Agribusiness Update: Increased Lifetime Exemption
What changed: The federal estate tax exemption is set to permanently increase, allowing individuals to transfer more wealth during their lifetime and at death without triggering federal estate taxes. The increased exemption means that many farms and small businesses will be less likely to face an estate tax burden when passing assets to the next generation. This change provides stability and planning opportunities for families looking to preserve their operations.
For married couples, the exemption effectively doubles to $30 million with portability, which means a surviving spouse can use the unused portion of the deceased spouse’s exemption. This allows for more flexibility in estate planning and the ability to transfer family-owned farmland, equipment, and business interests efficiently, without needing to liquidate assets to pay taxes.
In summary, the OBBBA ushers in agricultural reforms that go far beyond traditional crop supports, by making business investments more affordable, keeping food production resilient, and supporting research that keeps American agriculture globally competitive. Additional modernizations on the horizon include the expansion of Agriculture Risk Coverage (ARC)/Price Loss Coverage (PLC) “guardrails,” inflation indexing for reference prices beginning in 2031, and assistive technology for farmers with disabilities.
Thinking about gifting strategies, trusts, or succession timelines? Contact LDM—our team can coordinate estate and tax planning for farm families.
