How Does a Land Trust Work?


Purchase the Land

Due to different process applications and shorter legal procedures, land trusts are generally easier to pass on than property from the owners to the heirs. Establishing a land trust allows a community to purchase property that would otherwise be difficult for an individual to acquire, often due to the lack of technical or legal resources.

A community land trust commonly acquires land for the purpose of protecting the natural resources and ecology within that property. Many of these trusts rely on donations and funding to purchase the estate. In many cases, individuals can petition or advise an established trust to purchase an area of land believed to need special ecological protection. Individuals who buy land through a trust do so mainly to keep their asset values private. Their names do not appear on public records as the owner of the land.

Possess Land through Contributions

Many land trusts can be obtained via donations and at the same time offer benefits to sponsors and supporters. However, when using this method, be sure your requests are clear such as how you would like the land to be used. Also, take time to find a trust that matches your intents and has a strong, reputable track record. Donating real estate to a trust can be used to protect that property. Giving property to a land trust can ensure that assets are better protected with stronger provisions and enforcement. It is also a viable option if one does not have heirs to which property can be entrusted, or if heirs cannot agree on how to best use the land.

Secure the Rights of Property Use

A community land trust is obligated to own and use the property according to the standards set in the organization’s charter. This is the same case for those applied by individuals. These standards are called rights or easements and become part of the deed and are legally binding. For example, a conservation easement may prohibit building a structure more than three stories high. These and other restrictions becomes part of the deed. The same restrictions and rights are respected when ownership is transferred to another person. A conservation easement, in particular, can help minimize estate taxes. In the case where the property appreciates to a point that the present owner cannot afford to pay the respective tax, the easement can lower the land value. In possessing a land trust, it will also be beneficial to collaborate with private and governmental agencies.

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