Many people here in the state of New York and around the world remember the great racehorse Secretariat pulling away to win the Belmont Stakes by an incredible 31 lengths in 1973.
This made him the ninth Triple Crown winner of all time, and it was the first time that a horse had captured the Kentucky Derby, the Preakness, and the Belmont in 25 years.
If you’re not a fan of sports or if this was well before your time you may have heard the story of Secretariat through the major motion picture that was released in 2010.
From an estate planning perspective the story of Secretariat and the Chenery family that owned and bred the horse is very relevant.
Farmland can be very valuable, and it is a source of sustenance for farmers of all kinds. If you were to inherit a farm that was subject to the estate tax you could be forced to sell the farm to pay the tax.
You would walk away with a remainder, but family farms hold extraordinary sentimental value, and ongoing income can be derived by continuing to work the farm.
Selling a farm to pay the estate tax is different than selling a commodity like an antique car collection or some valuable artwork that may be stored out of sight.
The Chenery family was faced with the prospect of losing their farm after the death of the patriarch Christopher Chenery because of a huge estate tax bill.
Ultimately the success of their horses enabled them to keep the farm, but many other farm families have not been so lucky.
Fortunately the estate tax exclusion is set at $5.25 million this year after the passage of the American Taxpayer Relief Act of 2012. Had this measure not passed the estate tax exclusion was scheduled to be reduced to $1 million, and this certainly would have impacted many farm families around the country.