Land Donation

The TLC accepts donations of land, both for preservation or for resale to support our program according to the wishes of the landowner. Acceptance of any land donation is subject to a written agreement and due diligence investigations. While the TLC has not asked for an endowment fund to pay for future land costs, we do ask that the donor pay all closing costs, including all taxes and special assessments due. Unfortunately, while the TLC is a 501(c)3 non-profit charity exempt from property taxes, conservancies like the TLC are not exempt from special tax assessments for utilities, roads, and county drains. Property and income tax benefits to the land donor are highly variable depending on local taxing authorities, the donor’s tax situation, and the appraised value of the land.

The surest way to protect your land is to donate it to a land conservancy. While this is a huge step, it ensures that you know the fate of your land while you are still alive, and can potentially provide substantial tax benefits. You can even continue to live on and enjoy the property. Or, you can donate by trust, will, or other agreement. The landowner donates their land to a land conservancy during their lifetime through a standard warranty deed. Understandably, most landowners are not in a rush to give away their land. However, it may make sense for some to transfer ownership to a land conservancy. The immediate benefits to the land donor are that they will stop paying property taxes and they will also eliminate their liability associated with the land. They may also claim an income tax deduction based on the appraised value of the land. In addition, the TLC can grant lifetime access to a the land donor so that they can still enjoy the property for passive recreation. Land donors eliminate capital gains taxes and the donor’s heirs avoid estate taxes. Best of all, a land donor can rest assured that their property is both legally and physically protected as a natural area by a land conservancy, essentially forever. If the TLC ever ceases to exist, our bylaws require that all properties be passed on to another land conservancy or similar organization that will continue to protect the land. The donor also establishes a legacy that will be passed on through the preserve name, media coverage, and TLC publications.

Trust or Will

The landowner donates their land to a land conservancy through a trust or will. This method results in many of the same benefits to the landowner as an immediate warranty deed donation. However, disadvantages of donating through a trust or will are the up-front legal costs of assuring the trust or will guarantees a trouble-free transfer to a conservancy, and that the landowner continues to pay property taxes, cannot claim income tax deductions, remains liable for the property, and the donor’s heirs may still be liable for some estate taxes. While the landowner continues to own and control the land during their lifetime, they do not benefit from the stewardship provided by a conservancy. Regardless, if set-up properly, the landowner can rest assured that their property will be protected in the future, and they will establish a legacy that will be passed on through the preserve name, media coverage, and TLC publications.

Reserved Life Estate

The landowner donates a remainder interest in the land to a land conservancy through a reserved life estate agreement, allowing them to continue owning, living on, and using the land through their lifetime. Upon death, the life interest of the owner is released to the conservancy, which then has full ownership. As with an immediate warranty deed donation or donation by trust or will, the landowner can realize various financial benefits. But like donating through a trust or will, disadvantages are the upfront legal costs of assuring the reserved life estate guarantees a trouble-free transfer to a conservancy, and that the landowner continues to pay property taxes, cannot claim income tax deductions, remains liable for the property, and the donor’s heirs may not avoid some estate taxes. While the landowner continues to own and control the land during their lifetime, they do not benefit from the stewardship provided by a conservancy. Regardless, if set-up properly, the landowner can rest assured that their property will be protected in the future, and they will establish a legacy that will be passed on through the preserve name, media coverage, and TLC publications.

Conservation Easement

By supporting the TLC, we can help you. Property and conservation easement donations to the TLC protect your land in perpetuity, can reduce your property tax, and can reduce your income tax.

The TLC accept donations of conservation easements for the purpose of protecting natural areas, and in some cases, agricultural land. Because the establishment of a conservation easement requires production of a detailed baseline assessment report and other conservation easement documents, we usually ask the landowner to pay a fee. In circumstances where the landowner is unable to pay, we may waive the fee. However, the landowner may need to pay other costs that are beyond our control, such as for land surveying and attorney review. The TLC tries to work with the landowner to keep all costs to a minimum. The landowner should also keep in mind, especially in those cases where they receive a significant tax benefit, that the TLC is committed to
annual inspections of the easement premises and reporting in perpetuity. Property and income tax benefits to the conservation easement donor are highly variable depending on local taxing authorities, the donor’s tax situation, and the appraised value of the land.

