Wineries, especially when kept as family businesses, are expected to incur high rates if they don’t adjust their tax plans now. California is anticipating a tax season with hikes that all farmers should be aware of. If your land is a part of your business, then estate planning now can give you protection against the tax liabilities ahead. A business that doesn’t prepare for an estate transfer may end up becoming the property of anyone. Estate planning for wineries in California might require you to update your estate by looking for the following.
With a new administration in office, your estate plan has to account for the changes in tax laws that are underway. These laws specifically affect estates with high net worth and their likely heirs. The heirs of these estates, however, benefit if their decedents can plan for estate taxes now. In 2021, you have up to $11.7 million, for example, that can be passed to your heirs tax-free. This amount is expected to drop to as low as $3.5 million by the year 2025. Estate planning can help you reduce or eliminate tax liability for your heirs.
Performance of the wine market
Operating as a business calls for you to generate leads and then sales, but neither of these are guaranteed to a winery or vineyard. As a business, your valuation is largely based on your sales. In some cases, there are benefits to a lower valuation, but in such examples, like a global natural disaster, tax benefits don’t last indefinitely. Estate planning with a professional can adjust your estate to remain in line with beneficial tax laws.
Estate planning to offset the loss
Estate planning can help you to retain favorable tax obligations if you start now. Estates function better when they’re updated every three to five years. Today, there are assets that are eligible for protection from tax hikes. Your assets need to be considered as part of your protection plan within an estate transfer. Make sure to meet with a qualified estate attorney to discuss these tax planning matters sooner rather than later to be able to take advantage of some strategies that may not be available for much longer!
If you have any questions about this, please feel free to reach out to us (707-681-5851 or [email protected]) or set up a complimentary consultation at your convenience by clicking on the following link: https://MyNapaLawyer.as.me/