November, the IRS announced the revised federal estate tax and gift tax limits
for 2019. The 2019 federal estate tax
limit will increase from $11.18 million to $11.4 million. The federal gift tax limit will remain at
$15,000. In Maryland, state estate tax
limits will increase to $5 million, up from $4 million in 2018.
Wind turbines on farmland in Iowa. Image by Mark Hesseltine from flickr.com.
The article is not a substitute for legal advice.
Developing a farm succession plan that allows the next generation to take over the farm and provides for non-farm heirs is not an easy task. Often you will want to treat your children equally but keeping the farm viable for the next generation may not allow for equal treatment. Dividing the farmland equally may result in one heir getting fewer acres needed to support a family. Your heirs are human and will potentially carry grudges against a sibling. A recent decision out of Iowa highlights what can happen when a farm succession plan fails. In Gent v. Gent, Thomas sought an injunction from the Iowa courts to limit how his brother, John, could utilize family farmland John had leased. John had initially leased the farmland from their parents for twenty-five years. This court decision highlights why families should work to develop plans that work towards their goals. There is no one size fits all approach in this process and families will have to understand that communicating, goal setting, and adopting can be important in this process. Continue reading →
Many of you may not remember John McLaughlin the host of the long-running public affairs show The McLaughlin Group, for those that do not the video clip above will give you a taste of his show. McLaughlin passed away in 2016. Before passing away, Mr. McLaughlin had divorced Christina Vidal, his wife, in 2010. After this divorce, Mr. McLaughlin neglected to change two life insurance policies beneficiaries from his now-ex-wife to an immediate family member. In late 2017, the federal district court in D.C. ruled that his estate is the sole beneficiary of the life insurance policies. The outcome, in this case, was favorable to the estate, it is an important reminder that you need to update beneficiaries after important life events. Continue reading →
Many of you have farm succession plans or estate plans that may handle issues related to on-farm heirs and off-farm heirs. But have you communicated decisions in these plans to both sets of heirs? An interesting case out of North Dakota, In re Estate of Feldmann, addresses that issue. In this case, the Supreme Court of North Dakota agreed that testimony showed the father had gifted all the farm equipment to the on-farm heir and was not apart of the off-farm heir’s share of the estate. The on-farm heir was also entitled to the wheat crop growing on the inherited farmland. The off-farm heirs were only entitled to proceeds from the wheat crop harvested at the time of the dad’s death. Families should discuss these issues to make sure that everyone is on the same page, so heirs understand how the property will be treated at death (or when it is gifted to another heir) to reduce tensions. Continue reading →
Editor’s note: Based on the passage of the Tax Cut and Jobs Act this post is no longer correct. I will provide an updated post soon.
This is not a substitute for legal or tax advice.
In October, the IRS announced the revised federal estate tax and gift tax limits for 2018. For 2018, the federal estate tax limit will increase from $5.49 million to $5.6 million. The federal gift tax limit will increase from $14,000 in 2017 to $15,000 in 2018. In Maryland, state estate tax limits will increase to $4 million (up from $3 million in 2017). Continue reading →
For anyone not paying attention, late last month the IRS announced the revised federal estate tax and gift tax limits for 2017. For 2017, the federal estate tax limit will increase from $5.45 million to $5.49 million. The federal gift tax limit will remain at $14,000 for 2017. In Maryland, state estate tax limits will increase to $3 million (up from $2 million in 2016). Continue reading →