While this blog has reported extensively on estate taxes and the need to plan ahead in order to minimize the tax burden for future heirs, it is especially important for Florida farmers to plan ahead.

As we've previously reported, if Congress doesn't act, the estate tax exemption will decrease from $5.1 million to $1 million, and the tax rate on that estate will increase from 35 percent to 55 percent. And this could be especially dangerous for farmers who think they will just be able to pass their estate on to their children, because the land values are increasing quickly.

If a farmer is not prepared for a massive estate tax bill to come do once he or she passes away, the beneficiaries may have to sell the farm just to pay the bill. And a farm management specialist at Iowa State University says that one of the problems for farmers who want to transfer their property is that younger generations are losing interest in becoming farmers.

For those who have beneficiaries who want to receive the property, experts recommend having strong, open lines of communication amongst family members.

Along with being able to transfer assets (which can include livestock), labor and management decisions, a farmer has to be able to give up some decision making ability. There also have to be decisions made about whether the farm wants to grow or remain stable, and that can depend on how many heirs there are.

In order to keep a farm viable for a younger generation, it is important that planning decisions are made as soon as possible. Even if one is not ready to give up control, they need to have a succession plan in mind.

Source: Drovers Cattle Network, "Will your agri-legacy be a monstrous estate tax bill?," Stu Ellis, Feb. 17, 2012