Estate Planning and Estate Taxes—What You Need to Know
Estate planning and estate tax is a tiresome subject, and one that most of us would just like to sweep under the rug. However, it remains one of the most important matters that farmers and landowners attend to—the failure of which can result in scenarios ranging from annoying to nightmarish.
At UFARM, we field a lot of questions from farmers and landowners about this topic—and we are glad to have this conversation with our clients, knowing its importance. We offer appraisals and consultations that help you start off on the right foot as you develop an estate plan.
The most important step we take is to determine your overarching goals. Knowing and naming clear, concise objectives helps you to determine the best, easiest way to go about reaching them. These goals are generally the following:
- What do we want from or for our farm business?
- What do we want for our family?
- What do we want for ourselves?
- What do we want in our retirement?
Answering these types of questions is a compulsory starting point, and, answered clearly, point you in the right direction when making the rest of your estate planning decisions.
Similarly, we ask that all concerned parties affected by the business—whether they are farming, or non-farming, parents or grown children—be involved in this process of goal delineation. Then, after those goals are laid out, all parties should come together to create a plan that takes into account those goals, and prioritizes them in a mutually agreeable way. Don’t skip this step—it is in failing to do this that many unfortunate misunderstandings arise.
After you’ve discussed your overarching goals and laid out a plan, we work with you to put together a team to help you move on to the next step, addressing all legalities and technicalities in the process. This generally consists of consulting a lawyer and accountant well-practiced in estate planning.
Your team of estate planners will also be able to help you navigate the issue of estate taxes, and help you avoid crippling taxes that can result from poorly thought out planning. President-Elect Trump has emphasized frequently his desire to eliminate the federal estate tax and to limit burdensome capital gains taxes on small businesses and farms—also known as the “death tax.”
Senate Finance Committee Chairman Orrin Hatch agrees with Trump’s desire to see an end to the Death Tax, saying, “The death tax on family farms, small businesses, ranches and estates has crippled hard-working families for far too long. It ought to be repealed, plain and simple,” he said in an email to CNBC.
However, until we know for sure what will happen, a plan that covers all bases is necessary to avoid burdensome and potentially ruinous taxes when passing the farm from one generation to the next.
If you are needing to put together an estate plan and wondering where to start, let UFARM help. We are happy to work with you to lay out your goals and get the best people on the job to ensure a healthy, prosperous farm business for your children and grandchildren.
UFARM offers a full range of Nebraska land management services, including real estate sales, rural property appraisals, consultations and crop insurance. UFARM has operated in Nebraska since the early 1930’s. If you have questions about yields and productivity on your rented farmland, give the UFARM managers contact us today!
Sources consulted:
Dickler, Jessica. “Who Wins If Trump Repeals the Estate Tax?” CNBC.com. CNBC. 21 Nov. 2016. Web. 15 Dec. 2016.
“Transferring the Farm Business: First Focus on the ‘What.’” Agriculture.com. Meredith Agrimedia. 15 Nov. 2007. Web. 15 Dec. 2016.
