The wrenching financial adjustment encountered by much of agriculture since 1981 has produced a sharp contrast to the 1970’s when increases in farm and ranch values were consistent and substantial. Thus far in the 1980’s farm land values have declined substantially and in some areas are no more than half the levels reached in the early part of the decade. As might be expected, estate and business planning concerns have shifted from an emphasis on planning to reduce federal estate and state death tax liability to planning to assure that high and rising debt loads can be shouldered and serviced by the estate and by the heirs or other successors.
Reductions in farm and ranch asset values since 1980 and decreases in the size of most farm and ranch estates have focused attention on the adequacy of estate and business planning strategies in general use during the 1970’s and on planning strategies appropriate for an era of declining asset values. In addition, the higher asset values of the 1970’s and early 1980’s have left a troubling legacy of tax traps to be avoided in the financially demanding environment of the 1980’s.
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