RUPERT, Idaho — Family circumstances and federal laws affecting estate planning seem to fluctuate like the weather.
“It’s hard to keep up with it all, so you need a lawyer to help develop a strategy for keeping assets in a family for future generations,” says John “Bert” Stevenson, 81, a second-generation farmer near Rupert in southeastern Idaho.
“We have farmland in our family from the 1940s and want it to stay in the family,” says Stevenson. “We don’t want to have to sell it to pay estate taxes one day.”
Stevenson says the family’s irrigated farmland has appreciated significantly in value over the years.
“We have to know what the tax implications of that are and how it affects distribution of our estate.”
Stevenson says a person’s estate planning often changes with age.
“When you’re in your 50s, you think about your wife and kids. Then your kids marry, and the grandkids come along. That plays into how you make distributions. A lot of times, you know what you want to have happen, but certain laws have restrictions you might not be aware of until you get legal advice.”
To get advice, Stevenson turned to an attorney who specializes in estate planning, Don Chisholm in Burley.
Chisholm, 75, has been writing estate plans for 50 years. He urges people to have a plan to avoid family conflict.
“Without a plan, sometimes factions within a family disagree about how to treat everyone fairly,” he says. “Don’t assume heirs will figure it out.”
Many of his clients are farmers and ranchers who have accumulated significant assets from decades of toil.
With proper planning, they can avoid federal estate taxes and pass those assets on to family members or disburse them within the family or donate to a charity.
Chisholm has advice when it appears likely that the combined estate of the husband and wife exceeds the effective estate tax exemption.
“Before the estate planning documents are drafted, the clients, the clients’ attorney, and the clients’ accountant should meet to discuss the value of the assets, the federal estate and gift implications, and the general plan for distribution of the estate on the deaths of the first and second spouse.”
Most importantly, a will or trust should be understandable, he says.
“I’ve had frustrated people come in with an unnecessarily complex trust several hundred pages long that they can’t understand,” he says. “Many times, a will and probate can accomplish the same goals as a trust and cost less.”
Another important issue is to pick “a personal representative of the estate who will faithfully and competently handle your financial issues the way you intended.”
Chisholm also sees gaps in estate planning when clients print off forms from the internet and fill them out.
“They often don’t realize they may have overlooked some issues,” he says.
Stevenson says federal politicians have often advocated abolishing the tax paid by someone who inherits money.
“It never seems to happen, though,” he says. “The right estate plan for your situation can protect heirs from those taxes.”