According to one agricultural estate planning expert, changing circumstances are making it more difficult for Texas residents to bequeath the family farm to their heirs. What worked for one generation will not necessarily work for the next due to constantly changing tax laws. Indeed, individuals who have beneficiary concerns regarding their ability to pass on their farm to heirs may benefit from attending workshops and educational seminars regularly to ensure that they are up to date with current tax regulations.
It was only 40 years ago that a Texas farmer was limited to passing on just $60,000 worth of assets to relatives tax-free. Now, depending upon the state in which they reside, families can bequeath as much as $5.3 million before taxes kick in. While this certainly makes things easier for many, the issue is that the agricultural industry is constantly changing too -- just like the tax laws -- and many farmers operate with completely different business models. Accordingly, there are no more cookie cutter estate planning approaches that apply to every farmer.
One of the most common problems applies to a farm owner whose children live in different cities, have careers of their own and know nothing about the family business. These farmers worry that if they leave the family farm to their children, the process of liquidating the assets and/or finding a suitable person to manage the farm will be more of a burden than a boon for them. In such a situation, a uniquely styled estate planning approach may be necessary.
By educating oneself on current estate tax laws as they apply to Texas farmers, and evaluating one's unique family situation and business plan, farmers can prepare their estate appropriately. It does not matter if one has a large-scale farm or a one-man operation. Indeed, numerous people have approaches to their farming business, but beneficiary concerns can be addressed and resolved on a case-by-case basis so that family members can receive an inheritance that is best suited for their wants and needs.
Source: theeagle.com, Passing on the farm discussed at several seminars, Kay Ledbetter, Feb. 16, 2014