People who are not residents of the state may not be aware of the fact that there are a lot of farmers in New Jersey, and in many cases the farmland has been in the family for generations.
The land may have been purchased long ago when it was relatively inexpensive. Quite a bit of appreciation may have taken place in the meantime and it may have become quite valuable. As a result a farmer who wants to keep the farm in the family may be exposed to the federal estate tax.
Individuals such as these often find themselves in possession of some valuable land without having a great deal of additional financial resources. This can leave the heirs in a position where they have to sell the farm just to be able to come up with the money that is necessary to pay the federal estate tax.
This could have devastating consequences on different levels, not the least of which would be the financial consequences if one or more of the heirs depended on the working farm for his or her income.
Fortunately there are steps that can be taken to mitigate your estate tax exposure if you are a farmer. The IRS allows for a Special Land Use Valuation that can significantly reduce the taxable value of the land as it is being passed on, and this can be part of a comprehensive tax efficiency strategy for a working farm family.
Estate planning for people who run their own businesses can take a number of different forms and require specialized expertise. To gain an understanding of how best to approach your own unique situation, take action right now to arrange for an informative consultation with a seasoned, savvy Somerset County NJ estate planning lawyer.