Jacksonville Journal Courier

Death and taxes.

They may both be the only certain things in life, but that doesn't make them any less comfortable to discuss.

For the thousands of family farmers in west-central Illinois, it's a conversation that must take place, though.

A 2001 law reigning in the federal estate tax, commonly known as a "death tax," expires this year and will take with it exemptions for assets such as farmland that are passed along to a family member.

It's not clear what will happen among legislators, many of whom seem torn between the desire to ease the burden on family businesses and the want to keep part of a tax that generates an estimated $1 trillion a decade.

If no action is taken, the exemption would drop from $3.5 million to $1 million. In the process, the U.S Department of Agriculture estimates, one in every 10 family farms would face a tax burden when changing hands. The American Farm Bureau Federation has asked for the exemption to be raised to at least $5 million.

Without some leeway, farm lobbyists argue, portions of family farms — some in the same family for more than 100 years — would have to be sold just to cover the taxes.

Critics counter that is an exaggeration and point to a Congressional Budget Office report that in 2000, before the changes in exemptions, estate taxes applied to only 2 percent of estates. With the first round of exemptions in effect, fewer than 1 percent had to pay the tax.

Still, congressional leaders from largely farming areas are urging reform.

Republican U.S. Rep Aaron Schock has suggested waiving such taxes so long as the land stays within the family.

Democratic U.S. Sen. Dick Durbin believes the tax is necessary but there should be exemptions to cover farms and small businesses that remain within a family.

Where the debate may end remains a question mark.

But those who could be affected should start thinking about what they would do and talking about the options with a financial adviser or estate planner.

It's a discussion that's not necessarily going to be comfortable, but one that shouldn't be directed by the emotional thunderstorm of death or sudden illness.

http://www.myjournalcourier.com/articles/family-26667-tax-death.html