How To Turn Downturns Into Generational Wealth

From January 20, 2025, when the second Trump administration began, until April 4, 2025, the Dow Jones Industrial Average has fallen 12% with U.S. stock markets losing $5 Trillion in value in the last three weeks alone. Based on the Shiller P/E Ratio, the markets, now at approximately 30, could fall another 30% to 22 on the Shiller P/E Ratio scale before finding a floor. Despite this, historically, the stock market does recover its value over time. In the meantime, the decline in value is an opportunity for estate planners.

Periods of market volatility—whether driven by inflation, recession or global disruption—can feel like times to delay estate planning decisions. But for estate planners serving ultra-high-net-worth (UHNW) families, these economic contractions are windows of opportunity. Depressed asset values and low interest rates open the door to a range of powerful estate planning strategies that can transfer substantial wealth to future generations at a reduced tax cost.

In short, down markets offer a chance to “coil the spring” of asset value growth and shift it out of the taxable estate—tax-free—before the rebound. For those willing to act strategically, the gains can be profound.

For more information see Matthew Erskine “How To Turn Downturns Into Generational Wealth,” Financial Advisor, April 7, 2025.

Special thanks to Joel C. Dobris (Professor of Law, UC Davis School of Law) for bringing this article to my attention.