Every landowner’s circumstances are different. The Land Trust for the Little Tennessee (LTLT) strives to serve each family and landowner in a manner that accomplishes their goal of conserving their land with consideration of those circumstances including their financial situation as well as the conservation values of their property.

Donation of a conservation easement is the most common method of land conservation used by LTLT and the following outline shows the general process of conveying a conservation easement to LTLT. The process may take anywhere from a few months to a couple years, depending on a variety of factors.

1. Planning and Gathering Information
The first step for any landowner is to engage in some planning and information gathering. A good place to start is by calling LTLT and asking for information on different options for land conservation, including conservation easements. During the planning process, LTLT strongly recommends that each landowner meet with a legal and/or tax adviser who will help them with their overall goals of conserving the property, estate planning, financial planning, or retirement goals.

2. Site Visit, LTLT Board Approval and Negotiating the Terms
After the initial planning and information gathering phase, the second step involves the landowner contacting LTLT to schedule a site visit. LTLT staff or someone acting on behalf of LTLT will meet with the landowner and discuss the conservation values of the land and the landowner’s vision for the future management of the land. Conservation easements include a variety of provisions, and most of them are negotiable. Among the key issues to be worked out are whether any building lots will be reserved and what uses of the land will be permitted, such as forest management and agriculture, or prohibited, such as intense subdivision and surface mining. The conservation easement project is then presented to the LTLT Board of Directors for approval based on the conservation values of the land, whether or not it is a prudent investment of the time and resources of LTLT, and whether it advances the mission of the organization - each project is considered based on its merits.

When the Board approves the project, LTLT customarily requests a signed Letter of Intent from the landowner. In some cases, LTLT purchases for a nominal fee a more binding Option to Acquire a Donated Conservation Easement. This is to protect LTLT’s considerable investment in staff time and resources before the signing of the easement and to ensure that a change of plans or death of an owner does not cancel completion of the easement.

After approval by LTLT Board, subsequent meetings and communication between LTLT Staff and the landowner will involve negotiating the specific language of the conservation easement – putting the language into the legal document (the conservation easement) that captures the landowner’s vision while protecting the conservation values. Although LTLT will usually start with a model easement, this document must be tailored to meet the particular goals for the landowner and the property.

Note: The transaction costs involved in the following four items are normally paid by the landowner and are generally tax deductible from the landowner’s income taxes. LTLT recommends that you consult your tax adviser.

3. Appraisals, Surveys, Other Supporting Documentation and Stewardship Fund If you will be seeking a tax deduction for the donation of an easement, you will need to commission an appraisal of the value of the easement. LTLT can refer you to appraisers who have experience in conservation transactions.

The property or the area of the property to be included in the conservation easement must have a current metes and bounds survey or be clearly described, generally in metes and bounds, for the conservation easement.

LTLT staff will work with the landowner to prepare what is called a Baseline Documentation Report. The IRS requires this documentation if the landowner is seeking a tax deduction and LTLT requires it on all easements held by the organization. This documentation will serve as a benchmark for ensuring that your vision for the property and the restrictions that you put in place are being upheld. The cost of this Report will vary depending on the project and property.

LTLT has a legal obligation and an obligation to the landowner to annually monitor and, if necessary, defend in court all of the easements it holds – in perpetuity. In order to do this, LTLT’s due diligence requires that a sum of money sufficient to monitor the easement, based on the acreage, rights retained, etc., and an additional amount to cover the cost of inflation be put into its Stewardship Fund.

4. Signing the Easement
As with any real estate transaction, there comes a time for all of the parties to sit down at a closing. As a general rule, the deal becomes official at the moment the easement is signed.

5. Claiming Tax Benefits
Just because you have signed your easement does not mean that you automatically receive tax benefits. Again, LTLT recommends that you consult with your tax adviser throughout the process. If the easement meets basic requirements, you should be able to claim a federal income tax deduction for your conservation donation. To do so, you must file a special form with your income tax return (Form 8283) that must be signed by LTLT. The amount of your deduction will be determined by the appraisal of the easement that you commissioned in Step 3. The appraiser is required to sign the Form 8283 also.

In addition to the federal income tax deduction, the State of North Carolina offers an income tax credit for conservation donations. The NC State Income Tax return must be accompanied by a certification from the Department of Environment and Natural Resources. The necessary forms and instructions are located at www.enr.state.nc.us/conservationtaxcredit.

6. Monitoring and Enforcement
As the landowner, you will continue to remain in touch with LTLT after the easement is completed. Most importantly, LTLT staff will make an annual monitoring visit to the property, preferably with the landowner, to make sure that the terms of the easement are being followed.