Wealth Strategy Insights

Wealth Strategy: Strategic Thoughts in Times of Sweeping Change

20 March 2020

By: Nancy E. Anderson J.D, CTFA, CAP, CEPA

In this series of brief articles, we will touch on strategies to help you assess your circumstances and, if necessary, reassess your financial plan. Though no one can predict the future, including the specific unfoldment of this catastrophe or another one in the future, planning may mitigate the severity of losses and help you protect your wealth.

Planning may also help you reduce emotional stress as you establish your personal intentions and ensure they will be followed in seeking the best possible outcomes.

Top 5 priorities as you revisit your financial plan

At any time—but especially in times of heightened stress—it’s helpful to start with the “big things” first. We’ve made note here of the highest priority items around wealth planning for you and your family. 

1. Re-evaluate your goals

In time of change, you need to be proactive. Financial goals may need to be re-assessed, which may lead to implementing and executing a new plan. Working in tandem with your advisors to devise effective strategies to mitigate negative financial impacts may be reassuring. Here are some questions to guide your re-evaluation:

Especially if your answers to these questions are different than prior to the current crisis, it may be time to recast your goals and establish new priorities grounded in a new reality for yourself and your family.

2. Review your Living Will and Estate Plan

Now is the time to review your estate plan documentation. Make sure that your plan is suitable for your current estate and goals. Although many individuals are aware of the importance of having Wills, Trust Agreements Durable Powers and Health Declarations, many delay their decisions to finalize their plan. Communicating your wishes to your family member(s) now is important so they clearly understand your desires. This is especially true for family members who may serve as Trustee of your Trusts after you pass away, but look for opportunities to establish clear communication with other family members as well.

Ensure any Living Wills reflects your wishes and are up to date. These carry provisions related to Do Not Resuscitate (DNR) clauses and may include exacting language prohibiting.

3. Plan for disruptions to business operations

The impact of COVID-19 for many business owners continues to grow as many companies are   closed for business or working with a reduced staff. Close communication with expert advisors is important as events unfold, to stay strategic about the financial impacts, including liquidity strains that may arise. We are beginning to see companies concerned about their finances and drawing down on their lines of credit to preserve liquidity. Additional financing or amendments to any existing debt arrangements may be a consideration.

4. Adapt your tax plan to evolving deadlines, if needed

In response to COVID-19, the IRS announced a delayed deadline for paying taxes. Taxpayers will now have until July 15, 2020 to pay their taxes, but the filing deadline remains April 15. Given the change in the federal tax payment deadline, most state legislatures are likely to follow suit. California, for example, has already extended the state deadline to June 15. However, check with your state before making assumptions about payment deferrals. 

5. Philanthropic Giving

COVID-19 is a different kind of disaster than a hurricane or a flood. It is both global and personal, touching every one of us in some way or another. Non-profits working in areas identified as having high number of vulnerable populations need support to help those in need.  

Yet the pandemic crisis and the need for social distancing have cut off event-based means for charitable fundraising, such as galas, runs, concerts, etc. Your favorite charities and non-profits rely on these fundraisers to sustain themselves year to year. Without the donations, many will not survive to realize their missions. The same is true for many small churches and other places of worship that rely on the weekly donations of gathered members.

So, give thought to how you can support organizations doing important work—both in acute support of the current crisis and in continuing unrelated work after the crisis.

If you are actively involved in non-profit fundraising, here are ideas to consider:

Concluding thoughts

One of the immediate lifestyle changes is “social distancing” to help slow the spread of the virus, given no acquired immunity in the population. This means new routines, new habits, new perspectives. Given that no one knows how long this will be the new normal, make plans to maintain social distancing for at least another month or so.

 

Calamos Wealth Management and its representatives do not provide accounting, tax or legal advice. Each individual’s tax and financial situation is unique. You should consult your tax and/or legal advisor for advice and information concerning your particular situation. For more information about federal and state taxes, please consult the Internal Revenue Service and the appropriate state-level departments of revenue, respectively. This information is provided for informational purposes only and should not be considered tax or legal advice.
You should not assume that any discussion or information contained in this newsletter serves as the receipt of, or as a substitute for, personalized advice from Calamos Wealth Management LLC. To the extent that a reader has any questions regarding the applicability of any specific issue discussed above to his/her individual situation, he/she is encouraged to consult with the professional advisor of his/her choosing. Calamos Wealth Management LLC is neither a law firm nor a certified public accounting firm and no portion of the newsletter content should be construed as legal or accounting advice. If you are a Calamos Wealth Management LLC client, please remember to contact Calamos Wealth Management LLC, in writing, if there are any changes in your personal/financial situation or investment objectives for the purpose of reviewing/evaluating/revising our previous recommendations and/or services. A copy of the Calamos Wealth Management LLC’s current written disclosure statement discussing our advisory services and fees is available upon request.