Q: I'm a Minnesota resident. MN has a $3,000,000.00 estate tax exemptionCan I put Iowa farmland in a trust to get below

A: As a Minnesota resident, you can use trusts to help manage your estate and potentially reduce your estate tax liability. However, the specific type of trust and its effectiveness in reducing estate taxes will depend on various factors, such as the value of your estate, the nature of your assets, and your overall estate planning goals.

One option to consider is an irrevocable trust. By transferring ownership of your Iowa farmland to an irrevocable trust, the assets may be removed from your taxable estate, thus helping you stay below the $3 million Minnesota estate tax exemption. However, it's crucial to understand that once you transfer assets to an irrevocable trust, you generally lose control over those assets, and the transfer may be subject to gift tax.

Another possibility is a Qualified Personal Residence Trust (QPRT) if the farmland includes a personal residence. A QPRT allows you to transfer your personal residence to a trust while retaining the right to live in the home for a specified term. After the term ends, the residence is transferred to the trust beneficiaries, potentially removing it from your taxable estate.

It's important to note that estate planning involving trusts can be complex, and the tax implications can vary depending on your specific situation. Before making any decisions, it's essential to consult with an experienced estate planning attorney and a tax professional who can help you assess your options and create a tailored plan that meets your needs and goals.

Additionally, keep in mind that estate tax laws can change over time, so it's crucial to periodically review and update your estate plan to ensure it remains effective and aligned with current legislation.