Continuing our look at the twelve most common mistakes agribusiness owners repeat, #9 reviews the difference between estate planning and comprehensive succession planning.
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The ninth of twelve most common mistakes agribusiness owners repeat:
Forget the estate tax just for a moment - not that it doesn’t exist. It does and, depending on whose version of White House politics you believe, it will continue to pose a challenge for America’s agricultural community. But the imposition of estate taxes will not, in and of itself, destroy the family farm. In most cases, a competent estate planning attorney, financial advisor and CPA can help an agribusiness owner avoid, or at least minimize, the estate tax obligation.
Nevertheless, inadequate estate planning is still a major reason most farms do not pass to the next generation. That may sound ridiculous, given that most farmers have some form of estate plan, and there is no record of a single family losing their farm due to the estate tax. Yet, the burden of estate taxes and transfer obligations is not insignificant. The costs can be considerable and the need for cash can be crippling. Transferring the assets of an estate - real estate, business, personal or capital - can cost a substantial amount of money.