Other Techniques

If you want to give your property to a conservation agency, but you also want to continue living on it or owning it during your lifetime, there are at least two ways you can arrange such a gift:

Donating Your Land in Your Will

A gift of land by bequest is recorded in your will and conveyed at the time of your death. When a such a bequest is received, the San Juan Preservation Trust immediately identifies and permanently protects any important natural values on the land. The Preservation Trust’s Board of Trustees then decides whether to add the property to our network of Trust-owned preserves or to sell the property with a conservation easement that ensures that the land remains protected in perpetuity. Proceeds from these sales are then dedicated to protect other priority island properties. You may find it helpful to discuss this process with the San Juan Preservation Trust to be certain that your intentions are document prior to creating your will.

EXAMPLE: Upon her death, Evelyn Leatham, a longtime resident of Lopez Island, left her small waterfront home and 7 acres of forest to the San Juan Preservation Trust in her will. By so doing, she removed the value of her home from her estate tax calculation. Upon receiving the property, the Preservation Trust immediately placed a conservation easement on the undeveloped portion of the land, permanently protecting the high bank “feeder bluff” shoreline and forest habitat. The house and surrounding property were then sold with the conservation easement in place. As Evelyn wished, the Preservation Trust will ensure that her undevloped land will remain in its natural state forever, and proceeds from the sale were divided between the Preservation Trust’s permanent Endowment Fund and the 2007 Campaign to Save Watmough Bight on her beloved Lopez Island.

A donation by bequest is an allowable deduction from your estate, therby reducing potential estate taxes. As this gift is made after your death, you cannot claim a charitable income tax deduction and you are still responsible for paying property taxes during your lifetime. A donation by bequest gives you flexibility: should your needs or wishes change, you can always revoke the bequest simply by changing your will.

Donating Your Land with a Reserved Life Estate

Rather than donating your land by bequest, you can actually turn it over to a conservation organization during your lifetime, while still reserving the right to live on it and/or use it during your lifetime (or through the lifetime of other designated individuals or family members). In this way, you know your gift has been accepted by a conservation organization, but actual possession doesn’t take place until your death.

EXAMPLE: After placing a restrictive conservation easement on his property near Surgarloaf Hill on San Juan Island, Bob Roseburg donated his land to the Preservation Trust with a reserved life estate. The Preservation Trust shares in the responsibilities and costs of land ownership, and Bob will continue to live on his beautiful hilltop property for the rest of his life with the knowledge that his land will remain protected in perpetuity.

While you may immediately enjoy the tax benefits of a donation with reserved life estate, the charitable value of your donation will be less than it would be for an outright donation of land (as you can continue to enjoy the property). You may claim an income tax deduction only on the “remainder interest” in the property that you donate (the value of the remainder interest is what’s left after you subtract the value of your lifetime use from the current market value of the property). The value of your use is determined by a qualified appraiser using Internal Revenue Service actuarial tables that are based on the life expectancies of those who hold a reserved interest in the property. The shorter the life expectancy of those who reserve the right to use the land, the higher the value of the gift.

Depending on your arrangement with the San Juan Preservation Trust, you may also continue paying property taxes through your lifetime. On occasion the Preservation Trust will assume some or all of the property taxes during the reserved life estate period, but as this can represent a significant long-term financial commitment, it requires special approval by the Preservation Trust’s Board of Trustees.

If your heirs use the property before its title is finally transferred on to the recipient landholding agency, the estate taxes remain the same. If the land is turned over to the agency at your death, then the property is not part of your taxable estate. You cannot revoke a donation with reserved life estate once you’ve signed the deed.

For more information on donating land through your will or through a reserved life estate, we encourage you (or better yet, your estate planner!) to contact the Preservation Trust.

For more information about the tax implications of private land conservation, click here.

All inquiries to the San Juan Preservation Trust are confidential and without obligation.