Giving away the farm

While talking with Attorney Kim Maloney who specializes in agricultural land transfers, I had a question about inheritance. “I have a will which dedicates all of my worldly assets upon my demise, to my daughter’s. In the case of a farmer, can he gift or, let’s say sell his farm to his children for, say, one dollar per acre? Do you ever run into that kind of thing? They can do that and I think this is where the family partnership and the gifting over time can be a benefit because what is going to happen with your estate depending on the size of it, when you pass and it gets transferred, you will be charged estate tax if you have a significant amount of property and land and value. So by doing this gifting over time, you have the opportunity to, I think it’s $15,000 worth per person per donee every year so you have the opportunity to transfer these assets while you are still living without giving up control necessarily. You can stay as the majority owner of the family company, you can stay on as the manager, you can stay on as the operator of the farm. But you are allowing yourself to make these transfers over time and save some of that tax.”