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What do the vineyards and wineries in California have in common with over half of the country’s forestland? They are owned by family businesses, and there will be a huge ownership or generational transition—probably in the next 10 years.
For the most part, though, millions of dollars in capital in these businesses is tied up in the land itself. This illiquid asset does not generate a big income or cash flow, so it doesn’t allow a family to carry out the generational transfer techniques most businesses use.
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“Certainly there are financial and tax aspects to the timberland planning process,” Watson says. “But it’s really about the timber and the resource, and who in the family has the knowledge to manage it. And it’s about the family history and the attachment to it, and it’s about the family dynamic for that particular family.
“You’re really passing on more than a financial asset,” he says, “and you really need to do the proper planning for it.”
