As San Diegans, we're well aware of the rising cost of living. Inflation is a constant reality, and it can have a significant impact on your estate planning.
While some assets, like real estate, may appreciate in value over time, inflation can erode the purchasing power of your overall estate. This means that the value of your assets today may not be enough to cover the same expenses or provide the same level of support for your loved ones in the future.
Here's why it's crucial to consider inflation when evaluating your estate values in San Diego and in planning your estate:
Underestimated Bequests: If you haven't reviewed your estate plan in several years, your bequests may not be sufficient to meet your intended goals. For example, a $100,000 bequest today might not be enough to cover the cost of long-term care in the future.
Tax Implications: Inflation can also impact the potential tax burden on your estate. As asset values increase, so too can the potential estate tax liability.
What can you do?
Consider inflation-adjusted assets: Certain assets, like real estate and some investments, may perform better during inflationary periods.
Seek professional guidance: An estate planning attorney can help you understand the impact of inflation on your specific situation and develop strategies to mitigate its effects.
Regularly review your estate plan: Schedule a meeting with your estate planning attorney every few years to assess your current assets and adjust your plan as needed.
Talk to your family: Discuss your estate plan with your loved ones so they understand your wishes and can help ensure your plan remains effective over time.
By taking proactive steps and seeking professional advice, you can ensure that your estate plan remains effective and continues to reflect your wishes, even in the face of rising inflation.
Contact Andrea Aston, Attorney at Law, today to schedule a consultation and discuss how to protect your estate in an inflationary environment.
Comments