My dad, a WWII veteran is in the middle stages of Alzheimer"s and unable to walk. I have had several surgeries on my back and not able to take care of the farm. I have been reading this forum for a long time and would value your opinion. We are looking at planting all the open land in pines and placing the entire 500 acres into a conservation easement. Hopefully this would help prevent rest of siblings from selling when Mom and Dad are gone. None are interested in farming and BIL has stated he wants to sell. I have told them that no more land is being made and that the farm is still a great place for grandkids and great grandkids. Does anyone have an opinion or experience with Conservation Easement.
- Thread starter goose12
- Start date
Those easements are very binding and might tie your hands more than you can imagine down the road. Is the land that poor in quality that it is not suitable for most agricultural crops? Lands tied up in conservation easements are magnets for environmental groups when the time comes that you or somebody else wants to end or alter the agreement. I would look at talking with an attorney to see if there is time and opportunity given the dynamics of the family if a trust could be established to hold the property.
From what i understand, the tax rates would go down and the property value would not be as much. This in itself would lower the opportunities of selling because the land has little value because of the restrictions resulting from easement. And yes, the land is that poor, but is still good for hunting and fishing.
Ken Macfarlane
Well-known Member
Had your father expressed any opinions on what should happen before his mental health declined?
Is there a possibility of renting it out? Some folks (7 brothers and sisters) local to us formed a corporation before their father passed away and they inherited shares for the farm and land. They get dividend payments and can sell their shares to the others or vote on what should happen. I'm not sure what constitutes a quorum for putting it up for sale, simple majority or 5 out of 7? Not sure.
Is there a possibility of renting it out? Some folks (7 brothers and sisters) local to us formed a corporation before their father passed away and they inherited shares for the farm and land. They get dividend payments and can sell their shares to the others or vote on what should happen. I'm not sure what constitutes a quorum for putting it up for sale, simple majority or 5 out of 7? Not sure.
Welding man
Well-known Member
- Location
- West Virginia
It's all about what you want to do with your land. It you don't like roads,jobs,progress or land development by all means this is what to do with it. That is about all they are used for in my area is to stop progress.Personally I never liked paying taxes on something I couldn't use.
I've set up where the large part of my ground will be placed into a blind trust with specific family members having control once me and the Mrs are gone. Family will have access to most of the ground, but local 4H and FFA will receive share of the proceeds of land rental (over and above cost of ownership). University of Kentucky School of Agriculture will have final say in how it will be farmed. Agreement is for 99 years beyond date of my death. Then property reverts back 100% to family. It's rather complicated, but at least I know land will be farmed, not sold, and a couple inlaws won't get their hands on anything I worked hard to get, while family can still enjoy the place. Check back in a 100 years or so for how this all works out. 
I would stay away from any and all gov't sponsored conservation easement programs...that is trouble you don't need!
Most are not a plant and leave program anymore and if you don't follow the rules, you don't get the payment.
I say let history be your guide...look at the wealth lost due to the CRP program since the early 70's...the areas that accepted the program - got very poor with depressed land values...
The areas that didn't accept the program grew in large properous towns and suburbs....Just compare northern Iowa to southern Iowa as a quick simple example.
If it were me - and you didn't want to farm it...I'll assume your not cash renting because its marginal farm ground...I'd get it planted to pasture and lease it to a cattle guy...
The cattle supply in the US is at all time historic low...real estate for grazing also at an all time low due to the high grain prices....
Most are not a plant and leave program anymore and if you don't follow the rules, you don't get the payment.
I say let history be your guide...look at the wealth lost due to the CRP program since the early 70's...the areas that accepted the program - got very poor with depressed land values...
The areas that didn't accept the program grew in large properous towns and suburbs....Just compare northern Iowa to southern Iowa as a quick simple example.
If it were me - and you didn't want to farm it...I'll assume your not cash renting because its marginal farm ground...I'd get it planted to pasture and lease it to a cattle guy...
The cattle supply in the US is at all time historic low...real estate for grazing also at an all time low due to the high grain prices....
