Creating the right estate plan for a business is never really easy – identifying the right succession plan and allocation of assets requires careful thought and consideration. This is particularly true for Massachusetts farming families, who have been consistently threatened with losing land because of estate planning requirements in the state. Now, legislators are working to address some of the tax issues that have pressured family farms into increase financial strain during the past several decades.
In Massachusetts, legislators say they are seeing acres of actively farmed land being sold off to meet tax obligations when the owner of the land dies. This is because the land is often valuated at the “highest and best use” cost – and much of the land is more valuable to developers than it is as farmland. Lawmakers say that this “highest and best use” standard for valuating a piece of land is not appropriate for agricultural purposes. They are looking to create a different set of taxable estate rules to protect family farms and related assets.
These lawmakers say that family farmers who inherit their land generally do not have available liquid assets to pay taxes, so they end up selling off part of their land. This property transfer can negatively affect residents of the entire state because of shrinking agricultural capacity. Selling land that is vital to the farming operation should not be necessary simply because of a lack of tax exemptions and appropriate protections.
Farmers and other key participants in our state economy deserve estate administration protection to keep their land in the family. To make sure this happens, visit an estate planning expert to provide you with all the information you need about estate tax. Financial and legal professionals can help you protect your assets for generations to come.
Source: The Telegram, “Legislation aims to keep Mass. family farms alive and well,” Bradford L. Miner, March 19, 2017