Conservation land trusts, organized as a nonprofit, protect and preserve land for conservation purposes. To create a conservation land trust, landowners sign a voluntary agreement to protect the property.
Once formed, the land trust is a legal entity that assumes control of part, or all, of the real estate asset at the request of the owner. The area protected by the conservation easement is referred to as conservation land.
A practical and revocable tool, conservation land trusts are used to safeguard and protect the land.
Some people confuse land trusts and asset protection trusts. Land trusts are voluntary and revokable, while asset protection trusts are irrevocable.
A conservation land trust is a type of living trust. That means you, as the grantor or settlor (and the beneficiary), can create, change, or revoke the land trust at any time. Because you enter into the trust, your professional can customize it to your individual needs and the type of real estate involved.
Land trusts are simple to create and hassle-free to sustain. They require very little upkeep once formed.
In addition to residential, vacation, and second homes, land trusts can own many different types of assets. Land and property used for commercial, retail, and agricultural purposes, along with notes and mortgages, can become part of a land trust.
Benefits of Land Trusts
There are many potential benefits to land trusts, including securing individual privacy and anonymity.
An excellent privacy-shielding tool, land trusts can help protect an individual's privacy when used appropriately.
Remember, the land trust assumes control of the property, so the trust name is on official property records. When searching the county property records, the trust name will be listed — not an individual. This helps shield your identity from prying eyes.
Land trusts do not provide asset protection directly, but they make it harder for people to identify and pursue you. If they don't know you own a specific asset, they can't go after it. Land trusts are also constructive when you want to shield your actual net worth or invest in large-scale real estate development. Land trusts are used to keep assets separate from family assets.
Land trusts are a valuable tool to help avoid probate. You can designate succession of ownership of assets in the conservation land trust. A contingent beneficiary of a land trust would receive the asset's title when you die — without probate costs and time delays.
What is a Conservation Easement?
A conservation easement is a voluntary legal agreement between the landowner and the conservation land trust. The conservation easement protects its conservation value with permanent limits on the future use of the land.
While the landowner continues to own the land, the conservation easement remains in place forever. A conservation easement runs with the land. That means the conservation easement applies to future owners of the property. As the owner, you may use the land, and you may sell the land or pass it along to your future generations. But all future owners are bound by the conservation easement restrictions you've put in place.
You have significant flexibility in entering the conservation easement, and it can be tailored to your land. The conservation easement may pertain to just part of the land or all of it. Public access isn't required for a conservation easement.
In exchange for the many benefits, you give up some rights when you donate a conservation easement to a conservation land trust. Land trusts and landowners work together to create conservation easements that meet both their needs.
Suppose you own a large amount of acreage used for hunting and fishing. In that case, a conservation easement could restrict future development to protect the land, while offering significant tax benefits to the landowner. The landowner may still use the land for hunting, fishing, timbering, growing crops, and livestock. You can also sell the property, although the conservation easement runs with the land.
If your land contains a rare habitat for wildlife, you may donate a conservation easement that prohibits development and protects the wildlife. If you have a farm, you may keep the right to raise animals and grow crops, while restricting future buildings.
Why You Should Grant a Conservation Easement to a Land Trust
Often, a landowner's primary inspiration for donating a conservation easement is their deep love of their land and their desire to protect it from future undesirable development. Donating an easement protects the land, aligned with the conservation easement's purposes.
When resources are permanently protected and benefit the public, conservation easements may qualify as a tax-deductible charitable donation.
A charitable donation may result in significant tax savings because the tax-deductible donation equals the difference in the land value with and without the conservation easement. When you restrict the future development options with a conservation easement, you are lowering the asset's market value.
The difference between the values can result in a significant tax-deductible charitable donation while keeping the land ownership. Reduced market value also reduces the estate tax due.
Conservation easements benefit both landowners and conservation efforts. They're a flexible yet permanent conservation tool to restrict future development.
Many different land types can be protected with a conservation easement, such as wetlands, forests, ranch land, coasts, rivers, streams, trails, and wildlife areas. Since you work with the conservation land trust to develop the conservation easement, you can customize it to fit your land.
Land Trust's Responsibility to Conservation Easements
Both the landowner and land trust have responsibilities in a conservation easement.
The landowner is responsible for maintaining the land according to the restrictions specified in the conservation easement.
The conservation land trust is responsible for verifying compliance with the conservation easement restrictions.
The conservation land trust will monitor compliance with periodic visits. Usually, this involves an annual compliance visit to ensure the property conservation easement is protected.
The conservation land trust will keep a written record of the visit to verify compliance. The landowner may request a copy of the record of the visit.
Conservation easements provide many benefits to both the landowner and conservation efforts. Landowners can protect their land and may get the added benefit of significant tax savings. Land conservation easements are a flexible and valuable conservation and wealth-building tool.