Land trust refers to different legal entities used to manage land for conservation, development, or investment purposes.
Land trusts more commonly exist as conservation land trusts, created to preserve land from development. Individuals can create conservation land trusts in order to set aside family property to prevent development on the property while continuing to benefit from using the property. Often, only an easement on the property will be in the trust, limiting how the property can be used, but this allows the owner to continue to own the property for uses like farming or recreational activities. Also, if structured properly, the land or easements transferred to the trusts can generate tax-deductions.
Conservation land trusts may also be created by groups of people as a non-profit organization instead of an actual trust. These organizations serve a variety of purposes from repopulating animal life in certain areas to protecting wetlands. Donations to these organizations are tax-deductible and increasingly are used for conservation and environmental projects.
Land trusts can be used for development and investment purposes as well. In its original form, land trusts were used by individuals as a way to keep their ownership of certain property private as a loophole around certain laws in Chicago. Individuals continue to create land trusts that are revocable as a way to manage investments while benefiting from their secrecy and trust management. Some land trusts also may be established to fill the needs of a community such as building affordable housing or a park.
[Last updated in March of 2022 by the Wex Definitions Team]
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