Maximizing Your Inherited Land: Essential Steps and Strategies for 2024Jan 01, 2024
You've just inherited your family's land and you're probably wondering what is the best way to maximize this inheritance? What are the most essential steps or strategies you need to take in 2024?! Lucky for you, I have exactly what you need to know and I'm going to share with you the 4 essential steps you need to take and have answers to ensure you're making the most of this legacy asset, so it doesn't become a family liability.
First things first, we must first acknowledge that it is our duty to manage the land. The worst thing we could possibly do, especially in 2024, is let the land sit idle and do absolutely nothing! In fact, it's actually a biblical stewarding responsibility to manage it! Genesis 2:15 states "The Lord God took the man and put him in the Garden of Eden to work it and take care of it." And the way I look at it, if God had the expectation and direct order for Adam to work the most perfect landscape ever, Eden, then why would we expect to have a lesser responsibility to NOT manage an "imperfect land"?
So now that we have that understanding out of the way, how are we going to maximize our inherited land?! What are these essential steps you had mentioned I need to know for 2024?
It's going to first start with a couple of questions before we take ANY action. And like anything else in life and when tackling a project: it's the what's and why's.
What are your what's specifically when it comes to your land? The first thing you need to be able to answer is the acreage. What size tract are you dealing with? Because understanding how much land you have to work with will greatly determine your opportunities available to you. As Proverbs 27:23 says "Be sure you know the condition of your flocks, give careful attention to your herds." You should know what you have: how big is your flock for example can make a big difference on how you might work it... And when it comes to land, there is a big difference on how you can manage 35 acres compared to 350 acre to 3500 acres. None are "better" or "worse" than the other. Each size tract is just as worthy to be managed, but there are different challenges associated with different size tracts.
The most commonly shared challenge is small acreage. If you have less than 50 acres you are considered "small" operationally, and simply means it is a lot more difficult to get traditional operations conducted on the ground, which means diversifying the property is not nearly as likely of an option in traditional methods. The advantage small landowners do have is it can be a lot less overwhelming and easier to wrap your mind around the management decisions to pursue, since it is more likely and an all-or-nothing scenario, or limited to less than a handful of practices at any given time. The less discussed challenges are those for "large landowners", which we will say are acreages 1100 acres or more. Why do I share this as a challenge? Because it can be overwhelming to keep up with. Operationally there's typically no problem getting work done but deciding where to start and keeping up with the volume of management needed can cause us to spin.
The second what question you should be able to answer is your timber type. What type of forested landscape is it? Do you have mature plantation pines or recently cutover land? Do you have a cypress swamp with a river that runs through it or an upland hardwood tract that stays dry year-round? You don't have to be able to identify every tree species out there or even know the exact ages and timelines... but knowing the basics of your timber types will again significantly impact your "starting point options" and give a clear picture to your foresters of land suitability and future opportunities.
So we have our what, which are details we cannot control...the next IS within our control and will ultimately be our north star for decision making, our ultimate foundation for the land management done. This is often what I consider your most important component for your land. Because when you have this nailed down, you will be "like a wise man who built his house on the rock. The rain came down, the streams rose, and the winds blew and beat against that house; yet it did not fall, because it had its foundation on the rock." (Matthew 7:24-25) And what is this foundational rock? It's your why.
What is your purpose for keeping the land? Why is it so important for you to continue managing it? This is what I call the "why factor". This is something which will keep you motivated with plans don't go according to plan, when things take way longer than anticipated and keeping your aligned with the right decisions to help you get the right results you actually desire. This factor is allowed to change over time as your season of life and situations change, but it shouldn't be so superficial that it changes annually.
Let me explain...perhaps you have a young family and your family land is a good investment piece to provide college funding potential for your kids when they're older, but as you age you may still look to the land to be a strong financial investment but now maybe you are desiring periodic retirement income streams. Both have an underlying financial motive, but the timeframes, size of ROI and consistency may change in those two seasons of life. Another example: to create thriving deer hunting for you and your family and perhaps later you decide that you would really like to increase the diversity of bird species for your bird watching hobby. Both cases has a strong foundation for wildlife focus, but the species you might focus on change over time.
As the parable mentions in Matthew I just shared with you, the house on the rock doesn't get to avoid the storms in life, but rather are simply able to weather them. The same is true with your why factor... there will be trials and storms and disappointments when it comes to your land, but how strong of a foundational why factor YOU have will determine if your family land legacy withstands those trials and stay within the family. Because without a solid foundation, the first hiccup will greatly increase the liability perspective for you and your family.
So we have a solid foundation of what we're able to work with and what we're moving toward... why we're even going through all the effort to keep this family land within our family, let's get to TWO essential action steps you need to take now that you have this basic due diligence and deep reflection is done.
Review your property taxes. Matthew 22:21 says "Then he said to them, “So give back to Caesar what is Caesar’s, and to God what is God’s.”" Taxes are a way of life we are to respectfully pay, even if we don't agree with them. And property taxes are among the top 3 reasons why forestland becomes unsustainable for the average family to keep and are the number one factor to turn your inherited asset into an inherited liability. But your property taxes can be reduced by having your property enrolled into a conservation use assessment program run through your county tax assessor. The eligibility requirements, acreage minimums and maximums, time frame commitments and conditions and how much your taxes are reduced vary by state and county. Most conservation use programs are based on current use valuation compared to highest and best use marketability of your land. That being the case more urban and suburban sprawl locations are more likely to have a greater tax reduction than more rural locations primarily due to the "highest best use" taxability factors. But no matter your location you can expect to SAVE MONEY through your enrollment.
What do you need to consider before enrolling and how do you enroll to save property taxes? First most cases, but not all, require a 10year covenant to keep the land in it's current use.... meaning if you're not willing to keep the land in the forested landscape use for at least 10 years with potential plans to develop it, you may need to reconsider jumping in right now. BUT if you don't have any development or conversion plans in your relatively near future you can enroll your property through your county tax assessors office. The exact process will vary by state and county, so be sure to talk to a representative there to ensure you bring the proper documentation and receive your enrollment.
After we have our liability reduced as much as possible, we're now going to connect with a local forester who can give us precise, tailor made recommendations for YOU. Proverbs 24:6 states the importance of getting advice from others before moving forward on any significant action. So, if this is "so important", why is this listed down here as my 4th essential step and strategy, rather than the first action you should be doing? Well, because if you don't have your what answers and you don't have your solid purpose why statement of what you're aiming to achieve, your conversation with any forester isn't going to feel fulfilling.
Now don't get me wrong, a forester can evaluate exactly what you have and determine your what answers for you... they can write you up a series of plans based on what they see on the ground, but without your purpose and direction you wish to see from the land, then you will never feel truly confident in those plans. Determining at the very least, your purpose, your goals, your WHY-factor will allow you to start off on the right foot and set the right groundwork with any forester you choose to work with from the beginning. This will greatly reduce any unsatisfaction that would have occurred by receiving plans you're unsure are "right" for you, and allow them to create the best management plans FOR YOU.
That's it! Your essential steps and strategy needed to maximize your inherited land for 2024:
- Knowing WHAT you own: acreage size and timber type
- Identify your WHY-factor
- Reduce your property taxes with county conservation use assessment programs
- Connect with a forester to provide you personalized prescription plans for your land and goals
If you're ready to really hit the ground running through an immersive foundations training, check out our FREE 3Day Masterclass: Landowner Foundations I'm hosting January 9th-11th, 2024! The exact training you need for 2024 to get you to stop postponing decisions for your family land and know exactly how to get started!
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