Learn About Your Options

As a property owner, you know that your land is special. Like many landowners, you are probably concerned about your land’s future. With increasing development pressure on natural land, many property owners ask themselves:

“What will happen to my land? Will future owners care about my land the way I do? Will my children and grandchildren be able to afford to keep my land?”

Since its founding in 1974, the Cedar Lakes Conservation Foundation (CLCF) has partnered with property owners to conserve 2,962 acres of land in our mission area within the Cedar Lakes region. CLCF envisions a future landscape that maintains a balance between natural and developed areas where important natural functions and features are preserved for all time. Our waters, fields, farms, and forests are essential for our well-being and the health of our environment. CLCF’s land protection projects seek to preserve one or more of the following:

CLCF permanently protects land through fee simple transactions and conservation easements.  Arriving at the land protection strategy that is right for your situation takes thought and deliberation.

Which Strategy Is Right For Me?

A Look at the Strategies

As development pressure continues to increase and more landowners realize that they can permanently protect the land they love, conservation easements have become increasingly useful in assisting landowners to achieve their conservation vision.

Conservation easements permanently protect land while leaving the property in private ownership. Landowners can continue to live on the land, are free to sell their land or pass it on to their heirs and can use the land in any manner as long as the terms of the conservation easement are met.

Conservation easements are legal agreements between the property owner and the Cedar Lakes Conservation Foundation (CLCF). These agreements permanently restrict the type and amount of future development and activities permitted on a property in order to protect the land’s scenic and conservation values.

Conservation easements offer many advantages:

  • Landowners retain title to their property and may continue to live on it, sell it, or pass it on to their heirs, knowing that it will always be protected.
  • Conservation easements can result in significant income, estate and property tax benefits for the landowner.
  • They are flexible and are written to meet the particular needs of the landowner;
  • They are permanent, remaining in force even when the land changes ownership. CLCF ensures that all future owners honor the terms of the conservation easement.
  • They are used to protect a wide variety of land, including farms, fields, forests, lakeshore, wetlands and scenic views.
  • By providing a framework for how the land can be used in the future, conservation easements can reduce the potential for disagreement when lands are passed on to or sold to successive owners.

Because each property and the needs of its owner are different, no two conservation easements are alike. Conservation easements strive to meet the needs and desires of the individual landowner while protecting the scenic and ecological integrity of the property. For instance, a conservation easement may apply only to a portion of a property and does not require public access. The specific activities the conservation easement prohibits are mutually determined by the landowner and Cedar Lakes Conservation Foundation.

The donation of a conservation easement to CLCF can qualify as a tax-deductible charitable gift. A conservation easement can also be donated by will.

In some instances, Cedar Lakes Conservation Foundation (CLCF) purchases land that is ecologically significant or possesses outstanding scenic and open space value.

One alternative to a fair market sale is a bargain sale, in which the land is sold at less than its fair market value.  A bargain sale combines the income-producing benefit of a sale with the tax-reducing benefit of a donation.  It can also avoid the expense of a sale on the open market.  The difference between the land’s appraised fair market value and its sale price is considered a charitable donation to the land trust and can be claimed as an income tax deduction. A bargain sale is a tool that can be a win/win for both a landowner and CLCF.

Selling a parcel at fair market value to a land trust may seem like an obvious way to conserve land. However, land trusts often have limited funds, and so CLCF often reserves fair market value purchases for parcels that have a broad-reaching ecological, open space or public benefit value. A fair market sale may not be as advantageous for a landowner as it might seem. Capital gains taxes on the property’s appreciated value, along with selling costs — such as a realtor’s commission — can substantially reduce profit from a fair market sale, particularly for landowners in higher tax brackets who are disposing of highly appreciated property.

By donating a remainder interest in a property and retaining a reserved life estate, a landowner can continue to live on the property during his/her lifetime. The way this works is that a landowner donates the property during their lifetime but reserves the right to use the property during his/her lifetime or for a specified period of time (called a reserve life estate). In this case, the landowner has donated a remainder interest in the property to the land trust. When the landowner passes or releases their interest in the life estate, the land trust assumes full title and control over the property.

This approach offers several advantages. With a reserved life estate, a landowner can continue to enjoy the land, while also knowing that the land will be protected in perpetuity.

In addition, a gift of a remainder interest may entitle a landowner to an income tax deduction when the gift is made. The deduction for the donation of a remainder interest is determined by reducing the fair market value of the donated property by the value of the reserved life estate of the landowner based on IRS actuarial tables. The income tax advantage of this strategy is less than from an outright tax donation but greater than from a gift by bequest. Lastly, as a holder of a reserved life estate, the landowner would continue to be responsible for property taxes and maintenance on the property until the land trust obtains full title.

Some landowners prefer to continue to own and control their land during their lifetime, and, instead of donating their land outright during their lives, transfer the land to the land trust by will at the time of their passing. This kind of donation is called a donation by will or by devise. Before writing the devise into a will, landowners should make sure that the Cedar Lakes Conservation Foundation (CLCF) is willing and able to receive the gift.

Placing the donation in a will rather than donating the land during the landowner’s lifetime means that the landowner will not receive income tax benefits from the gift and will continue to be liable for property taxes. However, removing the value of the property from the landowner’s estate could reduce estate taxes.

A land donation is one of the greatest legacies a person or family can leave to future generations and offers landowners many advantages.

Donating land is a relatively simple process. The Cedar Lakes Conservation Foundation (CLCF) often assists landowners in preparing and recording the necessary title work, arranging for surveying that may be needed, and helping the landowner reach decisions on important issues regarding the property.

Donating land may be a great option for a landowner who:

  • Wishes to make a lasting gift to the environment, to the community and to future generations.
  • Owns land that has significant conservation value and doesn’t have heirs or has heirs who are unable to protect the land.
  • Owns highly appreciated property–the sale of which would result in large capital gains taxes.
  • Owns property they no longer use.

Desires to be relieved of the responsibility of managing and caring for land that they otherwise treasure.

We’re Here To Help

Land trusts, like CLCF, are dedicated to helping landowners plan for the protection of their property. We would be honored to talk with you about the vision you have for your property and to discuss in more detail land protection strategies and how they may apply to your particular situation.