Taxes and land value could be a 'here-there' sort of thing. 'Here', anything in WRP or CRP is still assessed the same as if it were not in a program, because NJ doesn't take into account income from the land, just what they think the land is worth. So if it makes $50 or $5000 an acre, taxes are the same.
I've not had experience with WRP. CRP transfers when the land is sold, and it may not lower the value. The new owner can just simply wait out the contract term. There is a farm near here that just did that. The developer who bought it did so 8 years ago when the market was 'hot', and sat on the CRP until it expired last year. . . but in the process hosed himself because land values have deflated due to the new housing market going bust . . . so he has leased it out to a nearby farmer waiting for things to improve. Now, if you go into something more permanent, like a CREP program for reforestation or something to that effect, it may very well devalue the property.
I've not had experience with WRP. CRP transfers when the land is sold, and it may not lower the value. The new owner can just simply wait out the contract term. There is a farm near here that just did that. The developer who bought it did so 8 years ago when the market was 'hot', and sat on the CRP until it expired last year. . . but in the process hosed himself because land values have deflated due to the new housing market going bust . . . so he has leased it out to a nearby farmer waiting for things to improve. Now, if you go into something more permanent, like a CREP program for reforestation or something to that effect, it may very well devalue the property.
My dad rented the pasture for last 3 years to local farmer. When asked about payment of rent, they told my dad that they had paid too much for fertilizing pasture and could not pay rent. This spring my Mom asked farmer for rent and was told that $10.00/acre was going rate. She accepted it. I am 4 hours away unfortunately and cannot monitor what goes on.
The farm bill is very uncertain right now. It could have a big impact on future land prices.
Sometimes you have to honor your siblings desires just as they have to honor your desires. I would not try to "ruin" the whole property in hope of gettng it all for yourself for free or at a low cost. That may not be your intention at all, but your post does make it sound that way. Instead, be prepared to buy out your siblings at a fair price, or divide off a portion that you can afford, and be upfront about it with your family.
Good luck.
Sometimes you have to honor your siblings desires just as they have to honor your desires. I would not try to "ruin" the whole property in hope of gettng it all for yourself for free or at a low cost. That may not be your intention at all, but your post does make it sound that way. Instead, be prepared to buy out your siblings at a fair price, or divide off a portion that you can afford, and be upfront about it with your family.
Good luck.
Any of these conservation easement type porgram are simply a SALE. You sell to the conservation group they then do what they want to. Most simply let it grow up in weeds. In addition to doing nothing they will allow the major donor to the group pick X acres on which he can do what he wants, usually build an expensive home.
You are better off putting it in a trust, at least you can control what happens to it.
You are better off putting it in a trust, at least you can control what happens to it.
I almost did it on 75 acres of woods and wetlands in northern NY (Jefferson Co, Tug Hill Plateau). I backed out though. If I had done it - I'd gotten $20,000 and not be able to ever build or change any of the land. No new roads, etc. But I would be stuck paying taxes on it forever unless I sold it. Who in their right mind would ever buy it? Three years later I sold it for $75,000.
Does your state have an MFL (managed forest land) program or something like it? I have placed our woodlot in that and I pay never more than $6 per acre in taxes for 50 years. I could get by with $3 per acre but then I would have to allow just about anyone on the land anytime. Hunters, campers, hikers, etc. The way I have it, I control access. The state forester spends three days per year doing forestry stuff. Health of trees, designating which should be cut, etc.
