<p>
I’ve seen folks many times a year with the exact some complaints. Some can be fix. Some can’t.</p>
<p>"I’m sorry if you are now scared witless that your $250 might not have been well spent. "</p>
<p>Actually I’m just fine, curm. Thanks for your consideration. Mine IS set up to kick in at death and things are scheduled out correctly for my situation. So it was money well spent. Thanks.</p>
<p>I thought you were smarter than me, you told me that. 
</p>
<p>"You know as well as I that those risks that I outlined happen everyday and cripple the best thought out “plans”. "</p>
<p>Only if the choice is to do nothing ahead of time. As I said some people do it that way on purpose. Doing nothing is a plan the same as doing something. Both have a result. How desirable each result is depends on what you want to happen. </p>
<p>You seem to think once you’ve made a plan you’ll die. Some people think that way in all honesty. They think if they never deal with their mortality, it won’t happen. It doesn’t mean they’re stupid, just afraid. Once you begin to plan and organize things in most cases get alot better. Peace of mind is a wonderful concept.</p>
<p>Let me say this from a lawyer’s point of view: Sometime’s Opies right.</p>
<p>And sometimes Opie’s wrong. The law is actually set up pretty well to see to it that after a person’s death what they probably want to happen probably will happen. And I know people who have paid a lot of cash to have trusts set up which just made everything horrible for their kids after they died, and people who deliberately didn’t even draw up a will - and it was the best thing to do under the circumstances. On the other hand, in the right situation, a full bore A-B living trust is just the thing. It depends on a person’s situation.</p>
<p>Opie, I never said I was smarter than you.;)</p>
<p>And I do hope your plan works out for you.</p>
<p>My mother passed away this past June, and we were talking with her attorney about settling the estate. He said about my father who died 25 years ago, “he really knew what he was doing. I’m in the business and its rare that these things go the way they’re supposed to, especially 25 years in advance.!”</p>
<p>"Opie, I never said I was smarter than you.</p>
<p>And I do hope your plan works out for you."</p>
<p>Thanks. </p>
<p>I do feel for the situations you’ve laid out. I’m not heartless, but at some point if we have “things” we’ve gained throughout life, we have to think about what happens when we’re not here. What people have to understand is things will continue after they are gone in one way or another. It is better to plan something no matter if it’s not 100% perfect. </p>
<p>As far as the fairness of this tax or any tax, I can’t say. I don’t enjoy any tax to begin with, I just try and deal with em.</p>
<p>"Let me say this from a lawyer’s point of view: Sometime’s Opies right.</p>
<p>And sometimes Opie’s wrong"</p>
<p>Kluge, if you left out the opie’s right part I’d you were my wife posting. :)</p>
<p>Being in the business you know something is always better than nothing in 99.9% of the situatons. There will always be a problem here and there, but overall a good plan that “fits” the situation is a wise path to follow.</p>
<p>Opie, right now I have a case where the (adult) kids were pressuring their aged, divorced parents over the division of their estates after death. Dad first wrote a holographic will dividing his estate equally. Then one of the sons got ahold of him and had an elaborate (and unnecesarry) will and trust set up, which was confusing but actually ended up giving that son the right to decide who got Dads estate - including the option of keeping it all himself! They’re all in court now. Mom saw what was going on and just flat out refused to sign any will at all - with the result that her estate will be divided equally between her kids, as she wanted. No litigation there. </p>
<p>I have another case where the Dad wanted his estate to be available for his much younger second wife during her lifetime, then to go to his kids. The property got put into a revocable living trust. Dad died, and guess what happens now? Yeah - the handyman got Dad’s estate!</p>
<p>Seriously, at an Estates and Trusts seminar a few years ago the biggest line of the afternoon was “Litigation over living trusts is the biggest growth area in our practice.” Most of the perceived advantages of many estate planning tools are also weaknesses - avoiding probate is a big problem if someone doesn’t want to follow the testator’s wishes - what do you do then? I’ve seen many examples of people who thought that because their parent had a living trust they “didn’t have to do anything - it’s all taken care of.” --WRONG.</p>
<p>Seriously - competent estate planning is a good idea, particularly in families with small children. But no “estate planning” at all is better than a lot of the things people come up with. With no will or trust the probate court will make sure that the estate is identified, inventoried, any applicable taxes paid, and the estate distributed the the usual object of a decedent’s bounty – their children, in equal shares, at what I think is a reasonable administrative cost. I’ve seen lots worse than that.</p>
<p>I think Kluge and Opie and others posting understand what I’m saying but there may be some lurkers confused so - I am not arguing that people should ignore estate planning and any and all tools and resources available to them. My beliefs are quite to the contrary, actually. </p>
