Texas Farmers, Ranchers and Business Owners Need Estate Planning Now

October 26, 2012 (Press-News.org) If you are a farmer, rancher or small business owner, you may not feel like one of the richest Americans. The government may tax you like you are though when it comes time to pass your family inheritance down.

It is incredibly important for Texas farmers, rancher and business owners to prepare a comprehensive estate plan to protect what they built so that it does not end up belonging to Uncle Sam. In order to ensure the legacy you fought for, take the time before the end of the year to plan for the future of your family for generations to come. Right now there are favorable tax rules in effect; these rules may well change in 2013.

$5.12 Million Gift and Estate Tax Exemption in Effect Through 2012

When you die, your estate is calculated by adding all your property, including real estate, business ownership, vehicles, equipment, livestock, crops, stocks, bonds, bank accounts and personal effects. For certain taxation purposes, it may also include proceeds from your life insurance policies. It can also include the value of any gifts you made over your lifetime that would have been taxable if it were not for your gift tax exemption.

A certain portion of your estate and gifts are exempt from federal taxes. If your estate is worth less than the exemption amount, your heirs will not have to pay federal estate taxes. If your estate is worth more than this amount, your heirs will have to pay taxes on the excess value.

Estate and gift taxes change throughout the years, and they can also be modified by Congress. For 2012, the federal estate and gift tax exemption is $5.12 million. However, if Congress does not act, the exemption will revert to the 2002 level of $1 million on January 1, 2013. The current top tax rate of 35 percent will increase to 55 percent.

What does this mean for you? If your estate is over $1 million dollars, you must act quickly to take advantage of current tax rules and protect your heirs. One popular strategy is to make sizable gifts under the current generous exemption limits. This reduces the size of your estate and reduces the impact on those who come after you. There are other options which allow you to maintain control of your assets during your lifetime.

Don't Wait Until December. Talk to a Texas Estate Planning Attorney Now

While you may not feel like a millionaire, as a farmer, rancher or business owner, you likely have assets you are not considering. You can believe the government will consider everything possible. Money which is tied up in land, equipment or other business assets is as much a part of your total estate as the cash you have on hand or in the bank.

Don't wait until December; act now to take full advantage of the current tax rules. Make sure your hard-earned farm, ranch, business and dollars go where you want them without huge penalties.

Article provided by Law Offices of Bob Leonard, Jr.
Visit us at www.bobleonard.com