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Determining the Future Use of Your Land

A second important question to ask yourself is if you would like to control the use of your land in the future to ensure that some or all of it remains in its natural state. You can determine the future use of your land either temporarily or permanently. A forest management plan can help guide the stewardship of the land in the future. Current use programs are an example of a temporary option for determining future land use. Permanent land conservation can ensure that your land will never be developed or subdivided.

LAND STEWARDSHIP ACTIVITIES

Forest Management Plans
Make sure to pass on to your children your knowledge of the land and its past management. Also communicate your goals for the property and how they have been implemented in the management of the land. You may also want to provide information about the people you have worked with and what programs your land may be enrolled in. If you have a formal forest management plan, share it with your family and use it as you develop your estate plan. If you develop a forest management plan after you’ve developed your estate plan, reference key elements from your estate plan—such as a conservation easement—in your forest management plan. Communicating this information to your family can help them become good stewards of the land.

If your family does not already have one, an important professional to contact regarding your land’s management is a forester. A forester is a professional who can help you evaluate your land management options, including determining the value of your timber for a land appraisal.

A service forester (sometimes called a county or district forester) is a public employee who can help you explore your forest management options and navigate the benefits and requirements of the current use program.

TEMPORARY LAND USE OPTIONS
Current Use
Paying the property taxes on the land may be an issue for your family. Current use tax programs give landowners an opportunity to significantly reduce their property taxes in exchange for keeping land undeveloped and producing public benefit. Although these programs do not typically provide permanent protection for your land, they make owning forest and farmland more affordable and can be used in combination with other land conservation tools. Contacting a forester can also be a good way to learn more about current use tax programs. See the “Resources” section on the back cover for information on the current use program.

PERMANENT LAND USE OPTIONS
Conservation Easement
A conservation easement (CE) is a legal agreement that extinguishes some or all of the development rights of the land forever but allows other rights—such as farming, forestry, and recreation—to continue, all while maintaining your ownership of the land. A conservation easement is a flexible tool that can be placed on all or designated parts of your land, allowing you to reserve house lots in order to provide financial value or housing options for your family. Some CEs allow public access, whereas others do not; this usually depends on your preference, which organization you work with, and whether you are receiving funds for your CE.

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, possibly even dropping it below the estate tax threshold. Donating an easement can also reduce income tax burden. 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. Both sold and donated CEs often come with costs for surveys, appraisals, and stewardship donations to ensure that the terms of the easement are monitored and enforced in perpetuity.

Your heirs can donate a CE within nine months of your death, which can provide tax benefits to your estate, meeting your goal of keeping some or all of your land in its natural, undeveloped state and providing financial benefits to your heirs. As previously discussed, before you include the donation of a CE in your will, be sure to meet with the conservation organization to be sure it is willing to accept the CE.

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.

Bargain Sale
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, such as a land trust or a state conservation agency, is considered a tax-deductible charitable contribution, providing some income and potentially some tax benefits.

Bequest
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. This is a good approach if you need to keep the financial value of your property in reserve in case of unexpected medical bills or other needs but want to be sure the land will be conserved if you do not need to sell it during your lifetime.

Life Estate
Landowners sometimes negotiate a gift or sale of the property while reserving the right to occupy and use the land for life. In these cases, control of the property automatically transfers 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 based on the value of the property donated and the value of the reserved life estate, which is based on the donor’s age. Landowners are responsible for upkeep and all management costs during their lifetime.

Limited Development
Limited development is an option that protects the majority of the land while a small portion is sold or maintained by the landowner for future development. In a limited development scenario, the areas with the greatest conservation value are protected through one of the tools previously discussed, while other less sensitive areas of the land are set aside for future development.

How Much Is This Going to Cost?
Estate planning is not cheap; however, your estate will likely incur costs if you do nothing.
Estate planning can also help save money by reducing taxes. By planning in advance, you will have peace of mind in knowing that your land will be taken care of in the future. Costs go up the more indecisive you are and the more complex the solutions needed, so try to come to as much of a decision as possible before bringing in more costly experts, like attorneys.

Ask friends and neighbors for referrals, and don’t be shy about asking professionals for an estimate before beginning to work with them.

FINDING A CONSERVATION ORGANIZATION

Many land conservation organizations seem exactly alike at first glance, but their missions and land management philosophies can vary greatly. State conservation agencies or land trusts achieve their mission, in part, through land conservation. 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. If you do decide to move forward with land conservation, it is important that the 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.