<p>I just don’t like estate taxes on family ranches and farms (and even on small businesses but that is NOT my topic here).</p>
<p>I believe that some amount of blame can be placed on the estate tax (and estate tax considerations and decisons made so that folks can avoid estate tax) for the decline in the number of family operations. (I don’t have percentages and the effects of tax fear may be subtle , not direct cause and effect). </p>
<p>It may be that we are already too far down the road, and I think Kluge believes that I’m closing the barn door after the cows are already long gone. </p>
<p>I just think it’s worth a shot to save the ones that are left and being able to pass a ranch down with zero consideration of an estate tax could help. I’m not trying to play any angles, and would be willing to consider limitations and checks to ferret out those that intend to defeat my intent and build condos. In my state when you take land out of ag production you are responsible for the higher market value property taxes for prior years (charge-back). They find a way to enforce that. I believe that something could be worked out about disallowing the stepped up basis in the event of a sale for non-ag use. </p>
<p>There is a movement afoot among those concerned with the loss of our wilder lands to place large tracts of land in “conservation trusts”. I’d like to see that expanded. Some entrepeneurs concerned with ranch life disappearing are selling small homesites on large ranch tracts to both make some money and keep from cutting up large tracts into 20 acre patches that are by and large unproductive. I think that that may be a partial solution, too.</p>
<p>I’d like us to do something before they are all gone. I just don’t believe factory farms and ranches are the best thing for us as a country (in fact I think it’s dangerous for the reasons I stated earlier in the thread) and I’m willing to forego that estate tax revenue to encourage the owners to continue family ownership.</p>
<p>'mudge - most of that works for me. I’d probably want to put a ceiling on the size of the “family” farm, and want a recapture (with interest) if and when the farmland was sold. But I do think it’s too late - agribusiness won this battle years back, and it wasn’t the estate tax that did it. Even family farmers buy their food at Safeway - times have just changed. Recent generations see a better life off the farm, for the most part.</p>
<p>I do agree that there are land use issues here - but that’s a thorny subjetc best approached head on.</p>
<p>kluge, You are probably right about it being too little, too late but have your ever heard Jerry Jeff Walker’s song “Contrary to Ordinary”? I don’t mind tilting at a few windmills now and again. Hell, what else am I gonna do? ;)</p>
<p>I get my eggs from one neighbor, some vegetables from another, and we raise a good bit of our meat. But we do have flush toilets and 'lectric lights. </p>
<p>
We’ve tried this Toostise #2 situation twice in the last decade. Tried the second wife cutting out the first marriage kids in favor of her kids three times, too. (My partner is a CPA, JD, LLM. in Tax, Board Certified in Estate Planning and Probate. I just carry the heavy boxes and do the talking.
).</p>
<p>That should read “Tootsie #2”. Sorry.</p>
<p>Kluge,</p>
<p>I would ask in the first situation what do you think would have happened without anything? I think that one is a stink bomb no matter how you wrap it. In some ways it’s dad paying the price of his parenting. The best thing you can pass on to your children is character, he may have failed there. </p>
<p>In the other with the younger second wife, well, what can I say? Wrong head working. </p>
<p>Now that I think we are all in better agreement over some kind of planning in most cases is better than none, but not without it’s problems as well. </p>
<p>I’m for a higher starting point for estate tax scales and I think most politicals are as well. However, one could argue a families flower shop is just as important as another’s dairy farm, so I would maybe apply something similar to a stock redemption at death. Say wiave a certain level of tax provided the business remains at least at 65% of it’s size (valuation) at death for 10 years. This would allow for some dropoff in business at death and allow for some selling of assests along the way, but keep the business together for a decade and save some tax money. I think the estate tax will return but will offer some flexibility along with considerations for certain industries.</p>
<p>I am pretty much where Kluge is, but I note that the tax code already contains: (1) a pretty generous 10-year term payment provision in the tax code where a family business (or farm) constitutes more than 35% of the taxable estate, and (2) an alternate valuation rule that permits farms and family businesses to be valued as going concerns, not as assets to be sold to the highest bidder (e.g., a developer). I’m not saying the tax doesn’t bite and the exemptions shouldn’t be higher, but most of what people say the rules ought to be are already there.</p>
<p>I do dislike irrevocable insurance trusts, though. People make rational judgments based on the information they have, and five years later the facts change on them. The perfect son becomes a drug addict. The beneficent family advisor dies suddenly and there’s no good replacement. Dad assumes he would be running the business forever but then gets an offer he can’t refuse.</p>