Financial advisors are always seeking to connect on a personal level with their clients and to uncover shared interests and beliefs. While this isn't the only route to building a great advisor-client relationship, it can be a very effective building block.
So when David E. Zumbusch, CFP, realized how many of his clients shared his passion for hunting and other outdoors activities, he began to think about how to apply this to his business model. The result is Sportsmen Dream Financial, a specialized extension of Zumbusch's thriving practice in Buffalo, Minnesota.
"Hunting is a way of life for me and for many of my clients. A love of the outdoors and a respect for wildlife is one of the most important things I can pass along to my three sons, and that my clients can pass along to their families," said Zumbusch, who is a member of Ducks Unlimited, Safari Club International and the National Rifle Association.
The idea for Sportsmen Dream Financial came from Zumbusch's discussions over a dozen years in the planning business with clients who were outdoorsmen who owned land where they went hunting and fishing. "The problem that has been coming up is how do these clients keep that land in their family's hands for future generations?" said Zumbusch.
The answer has been conservation easements and, as a result, a new niche business was born.
A conservation easement is a commitment by a land owner to leave a piece of land in an undeveloped state in perpetuity. The donor of the land works with a recognized land trust organization that "receives" the gift of undeveloped property, and ensures that the property will remain undisturbed. More than 1,600 private land trusts are operating today, and they are facilitating easements on an estimated 2.5 million additional acres of land each year, according to the Land Trust Alliance.
"When I started reading about conservation easements, I immediately knew why this was great for my clients who fit a specific profile," said Zumbusch. "They could preserve the open land and maintain control over it while also creating a positive impact on their financial situation."
Conservation easements are very valuable estate planning tools because the easement reduces the assessed value of the land significantly. It is not uncommon for land that would be valued at $20,000 or more per acre by a developer to be valued at a few thousand dollars per acre after the easement is finalized. This reduction in land value is considered a charitable donation. For the donor, the conservation easement yields reduced property taxes, a smaller estate, and a charitable gift that can be deducted from income taxes.
Just as importantly, conservation easements are very flexible. Depending on how the conservation easement is structured, the donor can retain significant control over the use of the land, and even who has access to it. Basically, the land can remain the donor's property and for the exclusive use of his family and friends, while generating favorable tax treatment. All the donor has to do is abide by the rules he agreed to in the conservation easement document.
"This ability to retain ownership and control of the land is very appealing to my clients. I emphasize this point when discussing the possibilities with them," says Zumbusch. "I see a lot of potential in Minnesota, where my business is focused."
