Farmers Exemption from Estate Taxes

Wednesday, August 19th, 2009

U.S. House of Representatives (H.R. 3524) recently introduced a bill that will exempt family farms from federal estate taxes if the farms will stay with their respective families.  The bill is called Family Farm Preservation Conservation Estate Tax Act.  It was assigned to the Committee of House Ways and Means after being introduced by (D-Colo) Rep. John Salazar and (D-Napa) Rep. Mike Thompson.

According to Laurel Brown, the spokeswoman of Thompson, “The bill would defer estate taxes on conserved and agricultural land indefinitely, so long as it still remains in the family - this ensures that nobody would have to sell the land just to pay for the estate taxes.  Then Murray said that “So many family farms have been struggling until now.  This bill will encourage farms to remain in the family’s possession.  There aren’t too many left.”

The law governing agricultural estate taxes is expiring next year.  It’s expected to be replaced by another law in 2011 that would tax families blending the levels of 2001 and 2002.  This level is hard for a lot of family farms, which are typically asset rich yet cash poor.

The new estate legislation was endorsed by 28 farm organizations including Western United Dairymen, Western Growers, California Association Winegrape Growers, and California Farm Bureau Federation.

Tags: agriculture, bill, estate, estate taxes, farms, federal, John Salazar, Laurel Brown, law, legislation, Mike Thompson, U.S. House of Representatives
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Planned Giving: A Noble Goal

Monday, July 13th, 2009

Jim Taylor gave away his house to charity.  He’s not rich, but he did not become homeless too.  This 83-year-old man continues to live in their rambler (4-bedroom), that he bought in 1977 when he and his late wife moved to Onalaska.  He retired in 1990 as Dairyland Power’s head, and said that he has built a nest egg big enough to be comfortable (although not rich).  Although they own their home in Onalaska, their children were already grown and with their own homes as well.

Since Taylor and his wife received good care from Gundersen Lutheran, they now wanted to contribute something to the hospital.  So what they did was call up the Medical Foundation and asked them if they need a house.

The executive director of the foundation, Phil Schumacher, explained that the Taylors can live in the house as long as they want.  Then, after their death, the foundation will own the house and can sell it as their property.  This planned giving will not affect the estate taxes of Taylor or be tied in probate, so their kids don’t need to worry about anything.

Meanwhile, Taylor enjoys a good tax deduction and the fulfillment that he has helped out an organization that he loves.  As for his heirs, he said, “They will inherit the rest of my life savings, or what’s left of it.”    

Tags: charity, Dairyland Power, estate taxes, Gundersen Lutheran, hospital, Jim Taylor, Medical Foundation, Onalaska, Phil Schumacher, Planned Giving, probate
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Your Will Needs to Change

Friday, July 10th, 2009

Since there is a recent decline in properties and personal portfolio, these can affect your asset proportions.  Now would be a good time for you to check if the financial logic behind estate plans and wills still holds.

Rita Brown, estate planner and CPA, said “You cannot really change your will every time there’s a fluctuation in the stock market.  However, if you want your children to have a specific amount of money, and your stock portfolio today no longer allow that, then it’s time to make a change.”

A will can spell out the nomination of an executor, guardian for minor children, any specific gifts, and beneficiaries of your assets.  Software or books are available for any basic will although it’s still necessary to hire an attorney as your accounts and properties become more complex.

When you deduct all your debts from your property’s fair market value, you’ll get the value of your estate.  Also, the value determines whether the beneficiaries will be charged with capital gains taxes and whether there will be estate taxes when you pass away.

For 2009, an estate’s first $3.5 million ($7 million for couples) will be exempt from estate taxes.  Also, there’s a gift tax with $1 million lifetime exemption.

Tags: attorney, debts, estate planner, estate taxes, fair market value, Rita Brown, stock market, stock portfolio, will
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