Ties to the land: Keeping forested lands in the family
Begin talking about – and planning for – ownership succession of forest lands to determine the future of your forest legacy.
One recent statistic about Michigan’s forest resource reveals that there are more than 20 million acres of forest land in the state. Of this vast resource, well over 50 percent of this forest acreage is owned by non-corporate and individual forest landowners. In addition, there is currently more than 440,000 family forest or private landowners in Michigan by most estimates. Consequently, this is a sizeable financial asset in Michigan (i.e. just considering the value of the land and timber alone) that is under control by private entities.
Many of these private forest landowners really value this natural asset that they own and enjoy their forest land whenever they get the chance – by themselves or with their family. Whether they hunt in the fall, cross-country ski in the winter, go mushrooming and hiking in the spring and summer or implement an occasional timber harvest on their property, many of these landowners feel inextricably tied to their land. And for many landowners, the longer they have owned the property, the stronger their bond to the land.
But these same forest statistics also provide another startling fact about private forest owners. A large proportion of these owners are aging fast – with more than 39 percent of forest owners being 69 years of age or older. Thus, a shift in land ownership from one generation to the next will likely occur very soon as these current owners pass on. So, the question becomes will this transfer be planned for ahead of time or dealt with after these owners are deceased?
Although many private owners consider their forest land as a special part of their family legacy, they unfortunately may not have shared this special attachment with their kids. So, when the time comes for the forest land to pass on to the next generation, the heirs may face a variety of challenges ranging from unexpected tax burdens to a general lack of understanding about what their parents’ desires were for the land. Many times, this lack of succession planning leads to chopping up the acreage into smaller parcels of property and/or the outright sale of this land, and unfortunately, many family conflicts.
Many of these actions lead to other changes as well. Subdividing large parcels into smaller units may make management for timber or other natural resources more difficult or uneconomical. In addition, negative impacts on wildlife habitat can occur –particularly for those animals such as deer and bear that range over large areas. So there may be ecological, financial and family consequences as well when the transfer of this forested asset is not planned for in advance.
Michigan State University (MSU) Extension is hosting a workshop designed to help families begin talking about, and planning for, ownership succession of their forest land. “Family Forest Ownership Succession in Michigan: Keeping Forests in the Family” is based on a highly-acclaimed program designed by Oregon State University, consisting of multimedia presentations and practical, interactive planning exercises.
The workshop will offer tools and tips on how to start discussing this difficult subject with her or his family members. Resource materials as well as a panel of local professionals will also offer general advice on estate planning. In a nutshell, this workshop covers a broad spectrum of issues – interpersonal, financial, legal issues and regulatory mechanisms – that family forest owners and their heirs need to consider to successfully plan a transfer of forest property from one generation to the next. Attendance at this program is a good way for you and your family to “jump-start” this often difficult, and sometimes complex, planning process.
The workshop will be offered from 9 a.m. to 4 p.m. on October 27 at the MSU Extension Tollgate Education Center, 28115 Meadowbrook Road in Novi, Mich. The registration fee of $65 covers the cost of morning refreshments, lunch, a workbook and handouts.
Families are encouraged to attend together: additional family members are only $15 per person. To register or to get more information, visit the Tollgate Education Farm Center website or call 248-347-0269. The registration deadline is October 20.