the way i understand conservation easments is,(1)IT doesnt stop the land from being sold (2) it stops the land from being used for any other purpose than conservation for ever. its simply permanent instead of being like a crp,or most other programs. when land in a conservation easment does sell, its normaly valued far less than regular market price because its unusable for any other purpose. around here folks who get into that program are normaly folks who have no heirs,have built up a fair amount of land,and wish to eventualy transfer ownership to the state as a wildlife area or something.as long as they live they basicaly own it,the program buys it,they live off that income. when they die if no one else buys the land or its of importance to the wildlife or conservation folks,they buy it. farmers are not much interested because they cant use it,the only others with a interst would be sportsmans clubs etc. IF your not the sole owner,or heir to this property,and the others want to sell,you would be hard pressed to get it in a conservation easment I would think.you may put your part in a easment if its large enough ,but if your not the sole owner i doubt they would even talk to you. another thing to be aware of,unless this land is left soley to you,when you plant trees and your folks die,those trees are not yours either.even though you planted and did all the work.as long as your folks are living its theirs,but not yours. sad to say it but its a fact,that you probably cant get around. MAYBE,and im not saying it would work ,if you got power of attorny because of your dads condition,he had a preexisting will,dated before the power of attorney document leaving the land soley to you,POSSIBLY, you could get by. But it sounds to me like a family battle brewing. if your dad really wishes to do this,he needs to do it now, your for all intents and purposes not involved. he does it and no one can block it,unless hes declared incompetent of course,but your hand are im afraid legally tied it sounds to me like.consider putting it in a nonrevokable trust,with the stipulation on the trust that all parties have to agree to sell it. that to me would be the best way from your standpoint to keep it intact,at least for your lifetime.value would still be there for future generations,but it would be protected until all heirs or their heirs agreed to sell. land would remain in the trust basicaly for all to use, but any profits made ,regardless of who made them, would go to the trust and not any individual.again any improvements or repairs you did would become trust property, so you yourself would be limited as to use as would all others. you could even have to pay the trust rent after your parents death if you live in their home. its not agood thing any way you look at it when families disagree.
gene bender
Well-known Member
Why would you do that when they tell us our food production needs to double by 2050 how are people going to eat a tree. Just beceause your family doesent get along should not deter someone from help to feed the world even here in the USA
Here in New York - if I enter any of my woods into "managed forest" for the tax break - the state can send someone in to log it whenever they deem necessary. Then once logged the proceeds go to the state and the town government. Not a good deal as I see it. I'm paying around $8-$10 per acre in total taxes and at least I own it. Well - mabye "lease" is better term since if I fail to pay the taxes, I lose the land.
All logging operations are left to me to arrange and income is mine and state income tax on proceeds is graduated up from 0% to regular rate over 10 years. If I don't comply, I could lose the deal and then real estate tax would go back to what it was before. Ag land in Wis is taxed very low however this would be classed as "recreational" land. A convenient way for townships to collect the highest tax imagineable. So, it is to my economic advantage to keep it in MFL.
Daryl in PA
Member
Here is a link to PA's CREP program.
http://www.portal.state.pa.us/portal/server.pt?open=514&objID=622399&mode=2
My wife has 38 acres in this program, that pays 125.00 per acre. The land is hilly and only worth about 25.00 per acre to farm. Her parents inherited the land and put it into CREP for 15 years. We have about 5 years left, then it can come back out
http://www.portal.state.pa.us/portal/server.pt?open=514&objID=622399&mode=2
My wife has 38 acres in this program, that pays 125.00 per acre. The land is hilly and only worth about 25.00 per acre to farm. Her parents inherited the land and put it into CREP for 15 years. We have about 5 years left, then it can come back out
Growing large 'prosperous' towns and suburbs ain't always a good thing. Come to where I live and see how 'prosperous' things are now versus 10-15 years ago. I am dismayed at how many vacant homes and commercial buildings are around going to waste, not generating tax income and becoming a burden on the communities they are in . . . .
Welcome to my world. I live in what is the "fastest growing county in Kentucky". Translated into simple terms, that means more houses where they don't really need to be, more crime, higher property taxes, lower quality of government services, more traffic, more new neighbors sticking their noses into my business, ect. Progress ain't so progressive in my eyes. What was once Mayberry is now turning into a war zone. I was plenty happy when our property wasn't worth so much.
John Fulton
Member
Don"t get Conservation Reserve Program (CRP), administered by Farm Service Agency (FSA, a part of US Dept. of Ag), and Conservation Easements (run by various State agencies), mixed up. CRP has a time limit 9,usually 10-20 years) and requires a semi- permenant planting of forage or trees and provides an annual rental payment based upon average land rental in your area.
