Profiles in Conservation

Keys to keeping land in the family — reaching consensus, diversifying revenue

By Glenn Rosenholm

Most forest landowners are not certified accountants; Susan Benedict is. She can do the math, and that gives her a huge advantage in keeping their Pennsylvania land in the family for generations to come.

Benedict has a B.S. in Accounting from Penn State, and she works as the controller for a local real estate group. Accountants typically possess excellent math and planning skills, both of which are very important to managing real estate, including forest land.

She spent a lot of time on her family’s extensive forested landholdings. She grew to love their woods, almost as much as she would love a relative. Her family shares her affection for their land. To them, it’s not just a patch of dirt waiting to be developed; it is much more.

“We discussed this as a family, and we consider our land to be a partner or member of the family. So all the decisions we make consider the land and its health, just like you would consider a member of the family,” Benedict said. “My grandfather purchased it in 1943. We didn’t live there, but we spent a lot of time there as kids and adults. My dad, every spare minute he had he was on the property, and he took us along.”

She and her brothers later inherited the land from their father, Lewis Shoemaker, in 2006. Today, she and her brother Michael Shoemaker own 2,078 acres of forested land—an enormous family estate.

Benedict owns it in a 50-percent partnership with her brother. There were three siblings initially, though her middle brother passed away after their father died.

Today, she is 58 years old, and her husband, Leroy, is 65. They have three adult sons—Lewis, Jacob, and Zachary Benedict.

“My husband and I are currently residing on the property; we moved in last November,” she said.

Her living brother and partner, Michael, 55, is married to his wife, Connie.

Goal: Keep the land for future generations

Collectively, they would like to keep the land in their family. “That’s the stated goal of the current generation here and the next generation coming up,” she said.

“We have a family limited partnership set up, and we will shortly begin transferring shares in that. We are currently involving them in land management decisions. As much as possible, we try for unanimous decisions on things. I have three adult children. They’re quite involved in what we’re doing. My brother who is a partner does not have any children. That itself presents its own challenges.”

She added, “When I pass, my shares go to my husband. These shares go into a trust. Once he passes, the shares go to my three boys. My brother, since he does not have children, he has set up a similar trust for his wife. Then, he wants to benefit my sister-in-law’s granddaughter, and finally the shares end up with my three boys. We wanted to make sure the land stays with our bloodline, our dad’s heirs.”

But keeping the land in the family is not as easy as it sounds.

“There’s always the challenge of family dynamics—births, deaths, divorces, that sort of thing. We continue to examine estate planning alternatives. One of the things we’re looking into is to put [the land] into a trust. In a trust, there are better protections to keep shares in the family after a divorce. The other challenge is always money. Having enough money to take care of the people and take care of the land,” she added.

Their clan is fortunate in that the adult children want to keep their land in the family. Often, adult children do not share the same values for the land as their landowner elders.

“Properties remain in a family until people have to shell out of their pocket to keep them,” she said. “People are happy to have property, to recreate there and benefit from that. But when you go down to other generations, they become less interested in keeping it if they have to financially contribute to it to keep it.”

“Assuming my children have three kids a piece, that would make nine owners. As they grow up and take jobs across the country, they become less involved or connected by virtue of not being here. That generation’s children in all likelihood will not grow up here, and in turn they will be even less involved. So you can imagine if you get a bill for $1,000 to pay taxes, they’re not interested in maintaining that kind of investment.”

This difference in values increasingly puts land at increased risk for sale, fragmentation, and parcelization. When a continuous stretch of forest is broken up and when its ownership is divided, the land’s ability to provide ecosystem services is reduced. Wildlife habitat, water quality, timber productivity, and other benefits often decline with fragmentation of forest land.

Make property pay

“In my opinion, it’s important to make your property pay for itself. Because if you have heirs, the further out from you, the less likely they will be to want to continue ownership. Cash is a good incentive to keep it going. And timber alone just simply cannot support taxes and upkeep,” she said.

“We have 2,087 acres. We have harvestable timber,” she added. “Most properties are less than 200 acres, and most properties will not even see a timber harvest usually in a generation. In Pennsylvania, it will take two generations before a timber harvest.”

