Main Menu
Down on the Family Farm: How to Avoid Five Common Estate Planning Mistakes (Part 2 of 5)
Posted in Estate Planning

I’m a farm girl and an estate planning attorney. So naturally, I’m passionate about helping farm families efficiently transfer ownership of their land, buildings and equipment to the next generation. In this five part blog series, I’m exploring several common examples of estate-planning-gone-wrong for farmers. Read on as I address one of the most common mistakes I hear when counseling farm families in the estate planning process.

Mistake #2: “I plan to title my property jointly with my children and their spouses so that it automatically passes to them at death.”

Yes, this avoids probate; however, it also triggers a much higher Indiana Inheritance Tax by creating a transfer on death to a daughter-in-law or son-in-law, who is classified as a “Class B” beneficiary, than would have been due if the property was simply left to the child. From a tax perspective, it is much better to leave the property to the child and allow the child to subsequently add his or her spouse to the deed. But carefully consider that leaving your child outright ownership could make the family farm susceptible to claims by the child’s creditors and subject to division by a divorce court in the event of that child’s failed marriage.

Remember to check back tomorrow to learn about another common estate planning mistake I often hear: “I’m doing nothing because I’m worth less than $5 million,” or the similar reasoning: “Because the wife and I are worth less than $10 million.”

Estate planning is important for all families and business owners, but it is crucial for farmers. If you have questions about the role estate planning plays in your family farm, please contact a member of Bingham Greenebaum Doll LLP's Estate Planning Practice Group.

Did you miss Mistake #1? Catch up here.

Read the next post in the series >>

RSS RSS Feed

Subscribe

Recent Posts

Categories

Contributors

Archives

Back to Page