Home  Coloradoan Archives  Sr. Voice Archives  FAQs  Links 
Law Offices of Ronald W. Rutz
Coloradoan Archives

June 29, 1999: Misinformation about Tax Planning Costs; A Neighbor's Junkyard

Q: For years, dad was convinced that our family would lose the farm because of "death taxes" and if he did any planning it would cost thousands and thousands of dollars, be very complicated, and still not work. I am so very thankful that we were able to get him in.

A: First, I want to be clear that I did not do anything that any competent estate planning attorney can not do. Secondly, I have been frustrated myself over the years with so much doom and gloom which seem to discourage people, especially farm couples, from just taking some fairly standard yet relatively inexpensive steps. (The following would also apply to any couple with significantly appreciated assets.)

Thank you for asking me to share your experience in this column because a number of farm families have come in during the past few weeks with almost identical problems. By way of general example, Mom and Dad paid $55,000, $75,000, or $110,000 for the ground and water. The property is now worth between $900,000 to $1,400,000. If both die, "death taxes" could be in excess of $300,00 and if the property is sold, capital gains could easily exceed $200,000.

But by just doing tax wills (or a tax living trust), the "death tax" figures can be 0- on the first $1,300,000 of net worth and in six years on the first $2,000,000. Talk about death to "death taxes!" And for capital gain purposes, the people inheriting the property (i.e. the family) will get a stepped up basis from what was originally paid for the land and water to the value at the date of death, all for several hundred dollars of legal fees for each spouse.

Now if a couple's net worth is much above $2,000,000, more than just doing tax documents will be needed. But there are solutions. And for agricultural families located away from the urban population explosion, normally little else is needed. For families being impacted, especially locally, a meeting with their CPA and lawyer is the best way to begin. Given the existing laws, the family most certainly can continue the tradition of passing on the farm to the next generation and even if the tax laws do not change, no family needs to lose the family farm nor pay thousands of dollars to do complicated tax schemes. I only wish more families had access to the Coloradoan so they could see this column and then schedule an appointment with their attorneys.

Q: Our dearly beloved next door neighbor has several old cars (one on blocks) and a great variety of mechanical parts strewn around his back yard. When does an "eye sore" become a junk yard and more importantly, when can I complain?!

A: Focusing on the cars, the good folks at City Hall indicate that two things need to be present. First, the vehicles must be inoperable which means either no current plates and sticker on a vehicle, or it is in a "condition of being junked, wrecked, abandoned, or not operable."

Thus, the car on the blocks would seem to qualify even if it displays current plates and tags. Additionally, even though the vehicle on the blocks (or both cars) can not be seen from a public street or alley, if you as a neighbor can see them, then the "shade tree" mechanic could be in violation.

Concerning the "menagerie" of car parts, a second ordinance dealing with "rubbish" as defined in the law could be triggered. This infraction, however, might depend on the opinion of the observer. Thus, although it offends you, a city inspector may disagree.

Nevertheless, you seem to have sufficient grounds to telephone for a Health and Safety Inspector to come out for a look. If either or both ordinances are broken, then your neighbor will have 30 days after a notification letter to screen the affected area from your view before further action is taken. If you strike out on both of the foregoing objectives, be creative because there could be an environmental issue (such as oil spills), or insect or weed problems.

Home  Coloradoan Archives  Sr. Voice Archives  FAQs  Links