Short of donation, you can place a conservation easement on your property, which is a legal agreement between you and a conservancy to limit development and protect your land in perpetuity. Conservation easement are tailored according to the wishes of the landowner. Contrary to the name, these easements have nothing to do with public access. A conservation easement does not limit property sale and is valid no matter who owns the property.

The landowner donates a conservation easement over all or a portion of their land to a conservancy. A conservation easement is a legal agreement to protect the land in perpetuity by restricting development rights. Although the agreement is referred to as an easement, it does not give the public the right to access the property. Through agreement with a conservancy, conservation easements can be tailored to the specific preferences of the landowner, allowing for minor impacts such as hunting, trails, firewood gathering, even small structures, and farming on agricultural land. The land conservancy enters the easement property once each year to monitor conditions and adherence to the easement agreement. Unlike an immediate warranty deed donation, the conservation easement donor continues to own the land.

The conservation easement does not restrict the landowner from selling the property or leaving it heirs. However, all future landowners must abide by the terms of the conservation easement restrictions. A major benefit of a conservation easement is that, upon sale or transfer, the property tax on that portion of land under easement remains capped. Depending on the easement donor’s tax situation, they may be able to claim a federal tax deduction based on the appraised value of the land, which can be deducted over a period of 15 years. The donor can also request a property tax reduction from the local tax assessor, based on the value of the potential development rights that are restricted by the easement. Potential property tax reductions depend entirely on the local assessing authority and are quite variable. Disadvantages of conservation easements are potential up-front costs of the conservation easement documents, legal review, and land survey, although there may be ways to avoid some of these costs. Other disadvantages are that the landowner continues to pay property taxes, cannot normally claim income tax deductions for the full value of the land, remains liable for the property, and the landowner’s heirs are still liable for some estate taxes. The owner also does not receive the full benefit of land stewardship provided by a conservancy.
Regardless, if set-up properly, the landowner can rest assured that their property will be protected in the future, and they will establish a legacy that will be passed on through the preserve name, media coverage, and TLC publications.

Bargain Sale

The landowner sells land to a land conservancy at a significantly reduced price and may claim an income tax deduction based on the appraised value of the land. Donation of land subject to mortgage can also considered a bargain sale for income tax purposes, as though the conservancy paid the amount due. The benefits of a bargain sale are obviously that the seller receives some revenue and the land conservancy pays less to preserve a natural area. Like a warranty deed donation, the seller will stop paying property taxes and they will also eliminate their liability associated with the land. They may also claim an income tax deduction based on the difference between the appraised value of the land and the sale price. In addition, the TLC can grant lifetime
access to a the land donor so that they can still enjoy the property for passive recreation. Sellers may also reduce their capital gains taxes, and their heirs avoid estate taxes. Best of all, the seller can rest assured that their property is both legally and physically protected as a natural area by a land conservancy, essentially forever. If the TLC ever ceases to exist, our bylaws require that all properties be passed on to another land conservancy or similar organization that will continue to protect the land. The donor also establishes a legacy that will be passed on through the preserve name, media coverage, and TLC publications.

Alternative Land Protection

There are some alternative land protection strategies that could benefit landowners and even provide income. These methods are not nearly as simple as donations or conservation easements in protecting land, but might be considered when a landowner needs income and is not quite ready for full preservation.

Wetland Mitigation

The landowner is paid by wetland permit holder to place a State conservation easement on their wetland as mitigation for permitted impacts at another location. Wetland mitigation is completely subject to agency approvals, usually involving the Michigan Department of Environment, Great Lakes, and Energy, United States Department of Agriculture, Natural Resources Conservation Service, or United States Army Corps of Engineers. For preservation of existing natural wetland as mitigation, the wetland must be rare or imperiled, of high quality, or serve an exceptional ecological function. Restoration of wetland is another possible type of mitigation, usually what is
known as a wetland mitigation bank. However, a large investment of funding and labor is required up-front before agencies approve wetland banks for sale of mitigation credits.

