Regardless of the primary reason that we own our woodlands (i.e. timber production, hunting, recreation) we soon learn that they provide us much more in return, than we originally envisioned. We marvel at their inherent beauty, the historical and biological secrets they reveal to us from time to time, and the sheer peace of being in the woods. Managing and nurturing our forests quickly becomes part of who we are as tree farmers and woodland owners. There will come a time, however, that we will need to transfer the management and/or ownership to a new generation of woodland owners. For many of us, the intent is to transfer that property to our children and their families.

Planning for that succession of the family forest is as important, if not more so, than the Timber Stand Improvement we do today. Just as a successful business enterprise needs to prepare the next generation of managers, so does a tree farm need to plan for a successful transition to a new generation of owners. Statistically, most family-owned businesses of any type do not successfully make it to the second generation. Often, this is due to poor planning, and a poor understanding of the differences between the facts and circumstances surrounding the first and second generation of owners. What makes mom and dad tick, may not be the same things that motivate the kids. What allowed the current generation to be successful as tree farmers, may not be present in the lives of all of the children. In this column, we will explore how a woodland owner can successfully prepare his or her heirs for all the joys and responsibilities that go come with woodland ownership.

First and foremost, a woodland owner must have his/her affairs in order. This includes:

• A written “vision” statement for the woodland

• Property executed estate-planning documents (wills, trusts, healthcare directives, etc.)

• Adequate life insurance in place and funded

• An up-to-date Forest Management Plan

It takes a fair amount of time and effort to get these things in place. However, the above steps will not be worth a pile of sawdust, if your dreams, desires, and passion are not clearly communicated to your heirs. When most of us think of esoteric topics such as “estate planning”, most of us see lawyers and financial advisors…we see stacks of complex documents and insurance policies. As important as these tools are, they only provide the framework for your transition to the next generation. They do not speak to your legacy. That can only be provided by you, the current owner. Without your vision and enthusiasm, the woodland may be nothing more than a financial asset to be liquidated when your heirs need cash.

Family Issues

Heirs will face many challenges and obstacles during their lives, some of which may be different than your experiences:

• Children may not share the same perspective as you – they may not feel the same inherent attachment to the land as you do.

• Children may live long distances from the woodland

• Modern lifestyles may not allow as much time to be spent working and recreating on the property

• Some children (or spouses) may have “silent” concerns or apprehensions about owning the woodland

• Children may not always see “eye-to-eye” with each other on management matters, especially as they grow older

• Children and families may face financial turbulence (divorce, failed business ventures, college funding, healthcare issues, etc.)

• Prices offered by developers may be very appealing to some children and their spouses..

• Children may have differing recollections/ interpretations of what mom and dad wanted.

Understanding and anticipating what pitfalls may challenge your plans to transfer ownership may be a little painful, but it may help to keep the family tree farm intact, and in the family. An honest assessment of the strengths and weaknesses of your children, their lives, and the world they live in, may help you to craft a successful succession plan. Once you have done this assessment and built your plan, the fun part is communicating your plans and dreams to your loved ones.

Laying the Groundwork for “Legacy Transfer”

The steps to successfully communicating your plans/ vision for the tree farm are listed below:

• Hold a Family Meeting – Arrange a date/ time with all heirs (and spouses) to discuss the details of your vision statement, wills/ trusts, and timber management plan. Discuss why you made the plans you did, why this is important to you, and what your dreams/ hopes are for the woodland. Be honest. (Note: try to minimize distractions. This is an important meeting, so small children, television, holiday activities should be avoided, if possible. In addition, try to avoid having different meetings with different heirs. It is important for all heirs to hear the same things, in the same manner, at the same time.)

• Introduce Your Advisors to Your Heirs – Having some “face time” with your attorney, CPA and financial advisor will make everyone more comfortable with the plans you have laid out. Your heirs may be working with them in the future. (Note: you may wish to include your consulting forester in this process also.)

• Encourage Questions and Concerns To Be Voiced - Whether it is during the family meeting, or in the weeks and months afterward, encourage open discussion of your heirs’ thoughts and feelings. It is important to have a two-way conversation about the woodland, and what the future holds.

• Involve them in the Tree Farm – Spending time with your heirs and their families is the best way to increase their understanding of the management of the woodland, as well as your passion for the woods. Remember, your excitement is contagious! Give them an opportunity to experience what you love and why you love it.

• Talk About the “Business” Side of Owning a Woodland – discuss with your heirs the costs and challenges of owning any managing timberland. Talk about future costs and management issues and how you will deal with them. Remember, someone in the future will have to be responsible for the business side of the woodland or tree farm – not everyone is comfortable with these responsibilities.

• Keep Your Heirs up-to-date with Changes to Your Plans – Just because you made the plans does not necessarily mean you are going anywhere soon. You will probably own and control the woodland for many years to come. Over that time, your family situation may change, and your plans may need to change too. Keep your heirs informed of your wishes. You may need to repeat some of the above steps, from time to time.

Communication is the “grease to the gears” of your succession plans. The investment of time and energy to doing good communication will pay off. This is your opportunity to leave a meaningful legacy to your family, and to safeguard the family forestland that you love. You owe this to your woodland and you owe it to your family… this is true stewardship.

( Go to the next article "Accurately Assessing Your Heirs" )