Appendix A: Professional Guidance
As you plan for your land’s future, you may need to consult professionals whose expertise complements the skills of your local land trust members. MCHT or your local land trust can provide lists of attorneys, appraisers, and planners experienced in land conservation work.
The nature and structure of your particular conservation project will determine the degree to which advisors need to be involved. Some projects require their participation throughout the process; other projects may need only a quick review by advisors as you near completion.
Attorneys can offer valuable input on how best to structure a conservation gift or sale. Some prefer to be involved in all aspects of planning, while others are comfortable reviewing the final drafts of documents that land trust officials have prepared in consultation with the landowners. If you pursue an easement, your attorney will need to be involved in at least two stages of conservation planning: preparing the legal description of your property and reviewing easement language. By working with experienced land trust officials and getting family consensus on major decisions early in the planning process, you can minimize attorneys’ fees.
Consult with your accountant or other tax advisor early in the process to determine the best timing for your conservation project in terms of tax planning. Conservation easements, bargain sales and land donations may qualify as charitable gifts if you meet certain IRS criteria.
If you plan to pursue a federal income tax deduction for an easement or land gift valued at more than $5,000, a qualified appraisal is necessary to document the gift’s value. The IRS has established regulations that govern charitable gift appraisals; you and your attorney should be familiar with these requirements before contracting with an appraiser.
Find an appraiser who has prepared conservation easement appraisals before or who routinely does undeveloped land appraisals (not just residential or commercial building appraisals). Ideally, an appraiser will have direct experience documenting gift values for IRS review. View the appraiser as an objective analyst, not as an advocate. He may help you to clarify goals and weigh the financial implications of different approaches, but he should never be asked to work toward a given value.
You may request an informal estimate of value early in the process, before the appraiser has done market research or established the property’s development potential. While early estimates can be helpful, they are based on limited information and may change with new market information or as project details become clear. The more information you can provide to appraisers up front, the more quickly and effectively they can do their work. Plan on providing information such as the property deed, property survey (if available), information on existing restrictions or current use classification, draft or final language for the conservation easement (or other conservation plan), the property as shown on the town tax assessor’s map, a copy of the town assessor’s property card, current zoning or subdivision regulations, sales data on properties you think are comparable, soil maps, and timber maps or inventories.
If you are considering a conservation easement on any part of your land, the appraiser’s report must note the value of your entire property unencumbered by any easement (the “before” value) and its value subject to the easement restrictions (the “after” value). These two appraisals can cost several thousand dollars depending on the appraiser, the complexity of the project, and the accessibility of information.
Make sure you get your money’s worth: prior to hiring an appraiser, satisfy yourself that he understands the task at hand. When the draft or final appraiser’s report is submitted, see if it makes sense. Has the appraiser become familiar with the property? Has he clearly demonstrated its most profitable, likely and legal development potential and the value foregone under the terms of the restrictions? Does the report meet IRS standards and include supporting documentation with comparable sales?
Discuss these findings with the appraiser, your attorney and other knowledgeable individuals (such as members of your local land trust). Most appraisers will be glad to talk over their findings and correct any inaccuracies. Once you are satisfied, ask your appraiser for a signed IRS Form 8283, along with appraisal report, to file with your taxes.
The services of a land planner may be helpful in more complex conservation projects (particularly if you are contemplating additional house sites). An experienced land planner can help identify suitable areas for building and those that are not appropriate due to soils, slopes, wetlands or ecological features. The land planner’s role can complement that of a land trust, which works with you to determine the property’s inherent values and to find the best means for preserving them.
A conservation plan may require a boundary survey or a survey of a building or homestead area within an easement parcel. Land trusts, land planners and attorneys can help determine the appropriate level of surveying needed and can assist you in finding competent surveyors.