Estate Planning: OverviewBy: Breana Behrens
Over 70% of land in the lower 48 states is held in private ownership, rendering private landowners one of the most influential stewards of our country’s land and natural resources. However, due to the ever increasing average age of private landowners our courntry will experience a massive intergenerational land transfer over the next few decades. How you deal with this transfer will impact the look, natural resources, and economic viability of rural communities across the country.
What you do with your land while alive is just as important as the plan that you make for how your property will be used after your death. In order to keep your working landscapes and family businesses viable for generations to come, you should consider implementing some of the estate planning and conservation tools available to you.
Large parcels of working and non-working landscapes tend to be hard to pass down for a variety of reasons:
1. Land is not liquid. Farms, ranches and forest landowners tend to be land rich, but money poor. A large parcel of land may put your estate in a high tax bracket, but without liquid assets your heirs may have problems paying estate and transfer taxes when obtaining your land after you pass. In many cases your heirs may have to sell off part or all of the land in order to pay these taxes. This invites the risk that it will be sold to developers and subdivided.
2. One parcel, multiple heirs. Estate planning is essential to preserving your working landscape and business when you have more than one person to pass your assets to. If you do not have a plan for who gets what and a plan for how the property and business will be managed, it is likely that your heirs will sell the property to reduce discord among themselves.
3. The uninterested party. Even if you are able to devise a plan that allows you to transfer your property to multiple people, what happens if one person is not interested in taking part in managing the land or running the business? Do you have a plan to take care of all your heirs?
The Conservation Tax Center is here to help. First, review some of the articles on our estate planning webpage to get a general overview of your options. Second, use our YellowPages directory to look up professionals in your area that can aid you in making an estate plan.
Things to Consider
- What are your goals for your property, now and after you pass?
- What are your family dynamics and expectations?
- In terms of running the business?
- Have you talked to your family and heirs about your wishes?
- How are you going to transfer your wealth of knowledge that you acquired about the business and land?
- What is the financial viability of your business?
- What is the ecological nature of your land?
- Would you like to transfer your land and business while alive or after you pass?
Estate planning involves much more than just drafting a will and paying taxes. When done correctly, estate planning can ensure that the business you’ve created and the land that you treasure is maintained as a viable working landscape for generations to come.