Conservation Options for Landowners
A decision to protect land is a personal one. It involves your vision for the future of your land, the land itself, and your financial and tax circumstances. Because every situation is unique, Conserving Carolina offers several different options for landowners who want to protect scenic beauty and natural resources.
If you want to protect your land, these options may allow for you to achieve a personal dream: to forever protect an important part of the landscape. We’re happy to discuss the options that would be the best fit for your goals and your land. You can reach our land protection director, Tom Fanslow, at 828-697-5777 x. 204 or [email protected].
Here’s an overview of some of the main conservation options that may be available to you:
- Donation of a conservation easement
- Donation of land
- Donation of a remainder interest
- Bequest and living trust
- Purchase of a conservation easement
- Bargain-purchase of easements or land
- Purchase of land
- Right of first refusal or option
Donation of a Conservation Easement
A conservation easement is the most widely used land protection tool available to landowners. Donating a conservation easement allows you to continue to own your land, while permanently protecting its resources. Easements are flexible and easily tailored to meet your needs. To donate a conservation easement, you will work with us to identify specific permitted uses of the property. These typically include agriculture, forestry, recreation, and other open space uses. The easement will limit or prohibit certain activities, including industrial, commercial, and residential development.
Conservation easements are designed to forever conserve the important natural resources of each property. An easement may cover portions of a property or the entire parcel. It is legally binding on all future owners and will be monitored by Conserving Carolina’s stewardship staff.
Donation of Land
An outright gift of land for conservation is one of the most generous legacies you can leave for future generations. Throughout our region there are parks, forestlands, and scenic open spaces that the public enjoys because of the long-term vision of conservation-minded landowners.
Donating land has many benefits. It can be a relatively simple and quick transaction that:
- Assures the permanent protection of a family property.
- Provides a charitable income tax-deduction for the full fair market value of the land.
- Avoids capital gains taxes on appreciated land.
- Removes the property from the donor’s taxable estate.
- Releases the donor from the expense and the responsibility of managing the land.
- Provides long-term support for Conserving Carolina.
In all cases, before accepting the gift, we consult with the landowner to discuss potential outcomes, both in terms of conservation restrictions and future ownership. If the land offers important public benefit, we might place conservation restrictions on the land and convey the property to a unit of government to provide public access. Or a tract may meet a strategic need for us, perhaps by making a connection in a trail network or offering an exceptional educational opportunity. In that case, we may want to retain ownership of the land.
If the landowner and the Conservancy determine that private ownership is the best outcome for the donated land, we will discuss placement of a permanent conservation easement on the property prior to a sale. The sales proceeds will support our work throughout western North Carolina and upstate South Carolina—so your gift keeps giving.
Donation of a Remainder Interest
This is option is much like a gift by will. You continue to own and manage your land, but immediately upon your death title to the land transfers to Conserving Carolina. You have converted your ownership to a life estate, and donated the remainder interest to the land trust.
With a gift of a remainder interest, you and your beneficiaries continue to own the land. At the end of a so-called measuring life (typically yours or the life of a family member, title and control of the property automatically transfers to Conserving Carolina. As is the case with any proposed gift of land to the Conservancy, we must consult with the owner to learn the intent behind the gift, and the owner’s expectations for future outcomes for the land.
The donation of a remainder interest offers several advantages:
- You can continue to own, use, and enjoy the property during her lifetime.
- After consulting with you, we can plan for the placement of appropriate conservation restrictions on the land.
- You are usually entitled to claim a charitable income tax deduction and enjoy that deduction during your lifetime (unlike a gift by will).
- If both parties agree that a future sale of the land by Conserving Carolina is permissible, then the the sales proceeds will help us protect additional land.
Bequest and Living Trust
Many landowners wish to retain maximum flexibility during their lifetimes and choose to carry out their conservation plans through a bequest or a living trust. You can conserve important lands by donating property or donating a conservation easement through your will.
A bequest is a provision in your will or a codicil (a will amendment) that instructs the estate’s executor to convey land or a conservation easement to Conserving Carolina. A living trust can achieve the same results, but avoids the probate process.
Both the bequest and the living trust can assure the permanent protection of the land, allow you to control the property during your lifetime, and may reduce your taxable estate. In either case, the terms of an easement can be developed through discussions with us, to achieve the goals of both.
Purchase of Conservation Easements
Conserving Carolina purchases conservation easements primarily on outstanding properties that are eligible for grant funding from sources such as the North Carolina Clean Water Management Trust Fund.
We might, in special instances, purchase easements on land that a community has identified as extremely important. In each of these cases, private contributions and/or public grants make the purchase possible.
Any purchase must be based on a recent appraisal rendered by a licensed appraiser. Conserving Carolina is not allowed to pay more than appraised value.
Bargain-Purchase of Easements and Land
Another approach providing advantages to you and Conserving Carolina is a bargain-purchase—selling a conservation property or easement to Conserving Carolina at less than full market value and donating the remaining value. This combines the income-producing aspects of a land sale with the tax benefits of a donation. The difference between the fair market value (as determined by appraisal) and the sale price is treated as a charitable contribution and can significantly reduce any capital gains taxes payable on the sale. For Conserving Carolina, bargain purchases make land and easement purchases more affordable. For the landowner, agreeing to a bargain sale greatly enhances our ability to raise funds for the purchase.
Purchase of Land
Occasionally, Conserving Carolina considers acquiring property that has exceptional conservation values of local, regional, or statewide significance. Such purchases depend on public and private fundraising. In some cases our role is to facilitate public ownership; we will convey properties to public agencies to be used as public recreation areas, state wildlife areas, state or national forests, or historic sites. Other lands may be sold to a private landowner subject to a conservation easement that permanently protects natural resources.
Right of First Refusal or Option
These two techniques provide for future land conservation. If you cannot afford to donate or bargain-sell an important conservation property to Conserving Carolina and are not ready to discuss a conservation plan, you may consider giving a right of first refusal. This right provides Conserving Carolina with the opportunity to match a valid purchase offer submitted to you by a prospective purchaser.
An option agreement is a means of assuring you that Conserving Carolina is interested in acquiring land or an easement from you, and also assuring potential funders that a grant award made to Conserving Carolina will actually result in acquisition. The contract period is variable, and often we ask for a right to extend. Any consideration we pay to obtain the option contract is negotiated with the landowner. Sometimes substantial sums are paid when we know funding for the purchase will soon be available, but when our fundraising effort is new we may pay only a small amount.
Conserving Carolina is not required to exercise its right to purchase, but can instead use the option period to develop a conservation plan and seek funding sources to conserve the property. The option agreement either specifies a fixed purchase price or identifies a method—such as appraisal—by which the purchase price will be determined. An option can also provide for a bargain-sale of the easement or conservation property.