How Can You Protect Your Land?
Already, simply by choosing to look at this material, you have made a good start. You own a piece of land that you think is worth protecting. Excellent! Many people who enjoy nature and open space want to ensure that future generations can also enjoy the land. However, as a landowner, you may be worried about what this may mean for you, your family, and the land that you want to protect. Don’t be concerned, as you have many options that can be configured to meet your needs. For example, you can donate your land, now or in your will. Perhaps you would like to keep your property in the family and only give up the development rights to the land. The key item is that you want the land to remain as you have enjoyed it and not to become a parking lot or a subdivision someday. Working together with advisors, you can find a plan that works for and with you to help your land remain the way you want it. Added benefits may involve potentially significant cuts in property taxes, income taxes, and estate taxes.
So, congratulations on your interest in preserving your land, and hopefully you can soon rest easy knowing your land is safe to be enjoyed for generations to come.
What Kinds of Property Can Be Protected?
Many people believe that the only way land can be protected is if it is untouched wilderness. This is not true. The type of protection can vary with different sites, but many different types of land or property, with many different uses, can be protected or preserved. Land preservation that protects forest or farmland is greatly appreciated as cities expand and sprawl across the landscape. The tools used for preservation might vary depending on whether you have a house or some other type of structure on the property, or if you want the land to be used for public recreation or for habitat protection. Some types of preservation may target very specific areas like rivers or streams on your property. Historic sites may be important to preserve to keep a tangible reminder of your community’s past. If you have any type of property that you think should be preserved, talk with your legal or financial advisor or a land trust about it, because it may fit under a category you might have missed.
When Do You Want to Begin Protection of the Land?
If you no longer have an immediate need for use of the land, or if you want to see it preserved in your lifetime for a specific purpose, you could donate your land right now. However, if you wish to keep the land during your (and any named beneficiary’s) lifetime, you can arrange for donation of the land in your will. Or you might consider donating a remainder interest in your land, providing some of the benefits of donating the land during your lifetime, but allowing you and/or your beneficiaries to continue living on it or controlling what happens on it for your and any other named person’s lifetime. Conservation easements are also available for use during your lifetime or through your will. When the protection would begin is really up to you. Talking with your family and any trusted advisors will help you arrange for land protection that will best suit your needs.
If you are choosing to donate land or set up a conservation easement through your will, be sure to discuss this with the land conservancy before making these stipulations. You want to be sure that the land trust will agree to care for your land and will have the ability to do so.
What are Your Options?
Basically, you have three primary tools for land preservation; conservation easements, land donations, and bargain sales of land. Each tool can be configured to fit your idea of what you would like to do with your land. However, each tool differs from the others in significant ways that you need to keep in mind when making your decision about how to preserve your land.
Conservation easements are very helpful for people who want to preserve their land, but maintain ownership and use of it, or someday even to sell it. With a conservation easement, you donate some of the rights that you have as a landowner in order to ensure preservation of specific values inherent in the land. These values, called “conservation values,” include scenic viewscapes, riparian buffers, wildlife habitat, and open space, to name a few. Donating, and thus dissolving certain development rights prevents future owners from using the land a way that would be harmful to the preservation of these conservation values. One benefit that comes with a conservation easement is that you still own the land and can do anything else you want, as long as it falls within the terms of the legal agreement you made with the conservancy.
Many things are possible with a conservation easement. Farmland can continue to be farmed, and building structures for farm use is allowed. A preserved wildlife area may remain untouched, if that is what you, the landowner, wish. However, some landowners may want to permit some kinds of limited development, and that is a possibility also. A landowner and a conservancy, working with legal and/or financial advisors can work out unlimited possibilities with a conservation easement.
Conservation easements may offer a lot of financial incentives too. With some of the development rights permanently removed, the land may have reduced property taxes. Another big tax benefit could be in the form of estate taxes. Because estate taxes can amount to a substantial portion of the property value, many heirs are forced to sell some or all of the property in order to pay them. Due to the reduced development potential on easement property, estate taxes can be much lower. This could allow heirs to continue living or farming on the property if they wish. A tax break may come in the form of an income tax deduction for the donation. To qualify, the land has to meet the federal tax requirements that ensure public benefit through preservation. The donation amount will equal the difference, according to a qualified appraisal, between the value of the land without the easement and the value with the easement.
Land donation offers many possibilities to landowners as well. If maintained as a preserve by a conservancy or government agency, the land will be forever protected for the public benefit, and owners can feel good about knowing they gave something to the community. This may be a beneficial way to do something with land that is no longer of interest to a landowner due to long-distance ownership, has highly increased property taxes, or that you would like to use to preserve the memory of a family member.
An outright donation is just what it says. The owner picks a qualified conservation organization that can be responsible for the land and ensure its protection and then donates the land. Land donation can be either preserved land that the conservancy will keep, or land that will be sold to raise money for caring for preserved land elsewhere.
If the landowner wishes to remain on the land during his or her lifetime, or perhaps wants a designated beneficiary to live on the land during their lifetime, the owner can donate a remainder interest in the land. Then the owners or beneficiaries may live out their lives on the land, with the conservancy only receiving control afterwards (or if the specified persons release their life interests in the land.) At the time of donation, the owner may receive some charitable contribution tax benefits, but they reserve their right to enjoy the property for the rest of their lives.
Another donation strategy is donation by will. This allows for the owners to have complete control over the land during their lifetimes with the land going to the conservancy after their death.
Bargain Sale of Land:
This type of preservation of land is for people who would like to realize an immediate financial gain on their land, but wish to preserve it also. A conservancy may buy the land for less than the fair market value, which will give the owner some money as well as some income tax reduction, but will also allow the conservancy to preserve the land.
What Should You Do Now?
Information in this brochure is only the beginning. Now that you have a good idea of some possibilities, you should contact us to learn more about how we may be able to help in your particular situation. We will work with you to make sure your needs are met. You also should talk to your legal and financial advisors. They will inform you of what tax benefits you may be eligible to receive, as well as help you to write the legal agreement, or conservation easement. You will want to get as much information as possible to ensure that the land is secure and you are happy with your decisions.
Thank you for taking the time to find out about your possibilities. Land preservation is important for the future of our global community. We would like to help you find the perfect option for you and your land!