Conservation easements are, as I stated, a state program which is a permenant easement recorded in the county seat with your legal deed. The objective of the easement is to maintain the land in agriculture/forestry permantly. HOWEVER you MAY tailor the eesement to your liking ie. provide for children to build a homestead, add barns, expand ag development, etc. You may even exclude portions of your land to allow development. My suggestion if that you thoroughly research your options by contacting your local FSA, NRCS or Soil & Water Conservation District Offices. These folks will be able to set down with you and discuss your concerns and reccommend a plan you can live with.
Conservation easements are, as I stated, a state program which is a permenant easement recorded in the county seat with your legal deed. The objective of the easement is to maintain the land in agriculture/forestry permantly. HOWEVER you MAY tailor the eesement to your liking ie. provide for children to build a homestead, add barns, expand ag development, etc. You may even exclude portions of your land to allow development. My suggestion if that you thoroughly research your options by contacting your local FSA, NRCS or Soil & Water Conservation District Offices. These folks will be able to set down with you and discuss your concerns and reccommend a plan you can live with.
John Fulton
Member
As an adjunct to my previous post, I should have stated that I recently retired as a Conservation Specialist with a Soil & Water District in Virginia. In this capacity I worked closely with both state Conservation Easements and with federal CRP programs. Neither program in any way limits agriculture or forestry management of the land (well the CRP does require forage or tree plantings for a time limit of 10-20 years, but you do recieve a yearly payment.) The Conservation easement only requires that land be maintained in forestry/ ag, as I stated before.
If you are interested in either program, I do suggest you do more research with your county offices before making your final decision.
If you are interested in either program, I do suggest you do more research with your county offices before making your final decision.
Traditional Farmer
Well-known Member
- Location
- Virginia
Pretty dumb to try to destroy the value of the property out of spite.You let those folks get a hold of it and no one will be able to use it just pay the taxes.Conservation easements are total ripoffs.
Of course the local poachers will appreciate it.
Of course the local poachers will appreciate it.
Anonymous-0
Well-known Member
Agree don't like conservation easements at all. I would have his father put it into an indefinite trust and make him trustee. Trusts are tough to be broken if made carefully.
Now you guys are into a whole nuther discussion...I did not suggest he develop the land into houses or commercial buildings...I suggested he rent it for pasture.
The housing bubble was driven by foreign investment and accomodative interest rates made possible by the federal reserve bank...when it popped - the buyers and renters evaporated and you got unfinished subdivisions and unrented commercial space - thats a whole nuther discussion as well as one that was easily foreseeable...
With respect to too much fertilizer - that is silly - make em sign a contract for rent... if they loose their butts on fertilizer...NOT YOUR PROBLEM! They pay just the same!
Also - don't talk to one person - advertise you are taking bids in multiple local papers for pasture ground...See what comes up.
One person telling you 10.00 per acre is NOT doing your home work.
And again - take a look at the lower counties of iowa...their assessments are lower - they generate less revenue because they can't pay any tax revenue because their 15 year old CRP or Cons Eastment payments don't buy what they did when they signed the contract...its called dollar DEVALUATION...and its gonna get allot worse in the very near future...remember the fed???? its on QE3 right now - printing 60 Billion per month! This monetization is going to cause Grain to continue to soar to new hights....combine that with real cattle and hog shortages and those comm's are going to continue to soar - cattle prices and hog prices will explode....
You are sitting on an income maker - its up to you to decide how to make it prosperous...
The housing bubble was driven by foreign investment and accomodative interest rates made possible by the federal reserve bank...when it popped - the buyers and renters evaporated and you got unfinished subdivisions and unrented commercial space - thats a whole nuther discussion as well as one that was easily foreseeable...
With respect to too much fertilizer - that is silly - make em sign a contract for rent... if they loose their butts on fertilizer...NOT YOUR PROBLEM! They pay just the same!
Also - don't talk to one person - advertise you are taking bids in multiple local papers for pasture ground...See what comes up.
One person telling you 10.00 per acre is NOT doing your home work.
