Estate planning is an important aspect of growing older. If you want to protect your property and real estate, then estate planning can help you do so.
Transferring your property to your heirs and family may be easier than you think, especially if you opt to use a succession plan and estate plan to protect your assets and avoid unnecessary taxation.
How a succession plan helps you pass on a farm
A succession plan gives you a formal method of passing on your farm to your heirs while allowing them to continue running it. You can pass on a business in a few ways, either by allowing an heir to take over before you retire, passing on the business at death or selling the business to another party.
As for other real estate, like your home or vacation home, you may want to consider placing those assets into a trust to pass them on to your heirs. You may also consider adding an heir as a co-owner, so the home is in their name, or use a qualified personal residence trust to move a home into their name later.
Why do you need to plan in advance to pass on your farming business or real estate?
It’s important to set up a succession plan and to have an estate plan in place to make sure your heirs face minimal taxation when you pass on a business or piece of real estate. If you’re passing on a business, starting succession planning can help you bring someone into the business and teach them how to run that business prior to you retiring or passing away.
Planning in advance for either of these circumstances lets you do what is best for you and your family, so you know that your assets will stay in the family and be used for the purposes that you intended. It’s a good idea to start with a basic estate plan for personal property and to use succession planning to address how you’d like to pass on your business to those who will run it in the future.