How to Set Up a Land Trust in Michigan

Preserve property with a land trust.

Land trusts have a special definition in Michigan. In Michigan, land trusts are non-profit organizations helping land owners donate property and/or protect the environmental characteristics of a piece of land. A land trust may operate with one person or a full staff. Setting up a land trust in Michigan begins with the Michigan Non-Profit Association. Once a land trust is established, you can legally contribute your energy and efforts to helping owners distribute and preserve land within the borders of the state.

Things You'll Need

• IRS publication 557
• IRS form SS-4
• IRS form 1023
• IRS form 56
• Form 502, articles of incorporation
• Land trust agreement forms

Instructions

Creating a Non-Profit

1. Contact the Michigan Non-Profit Association (MNPA). Tell administrators that you wish to incorporate a non-profit organization and file for 501 (c) (3) status. Explain you desire to form a land trust and ask the administrators for guidance. Request the "IRS Publication 557, Tax-Exempt Status for Your Organization" package to review all updated rules, guidelines and instructions for creating a non-profit organization. Call the Lansing and/or Detroit "MNPA" regional offices, respectively, for address and hours of operation information, at: 517-492-2400 or 313-394-1980.

2. Reach out to the State of Michigan's Bureau of Commercial Services, Corporation Department (BCSCD). The "BCSCD" is a division of the Michigan Department of Licensing and Regulatory Affairs. Ask administrators for Form 502, Articles of Incorporation. Form 502 is necessary paperwork for anyone building a non-profit organization in the state. Complete the form and submit it with a $20 standard filing fee. Call the "BCSCD" for submission information, at: 517-373-3085.

3. Contact the Internal Revenue Service (IRS) to obtain an Employer Identification Number (EIN). The "EIN" is necessary to process non-profit tax documents in accordance with federal and state law. Fill out Form SS-4 and include all necessary non-profit information per form instructions to apply for your "EIN". Fill out Form 1023 to officially apply for 501 (c) (3) status with the "IRS". Submit all documentation to the "IRS" per form instructions.

4. Hold a board meeting and elect your board of directors once your non-profit is created. Establish bylaws with the board of directors, determine officer positions and delegate responsibilities to get your land trust under way.

Transferring the Property in Name Only

1. Go to the office of the clerk for the District Court in the Michigan County where you live or where the land is located. Explain your situation to the clerk and ask for appropriate Land Trust Agreement forms necessary to deed a property over to another person in name only.

2. Complete this process if you are elderly, for example, and wish to transfer a property in name only to avoid probate and have the land immediately transfer in full to this person after you are deceased. Fill in the forms completely as required per instructions.

3. Contact the IRS to obtain Form 56 if you are transferring a deed in name only. Consult the clerk and IRS for additional information and/or requirements to complete the process.

References

• Land Trust: Michigan Land Conservancies, Land Trusts, and Similar Organizations
• Southeast Michigan Land Conservancy: Protecting Land and Other Information
• Michigan Non-Profit Association: Starting a Tax Exempt Non-Profit
• Mackinac Center for Public Policy; Land Trusts: A Private Solution to Protect Michigan Farmland; Dr. Jefferson Edgens
• Internal Revenue Service: Form 56

Resources

• Michigan Non-Profit Association: Contact
• MI Department of Licensing and Regulatory Affairs: Contact
• Internal Revenue Service: Contact