And again - take a look at the lower counties of iowa...their assessments are lower - they generate less revenue because they can't pay any tax revenue because their 15 year old CRP or Cons Eastment payments don't buy what they did when they signed the contract...its called dollar DEVALUATION...and its gonna get allot worse in the very near future...remember the fed???? its on QE3 right now - printing 60 Billion per month! This monetization is going to cause Grain to continue to soar to new hights....combine that with real cattle and hog shortages and those comm's are going to continue to soar - cattle prices and hog prices will explode....
You are sitting on an income maker - its up to you to decide how to make it prosperous...
Anonymous-0
Well-known Member
Wish you the best of luck... That land is more valuable to you than you think if you are smart enough to take it's lesson and live the rest of your life accordingly.
It's gonna show you sometime in the future how good or how worthless the rest of your family is.Sounds like you already have a taste of one BIL (and prolly that sister). Good luck....
Gleanerguy
Member
Your plan to put the farm into a conservation easement to keep it from being sold, will not work. I know about this because I work for a government agency and I have placed easements on properties. As someone else mentioned, an easement does not prohibit the property from being sold. Most easements restrict activities on the property, especially cropping type activities. The goals of most easements are to protect the property from erosion (by planting certain types of trees and/or certain types of grasses), preserve or enhance wetlands (by placing berms across ditches and/or putting in ponds). Also, as an added benfit wildlife habitat is improved. Most easements do not prevent hunting on the property, so in some areas, a property is actually more saleable with an easement because people want to buy hunting land.
Hate to burst your bubble, but you need to seek a different avenue to achieve want you want.
Hate to burst your bubble, but you need to seek a different avenue to achieve want you want.
What will happen 50 or 100 years from now when folks want to break these Conservation easements.
Most folks here are putting the easements on land to prevent development but in time someone is going to want to break the easement. Will be a lawyers delight in 50 years.
Most folks here are putting the easements on land to prevent development but in time someone is going to want to break the easement. Will be a lawyers delight in 50 years.
Why do you feel you have the right to control what happens to land forever. You ,me or anyone else only have a lifetime lease on land entrusted to us by a deed. Land was here a long time before we were born, it will be here a long time after we are all dead. I don't believe we have the right to tell future generations they can not use land for food production or any other agricultural use. Just my 2 cents worth.
Joe
Joe
Goose: There are several things going on here that you have not answered.
1) Whose name is on the deed??? If it is in your father and mother's name then if he is not of sound mind then nothing can be done without some one being his legal guardian. Once a person is diagnosed with Alzheimer any contract with his or her name on it,, without a court appointed guardian, will not stand any type of court challenge.
2) Are you or your Mother his court appointed guardian?? If you are then you are required to look out for his best financial interests not yours. So if you do something that devalues the farm like the permanent easement then you can be financially libel.
3) Why do you have more say than the rest of your siblings??? You say "we are thinking of doing this" who is the we???
4) You say you live four hours away and can not walk the property. So what good will it do you to tie it up from selling???
Goose I understand the wanting the land to stay in the family but the family has to want it to stay in their possession. If you try to force it on them then there will be ZERO family left. You will never have another Thanksgiving or Christmas together if they feel you have sold them out. Plus I bet that some of them may be better off than you. In a legal battle the deepest pockets have a much stronger hand.
So I would not try to force anything on the siblings. Get everyone together. If your Mother is of sound mind then have her tell them what she wants to happen. NOT WHAT you want to happen. What she thinks your father and her would want to happen. Then try to work through this as a family. Reason being is that if you turn this into a battle the family will be the first thing lost. I have seen it happen all to often.
FIRST thing to do is throw the joker "farmer" off the pasture. If they decided to fertilize the pasture then they got the benefit so they still should have paid rent. Also check with the county Extension office they will have a list of the average rental rates for your state/county. Then if the current renter/crook wants to give the going rate then fine but get it all in writing.
Goose this is going to sound harsh but here goes: If you have not been able to help your parents get the rent they should have, then how are you going to help them with something as complicated as a Conservation easement???? These easements are very complicated. They are very different from state to state. In some states you are basically turning all the future land use decisions over to a state board.
