Spotlight: Special Assets

Aug 30, 2018 | Special Assets

Often called the hidden half of client wealth, recent studies suggest special assets make up as much as 55 percent of wealthy client assets. Yet despite this bend toward unique properties and holdings, these can be perceived as challenging, as they require special attention and can carry sentimental value for the family.

Special assets can be anything illiquid, such as a resource holding like oil, gas or timber, a real estate holding, a closely held business, promissory note or even an heirloom like jewelry.

With the intricacies and risk involved in managing special assets, a natural inclination among many trustees is to liquidate special assets and invest in more traditional assets in order to maximize returns.

However, to most families these assets mean more than their open market value.

These assets are not simply items on a spreadsheet. They are businesses built from the ground up by parents and grandparents. They are homes where generations of a family were raised, and they are often the initial source of a family’s wealth.

Cumberland Trust is uniquely positioned to understand and help families retain special assets. Why? Because of our unique platform related to liquid and real assets, we are able to work with best of breed managers chosen by the family to properly manage the various types of holdings.

For example, if a family has a commercial property, Cumberland Trust’s platform allows the family to choose an expert manager for that asset.  In some instances, this may be a local professional property manager, or, in other cases, this could be a member of the family who already has this expertise.  If a family member already has the skills necessary to manage the family timber tract, then we, as trustee, want to be able to empower the family to designate that individual as the responsible party for managing the asset. This arrangement could apply to a timber holding, a mineral interest in Texas, or a working farm in Mississippi.

Cumberland’s approach can be clearly differentiated from many other corporate trustees that coordinate special asset management all under one roof.

Based on the increasingly large role that these assets play in family wealth, Cumberland Trust has invested in a Special Assets Team with significant real property experience.  Dayton Hale and April Drennan work with these families and managers to ensure that Cumberland serves as a good steward of these holdings.

We recently sat down with Dayton and April to discuss more trends and items of interest. Click here for the Q&A portion on the blog!