Attorney Bill Oehler recently attended the annual Probate & Trust Law conference in June 2016. In this blog post, Bill shares five things he learned while attending the conference with 900+ attorneys and professionals.
1. Federal estate tax is here to stay (for now). While the politicos decry the “death tax”, there is little momentum to eliminate (or reduce) the estate tax. The feds are discussing valuation discount planning, grantor retained interest trusts, and other “exotic” planning techniques, but the increased (and inflation indexed) federal exemption of $5,450,000 has taken the wind out of the estate tax repeal sails. (Current rates are available here.)
2. Ag homestead rules are a mess. “Ag Homestead” status for properties reduces property taxes and opens opportunities for estate tax savings. But: the ag homestead rules are complex and contradictory, and can change from county to county. Careful analysis is required before changing title to farm properties. (See our blog post on ag homestead here.)
3. Avoiding probate is a little easier now. Minnesota now allows use of a “small estate” affidavit to collect assets valued at up to $75,000 without a probate process (does not apply to real estate), and boat owners can use a “TOD” designation to distribute their boats to their family without probating their wills. Minnesota also has an updated trust law which gives even more flexibility for the use of trusts. (Learn more about small estate process here.)
4. Plan for retirement with a retirement plan! Many retiring farmers face enormous tax risks with the sale of machinery and crops at retirement. In a twist on traditional retirement planning, retiring farmers might consider a “defined benefit” retirement plan to eliminate self-employment tax and stretch out income tax on the sale of stored crops or machinery at retirement.
5. Estate planning comes in many flavors. Over 900 professionals attended the conference, ranging from law professors to general practitioners. The consumer is swamped with dinner seminars, Legal Zoom, and “DIY” estate planning; competent professional advice pays for itself in the long term.
To hear more from Bill or to schedule an appointment, call (507) 288-5567 or send us an email. You can also subscribe to our quarterly newsletter!