1) Whose name is on the deed??? If it is in your father and mother's name then if he is not of sound mind then nothing can be done without some one being his legal guardian. Once a person is diagnosed with Alzheimer any contract with his or her name on it,, without a court appointed guardian, will not stand any type of court challenge.
2) Are you or your Mother his court appointed guardian?? If you are then you are required to look out for his best financial interests not yours. So if you do something that devalues the farm like the permanent easement then you can be financially libel.
3) Why do you have more say than the rest of your siblings??? You say "we are thinking of doing this" who is the we???
4) You say you live four hours away and can not walk the property. So what good will it do you to tie it up from selling???
Goose I understand the wanting the land to stay in the family but the family has to want it to stay in their possession. If you try to force it on them then there will be ZERO family left. You will never have another Thanksgiving or Christmas together if they feel you have sold them out. Plus I bet that some of them may be better off than you. In a legal battle the deepest pockets have a much stronger hand.
So I would not try to force anything on the siblings. Get everyone together. If your Mother is of sound mind then have her tell them what she wants to happen. NOT WHAT you want to happen. What she thinks your father and her would want to happen. Then try to work through this as a family. Reason being is that if you turn this into a battle the family will be the first thing lost. I have seen it happen all to often.
FIRST thing to do is throw the joker "farmer" off the pasture. If they decided to fertilize the pasture then they got the benefit so they still should have paid rent. Also check with the county Extension office they will have a list of the average rental rates for your state/county. Then if the current renter/crook wants to give the going rate then fine but get it all in writing.
Goose this is going to sound harsh but here goes: If you have not been able to help your parents get the rent they should have, then how are you going to help them with something as complicated as a Conservation easement???? These easements are very complicated. They are very different from state to state. In some states you are basically turning all the future land use decisions over to a state board.
My opinion... if you plan on planting it to pine and tieing it up in a conservation easement so they can't sell it... but are still liable for it's upkeep... you deserve the lawsuit and/or taxsale that will come. If anyone tried to pull that crap on me I'd force a sale post haste, one way or another. I want no part of paying for someone else's legacy.
Rod
Rod
Steve in VA
Well-known Member
- Location
- Natural Bridge Virginia
goose,
I too own in the Va mountians. A number of these responses don't match my understanding of how this works. John Fulton's responses do match. A farmer near me just put >400 acres in easement. he negotiated the number of future home sites. When I asked about limitations he stated that there were NO limits on farming, the property could be sold and the easement transferred with the deed. He can conduct no open-pit mining or drill for gas/oil, and clearcut no more than 10 acres of timber a year. One thing to bear in mind is that the easement will lower the land value because it is a restriction on future use and so, if you have any lien holders, then you need to coordinate with them since any easement will affect them too.
I too own in the Va mountians. A number of these responses don't match my understanding of how this works. John Fulton's responses do match. A farmer near me just put >400 acres in easement. he negotiated the number of future home sites. When I asked about limitations he stated that there were NO limits on farming, the property could be sold and the easement transferred with the deed. He can conduct no open-pit mining or drill for gas/oil, and clearcut no more than 10 acres of timber a year. One thing to bear in mind is that the easement will lower the land value because it is a restriction on future use and so, if you have any lien holders, then you need to coordinate with them since any easement will affect them too.
Traditional Farmer
Well-known Member
- Location
- Virginia
On the pasture he's lucky to have a person renting it if they're keeping up the fences.Hay and pasture land here goes cheap and in some counties land owners are having to pay people to cut their hay and bale it and the guy that cuts the hay gets to keep the hay.Why? Because to qualify for a ag tax rate the place has to be actively farmed in some way by a real farmer that can verify they take a crop off the land or run livestock stocked at a certain rate.Putting the land in Conservsation may affect the ag exemption also which would mean paying back taxes at the regular rate for 5 years plus penalties and interest and no ag break going forward.The ag break would be thousands of $$$ a year on 500 acres.I turn down free hay land all the time and really not interested unless the landowner fertilizers it,so far I haven't charged to cut and bale if I keep the hay unless its a very small field thats alot of trouble.Hay here is dirt cheap as you can imagine.
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