EST2517. Overrated - The Impact of Interest Rates on Estate Planning Techniques

In the past decade, historically low interest rates meant families could transfer wealth by making modest principal gifts rather than large ones. That’s because they could leverage the future growth of their assets using borrowed funds to boost future returns. Thanks to minimal borrowing costs, such “leveraged strategies” flourished in low-interest environments. Today, interest rates have eased modestly from their peak, but they still reflect a somewhat restrictive Federal Reserve stance rather than a stimulative one. As a result, families continue to grapple with higher capital costs. This session will cover estate planning techniques that will struggle and those will thrive as interest rates soar.

Learning Objectives:

• Understand how a period of historically low interest rates has shaped estate planning and wealth transfer strategy over the last decade.
• Anticipate which estate planning techniques will remain effective wealth transfer mechanisms as interest rates rise.
• Discover which estate planning techniques will struggle as interest rates increase.