Legacy Planning: What Will Happen to Your Woods After You?

Compiled by Barb Sellers, Administrative Assistant, James C. Finley Center for Private Forests; PA Forest Steward, Class of 2018

Since 2010, the James C. Finley Center for Private Forests at Penn State staff have worked diligently in the space of forest legacy planning. We recognized that, to continue our focus on the care and management of private forestland, we first must ensure that it stays intact as a forest. Legacy planning is not a "one size fits all" venture and almost always requires the help of a planning professional. That's why we continue to research, collaborate, and work hard to create practical resources that help landowners overcome the hurdles and achieve a successful plan for the future of their woodland. In this article, we share some useful information for owners of any size woodlot as they consider the future of their land.

Your land is part of your legacy. You have been a good steward of your land, carefully making decisions about its use. Planning what will happen to your land after you are gone is the next critical step of being a good steward. In fact, it may be the most important step you can take as a landowner—not just for your benefit but for the benefit of your family, your community, and the land itself.

Why have an estate plan?

An estate is the total of all your assets, which includes your land, house, and bank accounts, as well as any stocks and bonds. An estate plan ensures your assets will be distributed in a way that meets the financial and personal needs of you and your beneficiaries (your children, other members of your family, individuals outside of your family, or organizations you support). Even if your plan for your land does not include future family ownership, the toolkit of estate planning can help you identify pathways to ensure future and continued stewardship. Estate planning is not just for the wealthy; if you own land, then estate planning is a necessary and valuable step for ensuring that the legacy of your land is a positive one.

Where do you start?

Taking on estate planning can be quite daunting, especially when planning for the future of your land. Transferring ownership in ways that protect what you love about your land while meeting the financial and emotional needs of your family, or set up the land for continued stewardship, can be a complex and highly emotional process. Before you engage a planning professional (estate planning attorney, financial planner, etc.) to help you make your plan a reality, begin by thinking about what you want most—to see your land remain undeveloped forever? To maintain family harmony? To ensure financial security? To preserve flexibility for your beneficiaries? You may want to rank your goals in order of their importance and list any challenges standing in the way of those goals.

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 and help a professional advise you.

Involving Beneficiaries in the Decision

If you own your land with others, your next step will be to talk about your goals with your spouse or co-owners and try to incorporate shared goals and values as you lay the foundation for your plan for the future of your land.

If children or other beneficiaries are part of your plan, it's up to you to decide how involved they are in determining the future of your land. Involving them can help avoid conflict and get their buy-in. Discovering the needs and desires of beneficiaries can take place at a family meeting or in individual conversations. These discussions can provide an opportunity to gain understanding, ask questions, and consider options. If family history or dynamics prevents healthy conversations, a professional facilitator may be able to assist.

Estate Planning Tools

After you have determined your goals for your land and have your questions and information compiled, you are ready to work with a professional to create and put a plan in place. 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.

A will, or "last will and testament," is the most commonly used estate planning tool. They are simple, inexpensive, and address many needs, but they can’t do it all. They won't help your beneficiaries minimize taxes or avoid probate. And, 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 allows 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.

If you don't have beneficiaries 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; 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. It may be prudent to 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.

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. If you don't have a copy, 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 want your beneficiaries 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, both direct (individual, joint tenant, tenants by the entirety, tenants in common) and indirect (limited partnership, trust, limited liability company). Bringing your goals, or those of your beneficiaries, 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.

If you want 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 do so 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. A conservation easement, land donation, and bequest are some examples of a permanent option that can ensure your land will never be developed or subdivided.

The decisions (or lack of decisions) you make about your land will have financial and personal impacts long beyond your passing. Your land is an important but flexible asset that can be used to meet a wide variety of personal goals. Estate planning can be intimidating and sometimes lengthy. Take a step today to begin your estate planning process. Don't leave the future of your land and your family's relationships to chance.