Impact of Current Market Conditions on Valuations for Estate Planning

Schneider Downs has recently written about general estate planning strategies in this volatile market, but this article will focus more on the impact on valuations

During this difficult time, we at Schneider Downs hope for the safety and good health of everyone in the communities we serve and elsewhere.

Although it may not be ideal to sell a business at this time, there could be an opportunity to gift ownership in your company. Donors can lower their estate tax burden by gifting during a time when the value of their company has declined.

The stock market is currently in a highly volatile state which creates significant investment risk since, historically, higher volatility results in lower returns. As shown in the chart below, the Chicago Board Options Exchange's Volatility Index (“VIX”), a popular measure of the stock market's expectation of volatility based on S&P 500 index options, jumped in mid-March. Specifically, the index reached an adjusted close of $82.69 on March 16, 2020 following the CDC’s warning against large gatherings issued the day prior. For perspective, the index peaked at an adjusted close of $80.86 during the Great Recession in 2008. The VIX has since declined to $53.73 as of the writing of this article.


Higher volatility is often one of the many factors that can lead to lower valuations. The chart below indicates that market capitalizations for public companies across all sectors have declined by approximately 25% to 55%, depending on the sector, in the past month:

Source: Fidelity

This increased volatility and lower market capitalizations in the public markets indicate lower valuations for privately held companies as well and could be an advantageous time for estate planning.

However, no one has a clear view of what the economy will look like tomorrow or how long the decreased valuations may last. At this point in time, it may make sense to consider the tax benefits that a lower valuation would provide as part of your overall estate plan.

Schneider Downs has significant experience in preparing business valuations for gift and estate tax, financial reporting, buying/selling and a range of other purposes. Please contact Steve Thimons (412-697-5281; or Thomas D. Pratt (412-697-5615; for more information about our business valuation services.

Please visit our Coronavirus resource page at for related content.

You’ve heard our thoughts… We’d like to hear yours

The Schneider Downs Our Thoughts On blog exists to create a dialogue on issues that are important to organizations and individuals. While we enjoy sharing our ideas and insights, we’re especially interested in what you may have to say. If you have a question or a comment about this article – or any article from the Our Thoughts On blog – we hope you’ll share it with us. After all, a dialogue is an exchange of ideas, and we’d like to hear from you. Email us at

Material discussed is meant for informational purposes only, and it is not to be construed as investment, tax, or legal advice. Please note that individual situations can vary. Therefore, this information should be relied upon when coordinated with individual professional advice.

© 2020 Schneider Downs. All rights-reserved. All content on this site is property of Schneider Downs unless otherwise noted and should not be used without written permission.

our thoughts on

A Virtual Success: The ACFE Holds 31st Annual Global Fraud Conference
IRS Guidance Provided on the Silo of CARES Act NOLs
Extended Deadlines Granted for Ohio Property Tax Collection
Additional Guidance and Relief for Opportunity Zones from the IRS
Volatility is Back … and It is Here to Stay
What has COVID-19 taught us about our businesses processes?

Register to receive our weekly newsletter with our most recent columns and insights.

Have a question? Ask us!

We’d love to hear from you. Drop us a note, and we’ll respond to you as quickly as possible.

Ask us

contact us

Map of Pittsburgh Office

One PPG Place, Suite 1700
Pittsburgh, PA 15222
p:412.261.3644     f:412.261.4876

Map of Columbus Office

65 East State Street, Suite 2000
Columbus, OH 43215
p:614.621.4060     f:614.621.4062

Map of Washington Office
Washington, D.C.

1660 International Drive, Suite 600
McLean, VA 22102