Wetland mitigation areas are generating significant revenue for landowners across Michigan and the United States, typically several thousand dollars per acre of mitigation credit. However, there are a lot of up-front costs and long-term management costs that are dictated by regulatory agencies. Because all wetland mitigation areas are placed under conservation easement, the landowner could receive all of the same benefits as a donor of a conservation easement to a land conservancy. The landowner can continue to own the land through their lifetime and may be able to generate additional income from the property by leasing it out for hunting or other passive uses. In addition, the land would be protected under a State of federal conservation easement that could potentially be better enforced than one held only by a land conservancy. TLC staff have been involved in several properties preserved as wetland mitigation and the landowner can benefit from our experience.

Deeded Access

The landowner is paid, usually by adjacent landowners, for limited or full access to their land. The right of access can be recorded with the register-of-deeds. For example, adjoining or nearby neighbors could pay the owner of a woodlot or other natural area to use as a park for passive recreation such as walking, nature observation, cross-country skiing, and other limited activities. This method is very similar to deeded access to private lakes. The right to access the land is fully transferable to new buyers. This method has many potential variables that could benefit the landowner and probably works best where there are not similar natural areas or parks within walking distance.

Based on demand, significant revenue could be generated for the landowner. A portion of that revenue could be used to pay for the costs of a conservation easement, which would then provide the associated benefits previously described. The revenue could also be used to fund the purchase of the land by a conservancy, which would then result in the many benefits of conservancy ownership. The property values of adjacent or nearby landowners with deeded access are likely to increase because of their exclusive right to access what essentially becomes a local private park. Disadvantages to the landowner include increased liability and having to deal with incompatible uses of the area. However, the responsibility for these problems would shift upon transfer of ownership to a land conservancy, neighborhood association, or similar group. Perhaps the most rewarding benefit of deed access is providing a place in or near a neighborhood where residents, and especially children, can easily enjoy passive outdoor recreation in a natural setting.

Access and Use Leases

The landowner receives lease payments on an annual, seasonal, or monthly basis for access and restricted use of their land. Typically, land is leased for hunting or farming in Michigan, but could be leased simply for passive recreation such as walking, nature observation, and cross-country skiing, or heavier uses such as collection of wild herbs, berries, nuts, and mushrooms, fishing, hunting, camping, horse riding, mountain biking, and other uses as determined by the landowner. As with other protection methods, there are many potential variables that could benefit the landowner and probably works best where there are not similar public natural areas nearby.

Access and Use Fees

In the same way that a landowner could receive lease payments for access or restricted use of their land, they could charge access or use fees on a daily or per-use basis. This method is more administratively difficult than leasing, but avoids a long-term commitment by the landowner and may be more attractive to lower income users. Again, this method could be used for passive recreation such as walking, nature observation, and cross-country skiing, or heavier uses such as collection of wild herbs, berries, nuts, and mushrooms, fishing, hunting, camping, horse riding, mountain biking, and other uses as determined by the landowner. As with other protection methods, there are many potential variables that could benefit the landowner and probably
works best where there are not similar public natural areas nearby.

Preserve Club

The landowner joins with other individuals to form a club or association in which all members share access and use of the property. Access or use rights can be sold as annual memberships, shares, or other ways. As with lease or fee strategies, the organization could allow fishing, hunting, camping, horse riding, and mountain biking, or more passive recreation such as walking, nature observation, cross-country skiing, and other uses. As with other protection methods, there are many potential variables that could benefit the landowner, and probably works best where there are not similar public natural areas nearby. If the group establishes itself as a non-profit organization, there could be significant tax benefits.

Sustainable Resource Extraction

The landowner receives income from sustainable resource extraction or uses compatible with the natural area. Resource extraction activities could include collection of medicinal or edible plants, berries, nuts, and mushrooms, collection of seeds and transplants for restoration of other areas, sustainable cutting of firewood or harvest of timber, and uses such as nature observation, field trips, nature-related training, fishing, hunting, camping, and other activities. Depending on the natural resources available and effort, landowner revenue can be highly variable. As with other protection methods, there are many potential variables that could benefit the landowner and
probably works best where there are not similar public natural areas nearby. If the group establishes itself as a non-profit organization, there could be significant tax benefits.