Determining the future use of your land
Temporary Land Use Options
If you want to keep all or some of the land in the family, it is important to pass on to your heirs your knowledge of the land, including your goals for the property, how the land has been managed, who you have worked with, and any programs you may be enrolled in. If you have a forest management plan, share it with your family and use it as you develop your estate plan. Communicating this information to your family can help them become good stewards of the land. Learn more about your forest management options.
A forester is an important professional to contact regarding your land’s management, who can help you evaluate your land management options, including determining the value of your timber for a land appraisal. Find the service forester working in your area.
Current Use – Natural State and Lowers Taxes
Current use tax programs give landowners an opportunity to significantly reduce their property taxes in exchange for keeping land undeveloped and producing public benefit. This is a temporary program, and it can be used in combination with other land conservation tools. Find more information here or contact a consulting forester to learn more.
Permanent Land Use Options
A conservation easement (CE) is a legal agreement that extinguishes some or all of the development rights of the land forever but allows your other rights—such as farming, forestry, and recreation—to continue. With a CE, you maintain ownership of the land. A CE can be placed on all or part of your land, for example allowing you to reserve house lots.
A CE can be sold if the land has exceptional ecological or historical value. Alternatively, it can be donated, providing the landowner with a tax deduction for a charitable gift. Since the land can no longer be developed, a CE lowers its value, which can help lower your taxable estate. In these cases, landowners are required by the IRS to have the land appraised by a qualified independent appraiser to determine the value of the deduction. There are often costs for CEs to ensure that the terms of the easement are monitored and enforced in perpetuity.
Donating or Selling Land
Land can be permanently protected by donating it or selling it to a qualified conservation organization, such as a land trust, a state conservation agency, or a town. Donations of land may provide significant tax advantages as a charitable gift.
Landowners can sell their land or CE at a price below its fair market value. The difference between the appraised market value and the sale price to a qualified conservation organization is considered a tax-deductible charitable contribution.
A donation of land or a CE through your will is another way to ensure your land’s permanent protection and potentially reduce your estate tax burden. You can change your will at any time, and a bequest does not become effective until your death.
Landowners sometimes negotiate a gift or sale of the property while reserving the right to occupy and use the land for life, with control of the property automatically transferred to the conservation organization upon the death of the landowner. The gift of a property with a reserved life estate can qualify the donor for a charitable deduction. Landowners are responsible for upkeep and all management costs during their lifetime.
It is possible to protect the majority of the land through one of the above tools while a small portion is sold or maintained by the landowner for future development.
Finding a Conservation Organization
Many land conservation organizations seem exactly alike at first glance, but their missions and land management philosophies can vary greatly. Your property’s location, size, and natural resources all help determine which conservation organizations may be interested in working with you to conserve your land. It is important that any organization you work with shares your goals and personal philosophy about land and land management. To find a land trust or public conservation agency working in your town, visit findalandtrust.org.