(This is Part 2 of a three-part blog.)
D. TAXES. Estate taxes are owed nine (9) months after the date of death. Gift taxes are owed by April 15th of the year following the gift. Land is not liquid and takes time to sell. The issue is how to pay estate taxes when they are due. Lest we forget, ad valorem taxes are owed every year. Ad valorem taxes have escalated drastically in the last few years and are becoming burdensome. Certain estate tax elections can reduce estate taxes as can certain minority and control discounts for both estate and gift taxes
E. MANAGEMENT. The primary question is who? This question is not as important with the first generation, but for the second and third generation, it is extremely important. This is often a difficult question. The issue is often overlooked but is actually reasonably, easily solved with a succession plan.
F. INTRA FAMILY DISPUTES. Some children never seem to see the same picture or enjoy each other and do not want to be in business together. Often these family issues are the really difficult ones to resolve successfully. The key is acknowledging their existence and addressing these issues. They do not go away on Mother and Dad’s death - they get worse.
G. LACK OF FLEXIBLE PLANNING. No one can see into the future. In all planning, there needs to be consideration given to all the "what ifs". Does an irrevocable trust that can not be amended or changed provide for what is wanted and/or needed? Is a limited liability company or a family limited partnership the vehicle of choice for ownership of family assets? The answer depends on the need and the circumstances.
