Speaking to a group of 45 financial planners at a private-club breakfast in
However, they emphasized that their advice depends not just on who is in the
"We don't know what will happen," said
Nevertheless, it's important for business owners and affluent individuals to start thinking ahead, they said, since some strategies will require advance planning.
For instance, given the income tax proposals put forth by the two candidates, a Trump victory could bring about a 33 percent tax rate, the lowest since 1992, when it was 31 percent, according to
That would suggest business owners who anticipate a Trump victory should consider a sale of their business, while investors convert traditional individual retirement accounts to
With a proposed corporate tax rate of 15 percent in a Trump administration, business owners should consider converting an S corporation to a C corporation and funding a defined benefit or cash balance plan with excess cash, or reinvest it in the business.
If Clinton is elected, Garcia said she would continue tax planning as she has for the past eight years, by deferring income as much as possible, maximizing business expenses and assess investment holdings for long-term capital gains.
When it comes to estate and gift taxes, Clinton plans to reduce the estate tax exemption to
She'd lower the current gift tax exemption to
Trump would repeal both the estate and gift tax and limit the basis step-up.
Galbraith noted that under Clinton's proposal, "estate planning would become necessary for many more people."
So if Clinton is elected, he recommends clients use their remaining gift-tax exemption and think about swapping highly appreciated assets to get them out of grantor trusts.
Under Trump's plan, basis step-up planning will become important, Galbraith said.
Clients also should review their life insurance policies, which will play a different role in financial planning should tax laws change, said
"You should audit policies under either administration," he advised.
Meanwhile, equity investors may want to take note of the performance of the stock market, since historically it has had an uncanny ability to predict
During the three months leading up to the election, if the stock market is positive, the party of the incumbent typically stays in the
Since 1928, she noted, there have been 22 election cycles. In 14 of those, the market was positive in 12 of those, and the incumbent's party won the Presidency.
In seven of the eight election cycles where the market was down, the party in power has been ushered out of the
Three years -- 1956, 1968 and 1980 -- were exceptions to this rule.
"This seems to be an unusual election year, so we'll see what happens," she said.
Longer term, investors may want to consider that since 1833, the Dow Jones Industrial Average has been up 10.4 percent historically in the year before an election year.
Historically the Dow has been up almost 6 percent during an election year.
That positive trend seems to be holding true this year as well, since the Dow is up 7.2 percent to date, Hale noted.
But that trend may not last if historical trends are followed, no matter who wins the election.
"The first and second years of a presidential term have seen the least positive returns in the stock market," she said.
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