How To Protect Your Estate In Times Of Global Uncertainty

Photo by Zac Gudakov at Unsplash

Anyone, no matter how wealthy, can make hasty decisions that damage their net worth.

In April Amazon’s stock plummeted and Jeff Bezos watched his personal wealth drop by $20 billion. How could a giant like Amazon, which has been largely responsible for maintaining some sense of normalcy during the pandemic (i.e., we could still get our “stuff”), suffer this kind of market value loss?

It appears the company overestimated to investors the public’s continued reliance on online shopping, so when consumers returned to brick and mortar stores for their items, Amazon’s bottom line took a hit. While it is safe to assume that Amazon and Mr. Bezos will be fine, the news is nonetheless disconcerting and should provide the rest of us with a valuable lesson about navigating uncertainty.

Wanting to take extreme action (and regain some semblance of control) in times of political and financial upheaval is natural – especially since the two usually go hand in hand, as we are now seeing with the conflict in Ukraine and the skyrocketing inflation globally. Differing opinions among experts as to whether we’re teetering on the verge of a bear market or are already mired in one have added to the confusion.

The question is, how can we protect the value of our estates in the meantime?

Recognize your entire estate. Your estate consists of much more than just the cash in your bank account or your stock portfolio. Aside from the obvious (such as a home), many people forget that all physical assets count when calculating net worth, cars, art, collectables, wills, trusts, etc.  ALL are an important part of any estate protection strategy that will safely transfer your wealth to your heirs.

Get your house in order. If you haven’t done so already, bite the bullet and review all your documentation – from the deed to your house to the provenance of the forgotten painting in your basement. Knowing what you have, where you have it, and how much it is worth is not just a good habit to get into – it also goes a long way to clearing the mental clutter that impedes sensible decision-making. You might even take it one step further by employing a digital tool to store all your data securely on your devices so it is within reach 24/7.

Don’t poke the bear. This is where common sense comes in. The immediate future of the market is unsure, so tighten your belt and invest only in assets that make sense in a bear market. Also, maintain the physical assets that have historically appreciated in value, such as homes, art, and collectibles.

You may have forgotten about that painting in the basement or dismissed it as an eyesore. But remember, yesterday’s starving artist may be tomorrow’s art darling. Do the research, repairs, and maintenance so that it maintains its value.

Ask for help. This is perhaps the most important recommendation of all. There are an increasing number of principals who are taking the reins of their estates. This is great when things are going smoothly. However, if you pride yourself on your financial wisdom, know this: tumultuous times such as these are not for indulging the ego.

Even the savviest investors need an expert with whom to brainstorm and troubleshoot from time to time. This is their bread and butter – what they eat, sleep and breathe – and they can help you navigate nuances and warn you of hiccups coming down the pike. When meeting with them be prepared with questions about your portfolio – such as how to leverage your cash during times of steep inflation – so that you can minimize loss (or better yet) generate a positive return.

Riding out a bear market and the political upheavals exploding across the globe is not for the faint of heart. But with patience, the right attitude, and the right advice, you can not only preserve your wealth, but also set yourself up for growth when the uncertainties are resolved.

Jonathan B. Fishbeck is the founder and CEO of EstateSpace, providing individuals and family offices a platform to simplify estate management for more owners. This article was published with the permission of EstateSpace.