Being aware of the potential ravages of the federal estate tax is important if you are serious about preserving your wealth. People who have not looked into the subject are often surprised to hear the details. Right now the estate tax is poised to consume 35% of the taxable portion of your legacy, and this number is scheduled to go up to 55% at the end of this year.
Indeed, these percentages are attention-getting and you must recognize the fact that your real property, including your primary place of residence, is considered to be part of your estate.
There are those who are not in possession of an extraordinary amount of liquidity who do indeed own very valuable tracts of land. Farmers and ranchers routinely fit this description, and in many cases keeping the land (and the business that the land supports) in the family is very important to these individuals.
There are cases when people have to sell the land to pay the estate tax, and this can be a very sad state of affairs.
Fortunately, in many instances you may be able to keep the land in the family through the application of some advanced estate planning strategies. One of these could be the utilization of a Special Land Use Valuation, which is described in Section 2032(a) of the Internal Revenue Service code.
Exactly how to proceed will vary on a case-by-case basis, but if you obtain the proper advice you should be able to position yourself in an optimal manner and you may well be able to keep the land in the family. To have all of your questions answered, simply take a moment to set up an appointment with a seasoned and savvy Hartford estate planning lawyer.