12/10/2023 0 Comments Pa inheritance tax![]() Stating your wishes now will help your heirs make decisions now and after you have gone. Furthermore, talking with your heirs now can avoid potential disagreements and disputes following your death. Regardless of the net worth of your estate, estate planning can facilitate the transfer of your property and ensure the continuation of the farm business. Understanding the financial health of your business can help frame the discussion about the future of the business and help everyone involved understand the stakes involved. Income statements detailing the recent profitability of the farm are also important when thinking about how the viability of a farm operation may be affected by how it is divided. A listing of assets and liabilities can also help reduce confusion among your heirs about exactly what is included in your estate. Liabilities are any outstanding debts you owe on these items, such as mortgages, other loans, and policy premiums. Assets can also include the value of any life insurance policies you own. Assets include your land, buildings, livestock, equipment, personal residence, cars, other personal property, savings, stocks and bonds, and pensions or other retirement savings. If you do not have a recent market-basis balance statement for your farm that details the fair market value of your assets and liabilities, it is critical that you list your assets and liabilities to come up with an estimate of your net worth. However, knowing the value of your estate is still an important first step to your estate planning process. With increased higher individual exemptions under the 2017 Tax Cuts and Jobs Act, it is estimated that only a fraction of a percentage of estates will be liable for federal estate taxes. In the past, much of the discussion over estate planning involved ways to minimize the impact of estate and inheritance taxes. If the farm is to be sold, does the family want the property to stay in farming or is selling to the highest bidder acceptable? Who will manage the farm if you become ill or disabled? Knowing what you hope to accomplish in the estate planning process facilitates choosing among the tools available. For example, is there someone who wants to take over the farm? A common issue that needs to be discussed is how the division of property will affect the viability of the farming operation. You need to ask yourself, your spouse, and your children many questions to determine the best course of action. Ensuring that your heirs do not fight over the property.Specifying how your assets will be distributed among your children and grandchildren.Providing an income stream for dependents such as minor children or elderly parents.Providing retirement income for yourself and your spouse.Expanding the farm to enable your child(ren) to earn enough to support their family.Personal property includes cars, bank accounts, stocks and bonds, livestock, and farm equipment.Įxamples of goals to consider in your estate planning include: Real property includes your land, house, farm structures, and all real estate improvements. Property includes both real property and personal property. ![]() The first step in estate planning is setting goals for your business and your personal life, including your property and income. The information in this fact sheet will help prepare you for a productive session with your advisers. ![]() You should seek the advice of a tax attorney, accountant, or financial adviser. While this fact sheet presents some tools for you to consider in your estate planning, the circumstances will be different for each individual and family. Another mechanism to overcome some of the problems of being land rich and cash poor is to invest in a life insurance policy. Others may find transferring the farm before the death of the owner(s) works best for their situation and can do so through either sales or gifts. Some farm families may look at selling or donating an easement as an estate planning tool. Estate planning involves basic steps like preparing a will and may include changing the ownership structure of the farm or forming a trust. Once this is done, they can determine the best planning strategy that will achieve their goals. To have an effective estate plan, farm families should set goals for their individual needs and determine their net worth. Getting a dialogue started with family and determining a strategy to transfer farm assets can help minimize stress and the potential tax burdens on your heirs. Anyone who owns real or personal property-farm families in particular-needs to consider estate planning.
0 Comments
Leave a Reply. |
AuthorWrite something about yourself. No need to be fancy, just an overview. ArchivesCategories |