W. Allen Nipper, Kilpatrick, Ricky L., Van Osdell, Mary Ann, Blazier, Michael | 3/20/2008 1:49:38 AM
SHREVEPORT – Conducting a family meeting with open discussions to establish and maintain legacies and groom successors is an important part of maintaining family forestlands, Dr. Allen Nipper said at the 24th annual Ark-La-Tex Forestry Forum held March 13.
Nipper, who is regional director for the LSU AgCenter’s Central Region, and his wife are timberland owners, and he spoke from that perspective.
“We are experts at our experiences, not foresters,” he said.
Ricky Kilpatrick, area forestry agent for the LSU AgCenter, said more than 350 attended the event, which was sponsored by the LSU AgCenter, the Louisiana Department of Agriculture and Forestry, the Louisiana Forestry Association, the Northwest Louisiana Extension Forestry Advisory Committee and the Ark-La-Tex Ag Council.
Nipper said 80 percent who attended were landowners. Of those, 10 percent held family meetings in the past 12 to 14 months and eight took minutes at the meetings.
Failing to plan for intergenerational transfers is planning to fail, Nipper said, citing statistics that show 60 percent of landowners had not talked to their children about forestry. Sixty-three percent of Louisiana forest owners are over age 55.
Children have concerns about taxes, time and distance, forestry knowledge and sibling rivalry, Nipper said. Some children do not want to think about taking management from their parents because it means having to go to a funeral.
Meetings can share visions, solve problems and strengthen emotional ties, he said, suggesting annual meetings at neutral locations to avoid interruptions.
Ground rules discussions should involve whether in-laws should be included and proxies be accepted.
“Spouses cannot be a sounding board,” said Nipper, adding that it can create disharmony among siblings.
An initial meeting should include directions to the land, aerial photos, soil and topographic maps, timber types, tract maps and corner/boundary drawings.
The second meeting should address the location of such documents as wills, deeds, easements, business agreements and journals. Light-hearted farm experiences and a farm history are additional ideas to be shared, Nipper said.
“You can’t keep records on sticky notes on the refrigerator,” he said.
Nipper said meetings can be a time for families to dream together. “Seventy-five percent of fun in a dream is the planning, thinking, preparing and working towards it,” he said. “So, even if a dream fails, the family realized 75 percent of the fun.”
Nipper proposed several questions for family discussion:
-- Who will continue your work and vision?
-- Will that person have family support?
-- Did you share why you are a tree farmer often enough and with the right people?
-- Will there be pressure to sell the assets?
-- Will property be a legacy or an albatross?
-- Are the children ready for the challenge?
A discussion of taxes by Paul Spillers, a tax attorney, was another subject on the program.
“When you plant trees, there are tax consequences,” he said.
Spillers said funds spent to prepare a site and replant trees are known as reforestation expenditures.
“Generally, these expenses must be capitalized and then deducted many years later when the trees are cut,” Spillers said. “This is not a good tax result. A much greater tax benefit is realized if the expenditures can be deducted in the year the money is spent. Detail and proper accounting are critical.”
Employing a family member in a family business can save taxes for both the business and the family as a whole, Spillers added.
“The business saves taxes because it deducts the compensation paid as a business expense,” he explained. “The family saves taxes because the income is spread over more taxpayers who are in lower tax brackets.”
To realize these savings, the services must be real and the amount of compensation must be reasonable, he said.
Foresters perform a social good and protect the environment by playing a vital role in carbon dioxide levels in the atmosphere, said Dr. Mike Blazier, assistant professor of forestry at the LSU AgCenter’s Hill Farm Research Station.
He said trading carbon credits can provide supplemental income and is increasing at “a pretty impressive clip.”
“You are not going to quit your day job over this, but it is analogous to a hunting lease,” Blazier said.
He called 2007 a “blowout year” with a 1,300 percent increase over 2006 in carbon trading.
Contacts: Ricky Kilpatrick at (318) 965-2326 or email@example.com
Dr. Allen Nipper at (318) 644-2662 or firstname.lastname@example.org
Dr. Mike Blazier at (318) 927-2578 or email@example.com
Writer: Mary Ann Van Osdell (318) 741-7430, ext. 1104 or firstname.lastname@example.org