is part of the Division of Informa PLC

This site is operated by a business or businesses owned by Informa PLC and all copyright resides with them. Informa PLC's registered office is 5 Howick Place, London SW1P 1WG. Registered in England and Wales. Number 8860726.

  • American Agriculturist
  • Beef Producer
  • Corn and Soybean Digest
  • Dakota Farmer
  • Delta Farm Press
  • Farm Futures
  • Farm Industry news
  • Indiana Prairie Farmer
  • Kansas Farmer
  • Michigan Farmer
  • Missouri Ruralist
  • Nebraska Farmer
  • Ohio Farmer
  • Prairie Farmer
  • Southeast Farm Press
  • Southwest Farm Press
  • The Farmer
  • Wallaces Farmer
  • Western Farm Press
  • Western Farmer Stockman
  • Wisconsin Agriculturist
Protecting Your Estate

Protecting Your Estate

Do you want your farm or the IRS to get your hard-earned money upon your death? A veteran tax professional lists 10 questions to take to your estate planning advisor.

"In a lot of ways, estate tax is voluntary if you do enough planning, says Christopher Hesse, LarsonAllen, Firm-wide Tax Resource Group. Hesse spoke Monday during the American Farm Bureau Federation annual meeting in Honolulu, Hawaii.

He discussed 10 questions farmers should get answered in order to protect their assets.

  1. How to determine taxable estate.
  2. Current tax rate and exemptions.
  3. Should I hold my assets in a trust?
  4. Will giving away assets avoid estate tax?
  5. How to give assets to kids.
  6. How do I keep my estate plan flexible?
  7. What is basis step-up in the farm context?
  8. Should I purchase life insurance?
  9. How do I keep my estate from appreciating?
  10. How do I divide my estate between on-farm and off-farm heirs?
Christopher W. Hesse

The problem in determining taxable estate is the fact that the current exemption is $5.12 million. But it drops to $1 million in 2013. "We don’t expect Congress to keep it at $1 million but with an election year Congress may wait until 2013 to take action on it," says Hesse. "It’s hard for Congress to plan at this point since they don’t know what the regime will look like."

Anything you can do in a trust to protect assets, you can do it a will, stated Hesse. However, a trust might reduce probate costs. Important thing is beneficiary designations. Such things as second marriages, divorce can raise issues. "Make sure beneficiary designations are changed in all documents – trust, wills, life insurance, IRAs, etc."

Discussing stepped-up basis, Hesse drew laughter from the audience when he stated, "Timing is important. It’s better to die after harvest and before the crop is sold. If corn is $7 at harvest, that’s the basis for the corn income. And if the spouse sells the corn for $7.10, 10 cents is income. If it is sold for $6.50, it’s a 50-cent loss."

Finally, evaluate "fair" versus "equal" in bequeathing assets. "It might be more fair, but not necessarily equal, to give more to kids who helped you grow your assets.

The important thing is to plan."

Hide comments


  • Allowed HTML tags: <em> <strong> <blockquote> <br> <p>

Plain text

  • No HTML tags allowed.
  • Web page addresses and e-mail addresses turn into links automatically.
  • Lines and paragraphs break automatically.