Most farmers and land owners have heard of a like-kind exchange, which goes by several other names, including a 1031 exchange or a tax-free exchange. The primary purpose of an exchange is to reduce the federal income taxes resulting from the sale of real estate.
Attorney Jennifer Denchak Wetzel discusses when to start the farm transition planning process. Her general rule is that when the farm child reaches the age of 30, you should begin transitioning the non-real estate assets
Attorney Jacob H. Kiessling discusses how you may be able to take advantage of stepped-up basis following a death in the family.
The biggest hurdle with farm transition planning is knowing where to start. Attorney Jennifer Denchak Wetzel covers the farm transition planning process and how to begin.
Dividing up your farm assets among your children in an “equal” way can be difficult. Attorney Jennifer Denchak Wetzel explains the options for a fair division of farm assets.
Wondering if you should convert your farm to a LLC? Attorney Jacob H. Kiessling discusses the advantages of an LLC and if it may be right for your farm.
As part of the succession planning process, most farm owners anticipate the challenge of balancing the older (transferring) and the younger (receiving) generations’ financial needs. And, they know that a difficult decision about the fair distribution of assets among the on-farm and the off-farm children is inevitable. However, equally important in the succession planning process, discussing prenuptial and postnuptial agreements (“marital agreements”) comes as a surprise or is uncomfortable for many from a family or moral perspective.
In the closing days of 2017, the federal Tax Cuts and Jobs Act (“Act”) was enacted. Its impact will be felt by virtually every taxpayer on multiple levels. From a farm succession planning standpoint, the most impactful changes include reduction of individual and corporate tax rates, increases in the federal estate and gift tax exclusion amount, preservation of stepped-up basis and continuation of like-kind exchanges for real estate.
In the typical farm family, the parents’ estate plan is as follows: Farm assets to my farm son, Andrew, and non-farm assets in two (2) equal shares to each of my non-farming children, Susan and Charlie. While the intentions are clear, and while the wills that are prepared are clear, it is not guaranteed that such intent will be carried out. What is not clear is that, in such a situation, the will is often times not enough – it does not dictate where every asset will go in the event of someone’s passing.
A successful transition of the family operation and assets to the younger generation is a significant accomplishment, typically marked by a great deal of time and effort.
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