When doing estate planning for clients who own family farm land, timber land, or Individual Fishing Quotas (IFQs), we have to navigate a complex web of federal and state regulations designed to preserve these unique assets across generations. These holdings often qualify for special tax provisions — such as Internal Revenue Code Section 2032A for farmland or deferral options for timber and IFQs — that can significantly reduce estate tax liability if properly structured. However, eligibility hinges on strict use and ownership requirements, such as continued qualified use for a set period after death and limitations on who can inherit the asset. Failure to meet these rules can trigger recapture penalties or force asset sales, undermining legacy goals. Effective planning involves early and careful coordination with legal, tax, and industry professionals to ensure that these valuable, often sentimental assets remain viable for future generations.
If you have questions about special rules that can apply to certain estates, give us a call at 253.858.5434 to set up an appointment today. We represent clients throughout Washington and Idaho and are available to meet in person, by phone, or via video conference.