Forbes Article: Estate Planning In Deflationary Times

By Matthew Erskine

The key to estate planning for many years has been the time value of money – the assumption that an investment asset will be worth more in the future than it is today. Since the 1930’s, this assumption has been proven correct, as the total return on investments has exceeded the rate of inflation by a significant margin. The recent economic crisis has been made worse by the already low rate of inflation in the developed world, to the point where commentators are once again warning of a deflationary spiral and all that it entails, pointing to the last two decades in Japan as a harbinger of things to come. Where deflation will occur is not a sure thing, but as the Federal Reserve reports, uncertainty generates economic slowdown even if the risk of deflation is low; and, it is quite reasonable to expect that the Covid 19 related uncertainty will continue for many months.

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