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Private Wealth
March 08, 2024

Keep Your Wealth Plan on Track

Economic, market and regulatory factors are out of your control, yet they can significantly impact your wealth plan. Regular, diligent assessments of your plan can help you stay on track to meet your current and future wealth needs as well as your legacy and philanthropic objectives.

Influencing Factors
There are a variety of factors that can influence your wealth plan. Being proactive and taking action to avoid uncertainty will help you stay the course.

Inflation spikes and fluctuating interest rates can substantially increase certain living expenses. To monitor your expenses, take a close look at any life transition decisions. For instance, if you are planning to retire within the year, reexamine the costs of your anticipated fixed and discretionary expenses.

Actions: Analyze asset sufficiency to cover retirement years, given elevated spending levels and higher borrowing costs. Ensure you can meet your lifestyle goals during heightened market volatility.

Markets regularly experience both strong pullbacks, such as the global financial crisis and COVID pandemic, and strong rebounds. Market performance in any given year can be muted or more volatile compared to longer-term averages. Generally, the longer the planning horizon, the lesser the impact a volatile market will have on the overall success of your wealth-planning techniques.

Actions: Market volatility can provide some near-term opportunities. With a market correction, consider wealth planning techniques such as asset swaps with grantor trusts, Roth IRA conversions and grantor retained annuity trusts that take advantage of lower asset values and can reap the rewards of a potential market rebound. Stay focused on long-term goals and build a well-diversified portfolio.

Changes to tax law are proposed regularly at the state and federal levels. Remain alert particularly to proposals that may change the lifetime gift and estate tax exemption or that affect planning techniques. Changes in tax law could also affect your charitable giving plan.

Actions: Given the uncertainty in the legislative landscape, consider trusts which can provide income tax and many nontax benefits such as fiduciary oversight, guidance for beneficiaries and stewardship of assets for future generations. Work with your advisor to leverage tax-efficient charitable giving vehicles and select assets.

Be Proactive
Regularly reassess your wealth plan to help combat the effects of factors beyond your control. Don’t let uncertainty surrounding market events or future tax law changes prevent you from being proactive in your current planning.

This material provides information of possible interest to Glenmede’s clients and friends, and does not provide investment, tax, legal or other advice. Any opinions, recommendations, expectations and/or projections expressed herein may change after the date of publication. Information obtained from third-party sources is assumed to be reliable but may not be independently verified, and the accuracy thereof is not guaranteed. Any potential outcome discussed, including but not limited to performance, legislation or tax consequence, ultimately may not occur due to various risks and uncertainties. Clients are encouraged to discuss any matter discussed herein with their tax advisor, attorney or Glenmede Relationship Manager.