if you don’t have living parents, kids, siblings, or a spouse, it’s even more important that you start these conversations now. You can begin by identifying who you need to have these conversations with. We work with many single people and unmarried couples to help them navigate and talk about what can be a confusing and uncertain future.
Once you have the conversations with the right people based on your family dynamics, the next step is to create an inventory that lists all of the assets you own, where they are located, and how the people you love can find them in the event you become unable to share those details yourself. Whether you’ve created a formal set of estate planning documents already or not, you need to create or update an inventory of your assets. In our experience, most estate plans don’t do a very good job of keeping assets organized, if at all. When a loved one becomes incapacitated or dies, this is actually one of the biggest sources of expense, heartache, and pain—no one knows what there is, where it is, or how to find it.
One of the greatest gifts you can give the people you love is what we call a “Family Wealth Inventory,” and it’s something we create for all of our clients as part of their estate plan. We will not only create this inventory for you, but we have systems to keep it consistently updated year in and year out, as your life, assets, and the law change over time.
During a major economic shift, creating, updating and revising your Family Wealth Inventory is critical, and sharing it with the people you love is your number-one mission. As we see it, family wealth isn’t just about your financial wealth, it includes your intellectual, spiritual, and human assets. In fact, these non-financial, intangible assets are usually what we all care about most, and yet they are so often overlooked in estate planning.
Once your Family Wealth Inventory is established and updated, you may decide to reallocate your resources based on the current economic environment. Depending on your stage in life, your financial obligation and objectives can differ greatly. For example, now might be the time to invest in a rental property, start a college fund, or buy more life insurance. Or you may decide that it’s time to launch that business you’ve been wanting to start.
When we meet with you for a Family Wealth Planning Session, we’ll help you look at whether your resources are being held in ways that will support you to reach your short and long-term goals. Then, we can either help you reallocate your resources to achieve those goals, or refer you to professionals we trust to help you reallocate.
Times are changing, and now is the best time to look at what you have, so you can consider the future and set realistic goals. Those who do so will thrive. Those who don’t will fall behind and wish they had done something different once it’s too late.
Once you look at what you have, where it is, and how you want it allocated, the next decision is who will take care of it all if you are unable. Leaving the management of your affairs to chance or to out-of-date estate planning documents is the worst thing you can do for yourself and those you love.
Start by updating the estate planning you already have in place to handle your assets in the event of your incapacity or death. If you don’t have any plan at all, the state has one for you, and it almost certainly isn’t what you will want to have happen and most likely will include probate. Even if you do have an estate plan in place, it’s likely out of date, or possibly wasn’t even created properly in the first place.
No matter what you have—or don’t have—we can help. Now that you know how to protect assets during a recession, call our office today to start protecting your wealth and preserving your assets for you and your loved ones. We will design an estate plan that will work for you now and in the future and protect you from turbulent economic times.