Agricultural homesteads in Maryland may find better protection from high estate taxes, according to a new law. The Family Farm Preservation Act was signed in by Maryland Governor Martin O'Malley in an effort to preserve the future of farming in the state and reduce death taxes on smaller farms for the families left to run the operation. Estate administration has been a challenge for the families of deceased farm owners, and the new law aims to help significantly reduce the tax burden.
The law -- which goes into effect in July -- will raise the estate tax exemption on agriculture-related assets from $1 million to $5 million, so long as the property is maintained as agricultural for a period of 10 years following the owner's death. This is in hopes that it will make it easier for farmers to pass their property down to family who would like to keep the operation running. Because of the nature of agricultural properties and their land, they are twice as likely to owe taxes. This new law is not a cure-all for Maryland's estate tax woes; however, it is a positive step toward relieving the tax burden of families who take on the farm.
Estate administration can be challenging for even the simplest circumstances, but for a family whose assets include a farm, land, equipment and potentially a business to maintain, the process may be even more complicated.
Maryland's Governor has been praised for seeking positive changes in the laws that will better help Maryland residents see their wishes come true when it comes to passing their farms to family members in the event of their death. Agriculture is an important aspect of Maryland, and many residents appear to find relief in knowing that this law is a first step toward protecting what they have worked hard to achieve.
Source: Maryland Reporter, "When farm owner dies, new estate law should help families keep it in business," Dana Amihere, June 1, 2012