Green Horizons

Some of us have begun our succession planning and some are still assessing their situation and objectives. Some have talked with heirs... some have met with their advisory team (attorney, accountant, financial advisor)... some have begun to review the current ownership structure of the forestland... We all find ourselves in a slightly different phase of our planning, and that is OK. After all, this is a work in progress. However, we should ask ourselves - where do we go from here?

In an effort to accurately assess our progress, we suggest that readers return to where we began - What is your vision for your timberland? What do you want to see happen with the property in future generations? What is the legacy you wish to leave for your heirs? Is this a financial asset or an "heirloom" asset? Do you want your connection to your timberland to transcend you, and your time on earth? The answers to these questions hold the answers to our succession planning progress, and our future path.

Dust off your vision statement and take a hard look at it. The beauty of a well articulated vision statement is that it can guide virtually all of the decisions that need to be made, be they operational, financial or successionrelated in nature. The first question to ask, is "does this vision statement still reflect my desires?" If not, make the necessary adjustments. If it is still appropriate, where are you at regarding the underlying goals necessary to make that vision a reality?

If all of the goals are not completed (and they almost never are because people, families and the world change continually), then what specific strategies need to be undertaken to accomplish those goals? For example, a timberland owner may need to...

• Honestly assess heirs regarding their desire/ability to own and manage the timberland in the future
• Begin to involve heirs in management decisions/activities of the farm/forestland
• Begin periodic family meetings to improve communication and develop the next generation of owners
• Begin to set aside "non-timberland" assets to "equalize" the distribution for heirs that will not be involved in the property in the future (this will make you feel better and it will help to avoid conflicts between heirs)
• Talk to an attorney about creating a trust, or a limited liability company (or both) to hold the property (this helps to limit liabilities, as well as providing some help in transitioning to the next generation)
• Explore the possibility of donating a conservation easement to a land trust, in order to protect the timberland from division and/or development in perpetuity

For families who are fortunate enough to own forestland, and who have the desire to preserve this unique asset, there is no shortage of things to do! This is a dynamic, long-term process. It is a continual moving target. As health, finances, and families change, plans need to be reviewed and adjusted periodically. Just like the "on the ground" work we like to do on each of our properties (TSI, food plots, habitat management, tree planting, pruning, etc.), succession planning work is an ongoing endeavor. Hopefully, it is a labor of love that continues to bind us to the land and brings our families closer together. Current owners and their heirs should see succession planning as the "next level" of good land stewardship. If done properly, it should bring stability to the forestland and peace to the family.

Editor's Note: In the future, you are welcome to contact David at david@dawatsonco.com, 636-230-3900.

David Watson is a financial advisor specializing in working with rural landowners, sportsmen and conservation-minded families. D. A. Watson & Company, 17263 Wild Horse Creek Rd., Suite 202, Chesterfield, MO 63005, 636.230.3900, 888.230.3999, www.dawatsonco.com, david@dawatsonco.com. All investing involves risk including the potential loss of principal. Specifically, investing in timberland is subject to substantial price fluctuations of short periods of time and may be affected by unpredictable property and timber valuations and supplies. The market for timberland is widely unregulated and concentrated investing may lead to higher price volatility and there may not be a secondary market available for this product. Material discussed herewith is meant for general illustration and/or informational purposes only, please note that individual situations can vary. This information is not intended to be a substitute for specific individual tax, legal or investment planning advice. Please consult a qualified professional for legal advice/ services. Securities offered through Royal Alliance Associates, Inc., Member FINRA & SIPC. Royal Alliance Associates, Inc. does not offer tax or legal services. Advisory Services offered through Pines Wealth Management, LLC, a Registered Investment Advisor, not affiliated with Royal Alliance Associates, Inc. D. A. Watson & Company is not affiliated with Royal Alliance Associates, Inc., nor registered as a broker-dealer or investment advisor.