Wills, Trusts & Estates Prof Blog

Editor: Gerry W. Beyer
Texas Tech Univ. School of Law

Saturday, July 25, 2009

Preserving the Integrity of Land Trusts

Iceberg_scenery Erin B. Gisler (J.D. candidate, Santa Clara University School of Law, 2009) has recently published her comment entitled Land Trusts in the Twenty-First Century: How Tax Abuse and Corporate Governance Threaten the Integrity of Charitable Land Preservation, 49 Santa Clara L. Rev. 1123 (2009).

The introduction to the article is below:

Paralleling dramatic population growth and sprawl, land trust growth gained momentum in the 1980s with the passage of the Uniform Conservation Easement Act, as well as a new tax provision that allowed for an income tax deduction for a charitable contribution of land. The conservation movement also encouraged the passage of additional tax incentives in the twenty-first century. However, as with any kind of financially motivating laws, abuse is inevitable. Particularly with the fair market valuations that must occur when a donor contributes land, appraisals hinder the conservation process by enabling self-interested landowners to attain an inaccurately high land value estimate so as to deduct more income taxes. Today, land trusts' goodwill suffer from transacting with landowners who attain dishonest appraisals. The reputations of land trusts have also been tarnished by the unethical practices of The Nature Conservancy, one specific land trust that has drawn the negative attention of journalists and Congress.
This comment explores the pivotal role of land trusts in the conservation boom and in upholding the integrity of land conservation. Part II provides a background of land trusts and their functions; it also reviews how land conservation and land trusts became popular as a result of statutory changes in federal tax law, and how such popularity has encouraged even more pro-conservation legislation.  Part III presents one of the major threats to the conservation movement: tax abuse.  Part IV analyzes this problem from the viewpoint of individual landowners seeking hefty income tax deductions and discusses how land trusts, and The Nature Conservancy in particular, can lose sight of their missions to conserve by engaging in unethical, profit-motivated behavior. Part V's proposal suggests a number of methods all parties involved in land conservation can implement to adhere to ethical and responsible standards.


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