Agriculture in Nevada is a large industry that is comprised of family farms and ranches across the state. Readers who are both farmers and interested in planning an estate may be interested to learn about recent changes to the inheritance tax in another state. This change is just one of many trends in estate planning that should be considered while planning for the future.
The decision to leave a ranch or farm to heirs is a complicated one for many families. This can be due to the multiple children that may have to divide responsibilities for running the business after the death of a parent farmer. In addition, at least until recently in one state, the children who were left a farm or ranch had to pay extremely high inheritance tax payments when they inherited the farm.
The inheritance tax led many in that state to dissolve the business to pay the tax rather than continuing to run the farm. To avoid this outcome, some families arranged to have the farm sold to the children and responsibilities divided before the death of a parent. This arrangement was added to the estate plan of an individual, as they benefitted from a life estate on the land rather than leaving the property in a will or trust.
The recent change for those affected farmers has made it easier to create an estate plan that is intended to keep the family farm or ranch in business after a death. The reduction in the inheritance tax will affect approximately 63,000 farming families. If a person planning an estate in Nevada intends to leave a farm to their heirs, they may do well to review all applicable laws to maximize the chance that the farming business can last for generations to come.
Source: newsworks.org, “Inheritance tax for Pa. farmers is no more,” Jen Howard, July 5, 2012