Recession Coming? Here's How to Lock Down Your Wealth Right Now

Recession signals are flashing red across the board. Consumer confidence just hit a 12-year low—and historically, that’s been a dead canary in the coal mine. Even worse? 60% of CFOs are betting on a downturn in H2 2025.

You might be thinking “but it’s already mid-2025.” Fair point. But here’s the thing: market volatility creates opportunities for savvy money moves. While others panic-sell, you can actually use a downturn to your advantage and slash your tax bill at the same time.

Strategy #1: Gift Like You Mean It (Tax-Free)

When stocks tank, their valuations drop too. That’s your golden window.

You can gift up to $19,000 per recipient in 2025 completely tax-free. But here’s the pro move: during a market crash, that $19k buys way more shares than usual. Your heirs get more assets, they grow tax-free on the rebound, and you shrink your taxable estate. Win-win-win.

Tools to consider: Grantor-Retained Annuity Trusts (GRATs), revocable living trusts, and Donor-Advised Funds (DAFs) all punch above their weight in choppy markets.

Strategy #2: Roth Conversions on Discount

Here’s a mind-bender: lower portfolio values = lower conversion taxes.

Converting pre-tax retirement accounts to a Roth during a downturn means you pay taxes on a smaller balance. Once it’s in the Roth, that money grows tax-free forever—including the bounce-back gains. You’re essentially paying less tax to lock in future wealth.

Strategy #3: Estate Freeze = Future Growth Goes to Your Heirs

Estate freeze techniques (like intentionally defective grantor trusts) lock in today’s lower valuations for tax purposes. Any appreciation after the transfer flows straight to your beneficiaries outside your taxable estate.

Translation: You cut gift taxes now and shield massive future gains from the IRS.

Bottom line: Don’t sit in cash hoping to time the market. Use volatility as your wealth protection playbook. The recession might be coming, but your money doesn’t have to go down with it.