As the nights draw in and you and your family prepare for the festive season, now is a great time to think about your big picture. Here are some crucial questions for you to consider, along with our insights and some answers. The end of the year is a good time to reflect on what’s most important to you and to speak with your J.P. Morgan advisor about your wealth planning goals.
Making gifts can be an excellent way to pass on wealth to your loved ones, whilst minimising your taxable estate for Inheritance Tax purposes. Many people aren’t aware of the different ways to give, from one off gifts to regular gifts out of income, and the tax consequences that could arise. Should you buy your child a house, or gift them the means to do so themselves? Now is a great time to think about your strategy for future giving and the passing of wealth to future generations.
One of the best ways to shape your wealth strategy is to identify your primary intent. Many of our clients have one of four intents: SPEND to support their lifestyles; DIVIDE to leave a set amount to beneficiaries; PRESERVE to have wealth last multiple generations; or GROW to enable wealth to grow in perpetuity. Once you’ve articulated your intent, share it with your family and advisors. That way your strategy can be aligned with what you truly want.
Children as young as three are able to learn about money matters. It is best to start early, but it is also never too late. The important thing is to begin—and then keep the dialogue going. Help your children master key concepts, such as sharing, saving, borrowing and investing—with guidance that fits within your family’s values.
The festive season can be an enjoyable time to engage both the next generation and your wider family in your philanthropy, considering key issues in society during a period for reflection. Take the time to review your giving in 2018, and consider priorities for 2019 – asking children about areas that they care about and consider involving them in the family’s giving, helping them to establish their own philanthropic passions as you work towards your broader philanthropic objectives.
As we enter into the 10th year of this economic cycle, we get closer to the end of the cycle than the beginning. Despite risks around earnings headwinds, a trade war, rising U.S. rates and European politics, we feel that the cycle can continue. History has shown that the last phase of a cycle typically yields positive returns for equity investors. However, during this time, we also think it is prudent to review your equity risk exposure, your investment objectives and your time horizon to ensure that you are correctly positioned for all potential market outcomes.
As we approach the March 29th deadline, the transition deal and the details of the proposed future relationship between the UK and the EU will likely move markets. We continue to expect a negotiated transition deal to be agreed upon and eventually ratified by the UK parliament. This process will be difficult, but markets will likely enjoy a relief rally in this instance. Having said that, we assign a 10% probability to a “no deal” scenario which would primarily have an extremely negative impact on Sterling. Pressure will likely also be felt by UK domestic companies as the outlook for the UK becomes more uncertain.
You want to pursue a time-sensitive investment. Perhaps an ideal property hits the market? To seize great opportunities, timing is essential.
Or perhaps you are planning ahead – do you have an upcoming tax bill or a private equity capital call?
Be prepared and consider establishing a line of credit that uses the securities in your portfolio as collateral. This can be put in place at no cost and can provide fast, convenient access to liquidity. You pay when you use the facility. Give yourself the freedom of financial flexibility, but be mindful of the risks associated with borrowing.
Fraudsters will pose as companies or trusted individuals you do business with—trying to trick you into sending money or divulging account information. Always validate emailed payment instructions by calling the company on a known number. If you receive a request to provide personal or financial information, evaluate it before acting. And if you suspect you’ve been targeted, speak with your J.P. Morgan team immediately.
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