Estate Planning as a Tool for Conservation

Estate Planning

Elizabeth W. Erickson | September 05, 2019

Here in Montana, we are fortunate to enjoy incredible natural resources, open lands, large tracts of farm and ranch land, rivers, mountains, and scenic beauty. 

These resources provide us with a high quality of life and places to get outside and play. Many such private lands have been in families for generations, and require thoughtful planning to ensure they will remain for generations to come.  Also, many organizations exist to help protect lands for the conservation of natural resources and public recreation. Whether through protecting a family farm, ranch or other family property, or making a financial gift or a gift of land to an organization involved with conservation, thoughtful planning can maximize the financial benefits for the client while also supporting meaningful conservation outcomes.

Conservation Easements

A conservation easement is a property law tool that protects certain conservation values on real property in perpetuity or for a term of years.  Conservation easements limit certain activities on a property for the benefit of conservation and can conserve land or other natural resources for scenic, historic, recreation or other conservation purposes.  A well-drafted conservation easement can also provide important income and estate tax advantages to clients who choose to protect their real property using this tool.

Financial Gifts or Gifts of Real Property

Certain non-profit organizations or government agencies are qualified to hold real property for recreation or conservation purposes or have missions to protect and conserve land.  A gift can be general or be made with specific directions for how the money or land will be used, consistent with the client’s desires. Such a gift may be made during a client’s lifetime, or upon a client’s death via a bequest in a client’s will or trust.  Worden Thane’s experienced estate planning attorneys can help clients structure a financial gift or gift of real property to such an organization or entity to maximize available estate planning or tax benefits. It is also essential to work with the organization in advance to ensure they are able to accept the gift and put it to its intended use.

Charitable Remainder Trusts and Charitable Lead Trusts

Specialized trusts, such as charitable remainder and charitable lead trusts, are another estate planning tool that can be drafted to effectively benefit both a client (or a family) and a charitable organization. With these tools, there can be significant flexibility as to when the charitable organization or the client receives the benefit of the real estate. For example, under a charitable remainder trust, the charity ends up with the real estate after a period of use by the client or the client’s family, and, conversely, under a charitable lead trust, the charity enjoys the benefit of the land for a period of time before it passes back to the client’s heirs.  In short, naming a conservation organization or local government entity as a beneficiary under these trusts is a method by which clients can direct assets to an organization of their choice, while accomplishing other tax and estate planning goals, to include generating tax deductions.

Montana Qualified Endowment Tax Credit

This Montana State tax credit is for people and businesses making charitable donations to a qualified endowment, as defined by Mont. Code Ann. §15-30-2327.  Individuals, corporations, small business corporations, partnerships, trusts and estates with qualifying contributions may be eligible for a state tax credit of 20% of a direct charitable gift or 40% of the present value of a planned gift, up to $10,000, upon making a charitable donation to a qualified endowment.

Waterworks Hill, Missoula Montana - Estate Planning as a Tool for Conservation
Waterworks Hill, Missoula Montana

Worden Thane’s experienced real estate and estate planning attorneys can help you preserve and protect your land for future generations, or support the conservation efforts of others while maximizing your potential estate and tax planning benefits. Contact us to see how we can help you today!

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