Family farms and ranches deal with some of the exact same estate planning obstacles as any other company; however, there are some aspects of estate planning that are distinct to the household farm or cattle ranch. If you own a household farm or ranch, and plan to pass it to future generations, mindful estate planning is important to avoid losing your farm or ranch to estate taxes.
A farm or ranch is often at risk for losing assets upon the death of the owner due to the fact that while the estate might actually consist of valuable properties, such as land, it is also regularly greatly in financial obligation. The end result may be that the estate is subject to estate taxes, yet there are no liquid possessions readily available to pay the taxes, forcing the sale of estate properties. The following estate planning tools may help you transfer some of your farm or ranch assets on to future generations prior to your death which will assist prevent estate taxes.
Gifting: Making the most of the yearly gift tax exemption and lifetime exemption can assist pass on the farm or cattle ranch. Simply make sure you understand the existing lifetime exclusion amount so that you do not incur present taxes.