C3 Financial Partners

C3 Financial Partners Shares Thoughts and Insights at TALT “Saving Family Lands” Seminar

“When it rains in Texas, 84% falls on farms and ranches.” This statistic, among others, demonstrates the importance of rural working lands in Texas, and the reason why the Texas Agricultural Land Trust (TALT) works hard to protect rural Texas lands. Celebrating their 10th anniversary this year, TALT’s mission is to conserve the Texas heritage of agricultural lands, wildlife habitats, and natural resources. Their motto: Protect. Conserve. Pass on.

As part of this mission, TALT hosted a conservation workshop as part of their “Saving Family Lands” seminar series on October 11th in Kingsville. C3 Financial Partners (formerly Texas Financial Partners), who often works with multi-family offices, was pleased to participate in this workshop. Todd S. Healy (Founder), Carolyn J. Smith (Senior Partner), and Jay F. Wheless (Partner) shared insights and learned new tools for serving their clients who own family farms and ranches.

At the seminar, Dr. Roel Lopez of the Texas A&M Natural Resource Institute shared information from a study on the changes affecting rural working lands in Texas today. Population increases, rising land values, and continued fragmentation of rural working lands are impacting natural resources and food security in crucial ways. With these conditions in mind, landowners considering a transfer to the next generation are faced with unique opportunities and challenges.

Blair Fitzsimons, TALT Executive Director, said of TALT’s work, “As we travel the state and visit with landowners, common themes arise in conversation. Drought, cattle prices, eminent domain, energy development… the list is a familiar one. But the topic that surfaces more now than before is how to plan for the future. Landowners are asking: How do I foster my commitment to the land? Will the children come back to the ranch or farm? What if one does and the other doesn’t? What are my options if I don’t have heirs? How do I ensure a legacy for future generations?”

TALT Stewardship Director, Ken Cearley, commented that “Texas private farms and ranches provide food, fiber, drinking water, clean air, wildlife habitat, and the wide-open spaces that all Texans benefit from, so it is imperative that these lands stay in production for generations to come.”

At TALT Kingsville workshop “Saving Family Lands” Todd Healy, Founder, C3; Carolyn Smith, Senior Partner, C3; Blair Fitzsimons, Chief Executive Officer, TALT; Ken Cearly, Stewardship Director, TALT; Jay Wheless, Partner, C3

Of particular prominence at the seminar was the topic of conservation easements, which allow landowners to voluntarily devote a portion of their working lands for natural or historical preservation, public access, or recreation, and could be a useful tool for landowning families who hope to maintain their estates across generations. “Conservation easements can be structured to protect specific conservation values of the landowner,” noted Wheless. “As Texans, we have a great opportunity to preserve and conserve our beautiful natural resources.”

Healy remarked that “Blair Fitzsimons opened the one-day conference by explaining that ‘land is what unites us.’ She and the other speakers went on to explain how much land has been taken over as our population in Texas grows. In describing a conservation easement, she explained how we may have the key to helping to curtail that challenge.”

During their opportunity to present at the event, the C3 team stressed the utility of life insurance as a tool for the stable transfer of family land across generations. Dedicated to high net-worth estate planning, Smith offered the following analysis of the ways in which life insurance and conservation easements might be used as complementary tools in estate planning for working lands.

As landowners review their plans to transfer ownership to the next generation, a couple of situations may arise:

  • Not all family members are interested in future ownership.
  • Establishing a conservation easement has decreased the market value of the land, and thereby, the value of the assets going to the next generation.
  • Maintaining farm and ranch land requires liquidity to fund maintenance, repairs, operations, etc.
  • Landowners may have an income tax savings from the establishment of an easement.
  • Land owners may use life insurance as a tool in their estate plan. Even though they may be giving up the potential appreciation of the property, they may be able to make up the difference with life insurance being paid for by the income tax savings.

The Kingsville event is the latest in a series of workshops held in the Gulf Coast region that focused on providing tools to landowners for succession planning, generational transfer of land, and other land management topics. C3 was honored to participate in this event, knowing that landowning families across Texas will benefit from the insights shared between all participants.

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