Florida’s citrus growers might not be thinking about estate administration, but experts say it is never too early to draft and refine your estate plan. Farmers, in particular, need to be educated about estate planning because of their massive financial assets. Most farmers own a significant amount of land, along with large equipment and other holdings. Failing to adequately distribute those assets can cost your heirs when you die.
So, why do most farmers put off estate planning? Many are intimidated by the process. They think estate planning is too complicated, but with the assistance of a qualified legal professional, you can ensure that future generations are able to make the most of your resources. Be sure to enlist tax advisers and attorneys to help you craft these strategic documents.
Farmers need to get an idea of their estate’s value by identifying all assets and their worth. You need to consider who the primary successor will be for the farm. You should also figure out a distribution plan that meets all of your goals for each of your heirs.
For most, the farm itself will be the most valuable holding. Luckily, Congress just passed a new estate tax bill that will allow each individual to exempt up to $5.25 million each without penalty – that’s $10.5 million per couple. After you reach that mark, however, tax rates rise to a whopping 40 percent.
Tax and legal advisers can help you identify strategies that would help you best distribute your assets. They might encourage you to gift cash or assets to your children while you are still alive. Tax-free gifts can be removed from the estate and placed in an irrevocable trust, to be distributed upon your death. Each child can receive up to $28,000 each year from their parents, according to experts. Even if you know your son or daughter will be taking over responsibility for the farm, you should strategize to help protect the assets you worked so hard to earn.
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