The family business, in the best of times, faces unique challenges, particularly with business succession and estate planning. Moreover, the family business is often not merely a business, but a lifestyle. The hard work, long hours and heightened risk can be common challenges. The business owner’s very identity is more likely to be tied to the success, or failure, of the family business.
This is particularly evident for agricultural or farm businesses. The family farm is connected to the land, which is critical to success. In California, where our firm is based, the news is replete with stories of fires and critical water shortages as our mega drought continues.
In addition to such forces of nature, family farms and other family businesses face another threat: An increasingly inhospitable tax environment. First, let’s examine some of the changes in the wind. We must all remember that these are all simply proposals, and any final tax changes may be dramatically different. We remain uncertain that the Biden administration has enough votes to enact any truly meaningful tax change. Predictions are always tricky — consider how accurate the pollsters were in the 2016 and 2020 presidential elections.