Family business owners, farmers, ranchers and landowners face unique challenges surrounding how to preserve the family business or farm—a symbol of their heritage. Sadly, over 70 percent of all family businesses don’t survive the transition to the next generation. Estate taxes play a significant role in that problem.
However, estate taxes aren’t the only costs chewing up assets passed from one generation to the next. Probate fees and other settlement expenses can significantly reduce an owner’s legacy. On top of that are the problems surrounding the fair distribution of those assets to heirs.
Land Rich, Cash Poor
The typical farm family is land rich, cash poor. With hundreds of thousands, if not millions, of dollars locked up in equipment, livestock, structures and land, the net worth may be impressive. But when you look at the cash flow, it’s another story entirely.
Estate taxes will be based on the current market value of all your assets. If your heirs can’t readily come up with the cash from other sources, they may have no recourse but to sell the farm just to pay estate taxes and other settlement costs.
Estate Planning Solutions
Your farm or business poses two estate planning challenges:
- How can you preserve it so that you can pass it on intact to the next generation
- How will you equitably distribute it among your heirs?
Achieving these two goals means planning in advance for such expenses as estate taxes, as well as implementing strategies that give you maximum control over how, when, and to whom ownership of your farm transfers. Contact our office for more information about your options.
Also be sure to read more about Business Planning and Asset Protection strategies here.
With the help of the Law Office of Laura Cowan you can ensure that your loved ones are protected and your assets are kept safe even if something happens to you. We create comprehensive estate plans for clients in New York City and we are ready to work with you today to create a plan to ensure your loved ones are taken care of in the event you become incapacitated to pass away. To learn more about the assistance we offer give us a call today at 212-760-2956 or contact us online.