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Family Wealth Management for Landowners

Landowners have special needs for real property financial advice

“When it comes to land, younger people are generally happy as heck to have it, if it doesn’t cost them any money.  But as people get older, or if money gets tight, they tend to think about how to get money out of their property or how to maximize their tax benefits.  The biggest mistake we see, with respect to generational transition of land, is that neither generation, the parents nor their heirs, take into consideration the cash flow required to maintain the property.”

Bart Weisenfluh shared those observations with me recently, along with a host of other financial management decisions specific to private landowners.  Bart is Managing Director at Plimsoll Mark Capital, a global wealth advisory firm.  As their website explains, a “plimsoll mark” is the line on the side of a ship’s hull to which the vessel can be safely loaded - this offers a fitting metaphor for the perspectives and independent solutions they offer wealthy families.

Families Want Independent Investment Advice

Bart explained to me that he and his business partner founded Plimsoll three years ago in response to demand from their clients.  Their specialties are financial planning, and they found they preferred to work with families rather than large impersonal institutions. Families wanted their services too, but they wanted them without “strings attached” to large investment banks with their own investment agendas.

“Working with families is very different,” says Bart, “You’ve got to be in front of people all the time.  Someone has 100 acres or inherits property, and they say, ‘come see me.’  Our investment approach is premised on how families look at finances.  People have a finite lifespan, and therefore view their money inherently differently from an institution or endowment that looks at money in perpetuity.  A person’s investment strategy is different because when they’re 70, how they look at money differs from when they were 40.”

“What I’ll often say to a client is, ‘When you are no longer on this earth, all your money will go to Sam and Jesse, are you cool with that?’  Sometimes the answer is yes, but sometimes it’s a definite no, and we help them think through their goals and investment options.”

Let’s Start with Taxes

Here’s basic advice that Bart gives to anyone who has a lot of land or whose land is a big piece of their net worth.  “Make sure you are working with a planner who understands that important fact about you.  If you’re not comfortable talking about your property, find someone you can trust.  You’ll need someone who understands tax laws, estate planning, and what the next best alternative to keeping your property is.  Your priority may be to keep the land in the family, but it’s important to understand your alternatives - in both a qualitative and quantitative sense - just in case.  Typically, you do not want a check-the-box accountant!”

“There’s something new every year.  I promise you in 2012 there will be a whole new set of taxes.  You can’t rely on quickbooks to remain prepared!”

Next week, Plimsoll Mark Capital will share some insight into their simple but sophisticated strategy for helping land rich, and possibly cash poor, landowners invest and manage their finances.