Transfer of large properties within the family can be difficult for a variety of reasons:
- Land is not liquid. Farm, ranch and forest landowners are often land rich, but money poor. A large parcel of land may put your estate in a high tax bracket, but without liquid assets your heirs may have problems paying estate and transfer taxes when receiving ownership of your land after you pass. In many cases your heirs may have to sell off part or all of the land in order to pay these taxes. This invites the risk that it will be sold to developers and subdivided.
- One parcel, multiple heirs. When you have more than one heir, estate planning is essential to preserving your working landscape and business. If you do not have a plan for who gets what and a plan for how the property and business will be managed, it is more likely that your heirs will sell the property to reduce discord among themselves.
- The uninterested party. Even if you are able to devise a plan that allows you to transfer your property to multiple people, what happens if one person is not interested in taking part in managing the land or running the business? Do you have a plan to take care of all your heirs?
Donating a conservation easement is one tool to consider during the estate planning process. Donating a conservation easement may assist you and your family in many ways including:
- Reducing estate taxes.
- Generating revenue to allow equity among heirs
- Generating working capital to invest in the land and operation
- Securing that your land and water will be protected into the future
Estate planning involves much more than just drafting a will and paying taxes. When done correctly, estate planning can ensure that the business you’ve created and the land that you treasure continues to be available to future generations of your family.
San Isabel Land Protection Trust can make referrals to attorneys, tax consultants, estate planners, and other professionals who can help you with your estate planning needs. Please contact San Isabel for more information.