They do whatever they can to raise cash sustainably, Benedict said. “We participate in the Natural Resources Conservation Service programs like EQIP (Environmental Quality Incentives Program), along with WHIP, or Wildlife Habitat Incentive Program, and CSP which is the Conservation Stewardship Program. So those programs are very important to us because the payments we receive we use to improve the soil resource, wildlife resource, and water resource.”

Strategy: Diversify income

Benedict said their land has diverse northern hardwood forests featuring oak, maple, cherry, birch, hickory, hemlock, white pine, beech, and others. They have an American Tree Farm System certified management plan, and they manage for sustainable forestry, she said.

“That’s what’s in that management plan. We also manage for water health. We’re an important watershed. We make sure that we manage to keep our water quality as pure as possible. If you do good timber management and good water quality management, your wildlife benefits from it.”

“Our strategy is to diversify our income sources as much as possible. We market timber, and we harvest based on our sustainable forestry management plan. But as you get more people involved, there’s just not enough timber money to meet people’s needs. So we have decided to pursue wind energy and natural gas,” she said.

“We have had a wind energy lease for 7 years that’s in the development stages. The construction should be finished by the end of 2019. They’ve been helpful so far because we’ve had lease fees over the past 7 years. Going forward, the wind farm will produce annual royalties for a minimum of 26 years, with a 26-year option after that.”

For the natural gas, she said their land is under lease with a natural gas company. Currently they’re looking at well heads being constructed in the 2019–2020 timeframe.

“The natural gas is anybody’s guess. If it’s typical of the dynamics used to create the natural gas royalty calculator, each well head should produce up to $14 million in royalties. There’s up to five wells per pad. And there’s possibility for 2 pads to make 10 wells in all. So that’s $14 million per well head times 10 over a 20-year period. What our goal would be, if in fact we actually get royalties, we would create a conservation fund to pay the taxes and the upkeep on the property in perpetuity,” she added.

Manage for results

Benedict said the programs and tactics they’ve implemented are working out well so far.

“They provided financially for the owners. We’ve been able to maintain the property in good condition. We have 8 miles of road to maintain. We have cottages, and we have hunting cabins and a shooting range to maintain.”

“Sometimes cooperation with other landowners is key to accomplishing positive outcomes, especially for owners of smaller land parcels,” she added.

“The wind farm required that we work with five other landowners to get enough land and access to a power line in order to make it feasible. So cooperation with some of your surrounding neighbors would be helpful in realizing opportunities. Look for an opportunity. If you don’t have enough land yourself, look for neighbors that will help you do it.”

“For smaller landowners, pipeline right-of-ways might be helpful,” she said. “I know a landowner with 40 acres in southwest Pennsylvania, and they allowed a natural gas pipeline to go across their property. The money they received from that [pipeline] helped them to purchase additional adjoining land.”

The biggest improvement the Benedicts have made in the past 10 years is to institute quality deer management principles to control their deer herd.

“Once we balanced the deer herd, got it down to the size that fits our habitat, we saw an increase in native plants. We have plants that are native to our area that we haven’t seen in our lifetime that have just emerged and are flourishing,” she added.

“The other thing we’ve done is identified naturally occurring native pollinator habitat, and we’re working to maintain and enhance that. That has had a real positive impact on forest health. Trees need pollinators. Oak blossoms, pollinators help that. We have excellent tree regeneration across our property, in part because we have such excellent pollinator habitat. Two things are in play there, we balanced the deer herd, so they’re not eating everything. And we support native pollinators, so that our trees produce more of their seeds and fruit.”

They also planted a variety of seedlings and installed deer fences and food plots in recent years, along with many more improvements, through their participation in various Federal and State programs.

While many tactics and improvements have worked out according to plan, the family has faced unexpected challenges.

“The unexpected death of our brother—we had some inheritance tax to pay there. Having that cash cushion from our gas lease was really important at that time. We also had a problem with invasive insects attacking our timber. We had a gypsy moth outbreak that destroyed about $1 million worth of timber. Those are uninsurable losses.”

Despite these setbacks, their investments in money and time throughout the years have yielded excellent returns, some financial and others more personal.

Bottom line

“Making your land pay for itself is an important goal to help keep your land in the family for generations to come,” Benedict said. “I think that to families that have a stated goal across generations to keep the land in the family, this makes a lot of sense.”

Read about the Benedict family as Pennsylvania Outstanding Tree Farmers at the Pennsylvania Tree Farm Program Web site.

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