Critical to any estate plan is documenting how you want your assets handled when you are gone. There are two common ways to pass on your assets, through setting up a will or by creating a trust. These legal tools can ensure that your land will be handled in a way that meets your goals and those of your family.
If you are not clear about your intentions for the future of your land, it will be assumed by your estate planning attorney or the executor of your estate (the person you name to be in charge of carrying out your wishes) that you want to maximize the value of your estate. This may mean dividing and then selling or developing your land. If you do not want your land handled in this way, it is critical that you make your wishes very clear through one of two legal tools, the will or the trust. Below is a description of each.
A will is a legal document that communicates how your assets are to be distributed upon your death and who will be your executor. Your will offers a last chance to state how you would like your land treated when you are gone. If you do no other estate planning, consider incorporating your wishes for the land into your will. See the Sylvia Kelly story to learn about a landowner who specified in her will that a conservation restriction (CR) be placed on her land.
If you want a CR placed on your land after you pass away, instruct your executor accordingly in the will, and be as clear as possible about the terms of the CR, including where on the land it should be placed and the number of house lots allowed on the land, if any. Articulate what kinds of activities you would like to allow on the land, for example agriculture, forestry, or public access. Consider attaching a draft conservation restriction as an exhibit to the will so that there is no question about your intentions. Attorneys who specialize in conservation can help you develop a will that includes wording about the future of your land. It is advisable to contact the land trust or state conservation agency to make sure that they are willing to accept your land or CR. Learn more about choosing a conservation organization.
A trust creates a legal entity in which you may place certain assets. A trust brings the assets “out of your estate” and controls how they will be distributed without a will.
A trust separates your assets from outright ownership by yourself. Like a will, a trust specifies what must be done with your land when you are gone. If you have not taken steps to plan your land’s future through a will, a trust is your last chance to determine the future of your land. Be as specific as possible so that your family cannot misinterpret or ignore your wishes. For an example read the story of Sylvia Kelly.
There are many kinds of trusts and reasons for setting them up. Common reasons include avoiding the cost and delays of probate (the winding-down of your affairs under the supervision of the court), assigning a trustee to run your affairs if you are unable to do so, reducing or eliminating estate taxes, and keeping your estate private. By working with an estate planning attorney with experience in trusts, you can determine if a trust is an appropriate tool to achieve your goals. See the Thompson family story to see how they used a trust to pass land onto the next generation of their family.