Proposed "death tax" may kill the family farm?

[Limomike]

Well you can do it as my family has always done! You can sell it to your son or daughter before you pass when things get bad just like a car. You determine what you want to sell something for so the government has no say so then.

Its not the "selling" of the land that kills you in the death tax penalty.. its the valuation of the land and property is what they go by at the transfer of it.

 

[greybeard]

I didn't read it all, but you can legally gift a set amt (cash and/or property) each year to your offspring tax free, instead of waiting till ya pass on and do it all. It's one way to get your total assets down below the $1 mil threshold.

 

[Nite Hawk]

Greybeard
Sounds like possibly a good way to get around some real "killer" taxes..
Nite Hawk

 

[Bigfoot]

Can you still sell a family member your home and farm, and give your self a lifetime estate? Continue to live there and work there uninhibited untill your death. My family I trust with my life. My inlaws not so much.

 

[Commercialfarmer]

I was thinking about this today, the decrease in value, increase in percentage taxed along with monumentous inflation is going to be very bad.

 

[larryshoat]

THats the part I was missing. I forgot about the stock ownership. I incorporated too many years ago and haven't thought about the stock side since then

Yeah but couldn't you give the kids a larger portion of the stock each year, for a gradual transfer?

I'm thinking land that we buy in the future, if any, will not be put in my name. As Bigfoot says if something God forbid happens to your child then the inlaws will own it.

We went through this a few years back and I'm the kind of person that can think of one possible problem after another becoming increasingly obsessed with details. I can see with what's coming that we're going to have to come up with another plan.

Larry

 

[Jogeephus]

As Bigfoot says if something God forbid happens to your child then the inlaws will own it.

Would this not be the parent of your grandkids? And wouldn't you want your grandkids seen about? Just asking.

I think the choice is yours. There is 100% certainty that if you do nothing the government will seize half of your estate and blow the money on stupid stuff or you can take the risk that your children learned something from you and hopefully married someone of equal character and will take what you've left them and put it to good use.

Here is another scenario. Say you've gifted 20% of the ownership shares to your son and he dies. Your DIL then gets hooked on dope and wants money to run off with a migrant worker to Oklahoma or something. Who in their right mind would want to buy 20% ownership in land where they cannot exercise their rights ass owner. No one. So that leaves her having to make a fire sale to someone inside the family and to prod her on her way you can also remind her that her share of the land taxes are due before the end of the month. ;-)

 

[larryshoat]

As Bigfoot says if something God forbid happens to your child then the inlaws will own it.

Would this not be the parent of your grandkids? And wouldn't you want your grandkids seen about? Just asking.

I think the choice is yours. There is 100% certainty that if you do nothing the government will seize half of your estate and blow the money on stupid stuff or you can take the risk that your children learned something from you and hopefully married someone of equal character and will take what you've left them and put it to good use.

Here is another scenario. Say you've gifted 20% of the ownership shares to your son and he dies. Your DIL then gets hooked on dope and wants money to run off with a migrant worker to Oklahoma or something. Who in their right mind would want to buy 20% ownership in land where they cannot exercise their rights ass owner. No one. So that leaves her having to make a fire sale to someone inside the family and to prod her on her way you can also remind her that her share of the land taxes are due before the end of the month. ;-)

Yes, but at this point I don't have grandkids, when they come along it will require a different strategy. I think this kind of planning needs to be revisited every 5 years or when there is a major law change. I get your point, but I'm not sure we're at that point yet, but it's been 5 years and I can see we're going to have to come up with something different. I like the stock idea because that can be gradual.

Larry

 

[Jogeephus]

Yes, the stock is a good way because they don't really even have to know they own anything this can all be in your files. Its not until you pay out dividends does the stock even have to be mentioned so you can hold this close to your chest and if for some reason things are not panning out the way you wish then the stock can magically be put somewhere else. Don't know if you've ever noticed this or not but the government typically uses your own paperwork you submit to them to hang you with and there is a lot you can do in house before you ever have to divulge anything to them if you get my drift.

 

[larryshoat]

Yes, the stock is a good way because they don't really even have to know they own anything this can all be in your files. Its not until you pay out dividends does the stock even have to be mentioned so you can hold this close to your chest and if for some reason things are not panning out the way you wish then the stock can magically be put somewhere else. Don't know if you've ever noticed this or not but the government typically uses your own paperwork you submit to them to hang you with and there is a lot you can do in house before you ever have to divulge anything to them if you get my drift.

Yeah going to be a lot of head scratching and a lot of appointments at the law office the way things are headed.

Larry

 

[Nite Hawk]

Make sure you deal with a law firm that is up on these matters, as some are plain rip offs and don't know too much of anything even though they claim to.
If I were personally in this situation, I would rather somehow try to get it into my kids name /in a land trust, or something- than have the government take it and blow the money on some weird project they are famous for...
Just my personal take on the issue.
Nite Hawk

 

[Jogeephus]

I think Obama's net worth is around $3.5 million as he is on record as saying he would like to see the death tax exemption being raised to $3.5 million. Of course this might be increased once his new book, "I Parted the Seas" hits the bookstore cause its sure to be a big hit what with the 36 color Crayon set that is included.