Some issues to keep in mind when your estate involves Iowa farmland:
- "Death Taxes" - For 2012, the federal estate tax exemption amount is $5M, which excludes are large portion of the individuals dying in 2012. However, for the larger estates, or estates with significant life insurance or retirement plans, there may be some issues. Also, in less than a year, the exemption amount is scheduled to be reduced back to $1M. With just a 150 acre farm, at average values, you potentially have estate tax exposure.
- Disputes - Handling the farm if there is more than one child can be challenging. What if there is one child that is involved in farming and one that isn't? What if neither are involved? What if the kids don't get along with each other? How will decisions be handled in the future when there are multiple owners?
- Expenses - Probate fees and costs in handling your estate may be a substantial expense for some situations. Plan for that contingency or consider alternatives.
- Education - Discussion with family members about information in dealing with the farm can be critical. Are there leases involved? Where are the abstracts located? Why you formulated the estate plan that you did?
There are plenty of problems that are involved, and not always easy answers. With careful planning with an experienced planner, you can hopefully alleviate many of the problems, or at least deal with them the best way possible.