Taxes don’t destroy family farms – people do, says Polly Dobbs, an estate planning and wealth transfer specialist.
“It’s not Uncle Sam – it’s your third wife and your kids from your first two wives, it’s your kids in the city versus your kids on the farm, and it’s ultimately your failure to plan for all that because you don’t want to hurt somebody’s feelings,” she explains. “It’s very lazy to say that taxes ruin the farm. That’s rarely the case.”
All the details matter, says Dobbs with Dobbs Legal Group LLC. She doesn’t believe in sugarcoating the hard truth. That’s why she’s devoted her career to helping farm families navigate estate planning and wealth transfer.
A “Permanent” Estate Tax
On July 4, President Donald Trump signed into effect the One Big Beautiful Bill, which has a significant effect on federal taxes, credits and deductions.
When it comes to gift and estate taxes, Dobbs points out a big change under the Internal Revenue Services (IRS) section.
“The new exemption as of Jan. 1, 2026, will be $15 million per person, or $30 million for a married couple,” she said at the Keystone Cooperatives Co-op Classic in Valparaiso, Ind. “It is one exemption. You either use it during your lifetime to make gifts, or you have it available at death to shield inheritances. You don’t get two.”
This is an increase from $13,990,000 per person in 2025, and a welcome relief from the anticipated “drop off the cliff to around $7 million per person that was looming,” Dobbs adds.
Unlike the Tax Cuts and Jobs Act from 2017, she says the exemption is considered permanent in that it doesn’t have a “self-destruct, sunset date.” However, she warns farmers not to get too excited about the “permanent tax act” because any future Congress and President can change any law on the books.
The new exemption will be indexed to inflation, she adds, and with adjustments made Jan. 1 every year beginning in 2027. IRS recently announced the tax year 2026 annual inflation adjustments for more than 60 tax provisions, including the income tax rate schedules and other tax changes. The annual gift tax exclusion will remain $19,000 in 2026, unchanged from 2025, which is the amount each donor can give to each recipient, without tapping into his or her big exemption.
“During the fourth quarter of every year, we’ll get inflation numbers, and we will know what the new exemption is going to be the following January,” Dobbs says. “It is nice to know there’s no ticking clock on this tax act. We can stop worrying about this dreaded sunset that was to happen at the end of 2025. The fact they got ahead of this and did it in July of 2025 is a gift.”
Dobbs has been working in gift and estate tax laws for 25 years and says there has never once been a permanent tax act.
“This is important information,” she says. “But that’s the caboose. It is not the engine that should be driving the decision making about the farm’s succession and estate planning. Family goals come first.”
