Some people are going to have different concerns than others when it comes to estate planning. One of the first things to prioritize when you are evaluating your situation is going to be whether or not your estate is exposed to the federal estate tax.
There is a particular quantity of resources that can be passed along before the tax kicks in. Right now this exclusion stands at $5.12 million, but it is going down to just $1 million at the end of this year. The rate of the tax is rather astonishing if you’ve never looked into it. At present the maximum rate is 35%, and it is rising to 55% in 2013.
When you are inventorying your assets it is important to understand that your real property counts as part of your estate for tax purposes. So people who are involved in land-based businesses such as farms and ranches may be in taxable territory because of the value of their land without having stored very significant assets other than the land.
The heirs of people who are in this situation sometimes have to sell the land in order to pay the estate tax. So, farmers and ranchers who want to keep the businesses in the family must be proactive about planning ahead intelligently.
There are things that you can do to reduce the taxable value of your land, such as the utilization of a Special Land Use Valuation. To explore your options as a farmer or rancher, the intelligent first step is to sit down and discuss your unique situation with a licensed and experienced Indianapolis estate planning lawyer.
Mr. Kraft assists clients primarily in the areas of estate planning and administration, Medicaid planning, federal and state taxation, real estate and corporate law, bringing the added perspective of an accounting background to his work.