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Chapter 3 - Estate Planning Tools

There are two important questions that can help drive your legacy planning process: Do you want to determine who will own your land? Do you want to control the use of your land in the future? These questions can help determine the estate planning tools that will help you achieve your personal and financial goals.

DETERMINING THE FUTURE OWNERSHIP OF YOUR LAND

If you don’t want to determine who will own your land, you can sell it and use the proceeds to achieve your goals. If you do want to determine who will own your land, there are conservation-based estate planning tools that will help you formalize your wishes.

USING WILLS TO DETERMINE WHO WILL OWN THE LAND
A will, also called a “last will and testament,” is the most commonly used estate planning tool. A will is a legally binding document that states how you want your assets distributed once you have passed away.

Wills are simple, inexpensive ways to address many people’s estate planning needs, but they can’t do it all. For example, a will won’t help you minimize taxes or avoid probate. Probate is the winding down of your affairs under the supervision of the courts. Since probate makes all your assets public information, some people want to avoid it. However, for families that are dealing with conflict or miscommunication, it can be a beneficial process to have the courts involved. 

In order to be effective at passing your land by way of your will, you need to ensure that the way you own your land permits you to pass it on that way—and, if so, that your will is written in a way that ensures it will achieve your desired goals.

Following are some considerations for the development of a will that effectively distributes your land assets to meet your goals. These suggestions are not meant to replace the advice of an estate planning professional but to help guide your conversations with one.

Description of Current Owners
If you own only a partial interest in the land, or if you want to make a provision for how the land will pass after owning it as the survivor of joint owners, it is helpful to state your ownership interest in your will.

Beneficiaries
Your will should include the names of the individual(s) (spouse, children, siblings) or organizations (land trust, state conservation agency, local town) to which you would like to give your land. 

If you do not have heirs and are interested in giving your land to a land trust, state conservation agency, or local town, it is highly recommended that you meet with the organization and discuss your intentions. Though you might think that any organization would jump at the chance to own your land, be sure to have in-depth conversations with your chosen recipient, as some organizations have financial requirements for accepting land or would rather sell your land and put the proceeds toward their mission. Donating your land would qualify as a charitable gift and may provide your estate a tax break. Contact a tax attorney or a certified public accountant with experience in land conservation to learn about the tax implications of a charitable gift of your land.

An estate planning attorney specializes in the legal strategies and tools used to help you reach your personal and financial goals. Your family attorney may not be qualified to help you plan for your land. Land is a unique type of asset, and not all estate planning attorneys have expertise in dealing with it. When developing an estate plan, work with an attorney who has experience with land and the conservation tools available to help you meet your goals.

Avoid Conditions in Your Will
It is not advisable to set up conditions for the ownership of the land—for example, “My daughter can have the land as long as she doesn’t build houses on it.” Conditions can be difficult to both interpret and enforce and thus may not ensure the outcome you want. In addition, wills are intended only to transfer your assets according to your wishes and are therefore meant to have a limited life span.

If your goal is to keep some or all of your land undeveloped, it is recommended that you consider placing a conservation easement on the land or giving the land to a conservation organization, such as a land trust or a state conservation agency.

Sharing Your Goals in a Legacy Letter
If you are interested in keeping your land undeveloped, but donating it to a conservation organization or placing an easement on it doesn’t meet your goals, an informal option would be to communicate your intention for the future of the land through a legacy letter.

A legacy letter—which can be attached to your will to provide additional information—is written to your beneficiaries and is intended to share your knowledge, beliefs, values, and hopes. A legacy letter is not a formal legal document, but it can be very helpful to your beneficiaries in understanding your wishes and providing guidance to their future decisions about the land. Some things you may consider including in your letter are

  • the history of the land, including the story of how you came to own it
  • the ecological, historical, or cultural value of the land
  • favorite memories of the land
  • aspects of the land you enjoy most
  • work you have accomplished on the land
  • your hopes for what will happen to the land

Don’t worry if you’re not a good writer—this isn’t an English paper! The goal of the letter is to pass your legacy on to your beneficiaries in your own words.

USING THE TYPE OF LAND OWNERSHIP TO DETERMINE THE FUTURE OWNERS
CURRENT OWNERSHIP
A great place to start your conservation-based estate planning is by reading your deed, which lists your current form of ownership, and understanding the implications of this form of ownership. An estate planning attorney, land trust, or forester can help you find your deed. Without estate planning, the form of ownership listed on your deed will determine who will get your land when you pass away—and it might not be what you want to have happen with your land. If your current form of ownership doesn’t meet your needs for passing on your land, meet with an estate planning attorney to learn about other options for the ownership of your land.

If you do want your family to continue owning the land, you will need to choose the form of legal ownership that determines who controls the land, how it is transferred, how it is taxed, and how liability will be shared, among other things. Determining which form of ownership is best for you depends on several factors, including the number of people who will be sharing ownership, liability concerns, how income from the land is taxed while you are alive, and how the land will be taxed when it is transferred. There is a range of land ownership options; bringing your goals, or those of your family, to an estate planning attorney with land conservation experience is a great way to sort out which type of ownership will be the best fit.