Q: What is a land trust?
A: Land trusts are local, regional, or statewide nonprofit organizations directly involved in protecting open land resources for the public benefit. They can protect farmlands, wildlife habitat, scenic vistas, ranches, watersheds, coastlines, river corridors, wetlands, and trails whatever kind of open land is important to the communities and regions they serve.
By purchasing land or by holding donated property or easements, private land trusts can protect land that governments cannot. Furthermore, it is a land trust’s responsibility to protect land in perpetuity, which increases a community’s confidence in its ability to plan for the future.
Q: I am interested in conserving my family land, but do not know where to start.
A: For most landowners their property is their most significant financial and, frequently, treasured asset. Years spent caring for and being supported by a ranch or farm, or years spent in a beloved place, makes any decision about its future use a significant life event. When considering the future for your land, the first step is to determine your goals. Depending on the answers to some very fundamental questions, the wide variety of options will begin to narrow to a workable few. You have the power to permanently keep your land the way you want. A land trust can be a very important partner and guide by explaining the options available.
Q: What are some of the options that would help me protect the conservation values on my land?
A: In our experience, a landowner often wishes to continue to own the land but would like to take advantage of the income, property, and estate tax benefits typically afforded by a conservation easement. A conservation easement is a legal agreement between a landowner and a qualified conservation organization or government agency that permanently limits a property’s uses to protect its conservation values. It is a flexible tool that protects land, while leaving it in private ownership.
Because a conservation easement does not meet the needs of every landowner, however, it is important to be familiar with a variety of different options.
If a landowner wants to keep some development rights for family needs or to generate some income, but wishes to continue agricultural operations or is motivated by other conservation goals, a carefully planned limited development can be designed to meet both needs. A few selected home sites are created, while the important conservation values of the property and the majority of the land is permanently protected from future development.
Some landowners prefer to keep their land unencumbered during their lifetime, but choose to convey their land or an easement at the time of their death through a bequest. If you choose to make a bequest (donation at the time of death), it is important that you discuss the matter with your heirs as well as with the land trust, or other recipient of the property. Land and easement bequests typically provide estate tax benefits.
Finally, an increasing number of local and regional government entities are creating land conservation programs with tax-based funding sources. Many entities, however, do not have the staff expertise to complete projects on their own, and turn to conservation organizations for assistance in structuring and negotiating these conservation projects.
Q: What compensation is available for permanently placing a conservation easement on my land?
A: A variety of tax benefits are often available to landowners who make a charitable gift of land or conservation easement. Real property taxes may be lowered because of to the reduced development value of a property. A charitable conservation donation may offer substantial income tax benefits which can be carried over for several years until the entire donation is utilized. Finally, a charitable donation of a conservation easement may significantly lower the value of land within an estate, thereby reducing federal and state estate tax obligations. It is important to get assistance from professional legal and financial advisors to determine how you personally may be able to benefit from the potential tax benefits of a charitable gift.
In some instances, a land trust and a landowner will enter into a “bargain sale,” where the landowner agrees to sell the land or an easement for less than fair market value. This part sale/part gift generates some income for the landowner, in combination with a potential charitable deduction for the value of the interest conveyed by donation.
Conservation organizations do not typically have their own project funding source and must go outside the organization to raise monies for each project. Sources include local, county or state government agencies, local or national private foundations, corporate foundations, or private individuals. Most funding sources require matching funding, so a single project typically has multiple funders.
To achieve shared conservation goals, it is most helpful when landowners donate as much of the value of the land or easement as they can afford. Conservation funding is very limited and there are many competing requests for project funding locally and across the state of Utah.
Q: How is the value of a conservation easement determined?
A: Through a qualified MAI appraisal that determines three values: the fair market value of the land for development in its current condition, the fair market value of the land with uses restricted by the conservation easement, and the difference between these two, the before and after values, which is the value of the conservation easement.
