Looking back over the last two years has seen a lot of changes to estate tax laws. First, we went into 2010 with “a zero estate tax” – something we never thought we’d see. Then, after much speculation we learned we did have a step up basis but only $3 million to a spouse and $1.3 million for others. Then, a new concept was added: “portability” (which is allowing married couples to add any unused portion of the estate tax exemption of the first spouse to die to the surviving spouse’s estate tax exemption). Then, let’s consider current rules only cover 2011 and 2012 years, so we need some new legislation for 2013. To top it all off, look at what a farmer’s taxable estate is now considering land value has increased 50% or more since 2009.
I do not profess to know all the answers in estate planning. That is why with my clients we use the team approach. Let’s have a roundtable discussion with the farmer and his wife, an attorney, an FBFM fieldstaff and maybe a CPA depending on the complexity of the farming business. This is most conducive for getting answers and ideas thrown out with the first meeting. Attorneys should know the law, FBFM staff is an advocate for the family business expertise that the farmer possesses and all the financial economic numbers that are needed. The CPA would be necessary for available discounting and entity issues in very complex realms.
The basics of estate planning are the same whether you are a farmer or not and I found this website very good on education: wills.about.com. It can answer questions like:
Now let’s consider when action needs to be done on estate planning. It is needed if…