By Prof Sergio Guerrero Rosas
These are strange times we are living in. All around the globe, everything in life has changed, from daily routines, job structure, even home life; that is why preparation and readiness to undertake drastic change in our lives should be top priorities for everyone. In this uncertain time, a renewed focus should ensure that preparation includes having an up-to-date estate plan.
There is no certainty of what the future will bring, but with the highest numbers per capita being in the North America zone, the smart thing to do is be prepared in case the worst is to come. Having a power of attorney for health care in place and up to date is important and we encourage our clients to do so; there is nothing wrong in getting all the help you can get and, if the worst case happens, you will need to.
Uncertainty in COVID-19 times may also bring great opportunities that suit our plans and act in time to make this change smoothly. Some people may think that changes right now might not be such a great idea with how volatile financial markets are, but we believe that changes into a more conservative model of things is the way to go. One of the many opportunities to do so is to use these low interest rates and consider this an opportune time to transfer financial assets to your intended beneficiaries. Distribution of your assets is not a bad idea when trying to lessen a blow; this strategy could be an option because the interest rate charged passes to junior family members or trusts for their benefit, transfer-tax free, and so, when these assets rebound from this depreciation, they won’t be on your taxable estate but in your beneficiaries benefit. At least, in Mexico’s tax law, it is obligatory to pay tax whenever there is an increment of equity in any type of property or rights.
All these changes may be new to your close family so it is best to share this news with them and let them know what you are trying to accomplish with these changes in your estate plan and how the changes affect you, your family and other beneficiaries. Such goals could include your desire to leave a charitable legacy or your hope that your children will have a safety net in times of need.