Attendees of the American Farm Bureau Federation’s 93rd Annual Meeting picked up advice from Christopher Hesse on how to protect their estates. Hesse is a CPA with Larson Allen Firm-Wide Tax Resource Group and a partner in a family farm. According to Hesse, proper planning is critical. The current death tax exemption for 2012 is 5-million dollars. While Congress is expected to extend the current exemption to 2013, Hesse warns that if this is not the case, it will be reduced to 1-million. Any amount over the death tax exemption is subject to a taxable amount of 55 percent of the asset’s present value.
Hesse says one option is to start reducing total net assets through annual gifting. The government currently allows gifts up to 13-thousand dollars to be given to one individual without being taxed. But Hesse cautions, – one of the things people sometimes don’t realize is that if you just change your will, if you have an estate trust, the changes you make in the will do not effectively change the estate trust