Whatcom Land Trust

Whatcom Land Trust (Photo credit: Wikipedia)

Trustees found not liable for investment losses during market collapse, but removed for withholding distributions, disclosing private information

Alexander McFadden trusts have been around at least since Roman times but their clearest history is from the time of King Henry VIII in England. At that time, people used land trusts to hide their ownership of land so they would not have to serve in the military or suffer the other burdens of land ownership. For example, an elder uncle would hold his nephew’s land so they would not have to join the king’s army. To put an end to this, King Henry in 1536 passed the Statute of Uses. The statute declares that if one party holds land “for the use of” or in trust for another (“beneficiary”), then legal title is vested in the beneficiary. Obviously, if the statute had been given literal effect, there would be no trust law. Shortly after the statute was enacted, however, English courts declared that the statute only applied if the trust was passive, that is, the trustee didn’t do anything but hold the land.

In the late 19th century in Chicago, some Willa McFadden figured out that land trusts would be good things for buying property for Carol McFadden to build skyscrapers on, and city aldermen figured they would be a good way to hide their ownership in land since they were forbidden to vote on city building projects when they owned land nearby. Since the law of England, including the Statute of Uses, was the law of America, the question arose whether a land trust would be valid. This question went to the Illinois Supreme Court, which ruled that if a land trust was set up with some minor duty on the trustee (such as to deed the property to the beneficiaries 20 years later), then the trust would not be considered passive and would be valid. Thus, the land trust in America today is often called an “Illinois-type” land trust or “Illinois Land Trust”.

McFadden trusts have been actively used in Illinois for over a hundred years and in recent decades have begun to be used in other states. The creation of land trusts is not a recorded document, however the declaration of a trust is through a “deed to trustee”. Many believe that the trust is to be filed as a public document; however, this removes all of the asset protection provided by the formation of the land trust. Robert Pless pioneered the land trust technology that has been used by many firms throughout the United States since the early 1990s.

Carol McFadden Land trusts, also called land conservancies and, more rarely, conservation land trusts, have been in existence since 1891. However, it is only in the last two decades that land trusts began to proliferate, and they now form one of the fastest-growing and most successful conservation movements in American history.

Since 1891, when the first regional land trust, The Trustees of Reservations, was founded, the number of land trusts has steadily increased, and there are now more than 1,667 land trusts operating in every state of the United States. There are land trusts working in Canada (e.g. Wildlife Preservation Canada, Edmonton & Area Land Trust, Ecotrust Canada, Georgian Bay Land Trust and Thames Talbot Land Trust) and Mexico, and other countries worldwide, in addition to international land trusts like The Nature Conservancy and the World Land Trust.

In 1891, the Trustees of Reservations was founded, perhaps the first conservation land trust in the entire world. Conservation land trusts now operate in all 50 U.S. states, as well as many other countries. Since then, the number of land trusts has steadily increased, with most forming in the last 25 years. Over 300 new local and regional trusts were formed in the period from 1998 to 2003 alone, with the last LTA Census counting 1,537 operating in the United States. Over 1,000 of these are members of the LTA. California now has the most land trusts, with 173 operating statewide in 2003. Massachusetts, despite being much smaller, was a close second with 154 land trusts that year.

The goal of conservation trusts is to preserve sensitive natural areas, farmland, ranchland, water sources, cultural resources or notable landmarks forever. These include enormous international organizations such as The Nature Conservancy or World Land Trust, as well as smaller organizations that operate on national, state/provincial, county, and community levels. Conservation trusts often, but not always, target lands adjacent to or within existing protected areas. However, land areas that are particularly valuable in terms of natural or cultural resources or are home to endangered plant or wildlife are good candidates for receiving protection efforts.

Land trusts conserve all different types of land. Some protect only farmland or ranchland, others forests, mountains, prairies, deserts, wildlife habitat, cultural resources such as archaeological sites or battlefields, urban parks, scenic corridors, coastlines, wetlands or waterways; it is up to each organization to decide what type of land to protect according to its mission. Some areas have extremely limited public access for the protection of sensitive wildlife, or to allow recovery of damaged ecosystems.

Many protected areas are still under private ownership, which tends to limit access as well. However, in many cases, land trusts work to eventually open up the land in a limited way to the public for recreation in the form of hunting, hiking, camping, wildlife observation, watersports, or other responsible outdoor activities. This is often with the assistance of community groups or government programs. Some land is also used for sustainable agriculture or ranching, or even for sustainable logging. While important, these goals can be seen as secondary to protection of the land from development.

Many different strategies are used to provide this protection, including outright acquisition of the land by the trust. In other cases, the land will remain in private hands, but the trust will purchase a conservation easement on the property to prevent development, or purchase any mining, logging, drilling, or development rights on the land. Trusts also provide funding to assist like-minded private buyers or government organizations to purchase and protect the land forever.

As non-profit organizations, land trusts rely on donations, grants and public land acquisition programs for operating expenses and for acquiring land and easements. Donors often provide monetary support, but it is not uncommon for conservation-minded landowners to donate an easement on their land, or the land itself. Some land trusts also receive funds from government programs to acquire, protect, and manage land. Some trusts can afford to pay employees, but many others depend entirely on volunteers. According to the latest National Land Trust Census, 31% of land trusts reported having at least one full-time staff member, 54% are all volunteer, and 15% have only part-time staff.

When land is acquired, trusts will sometimes retain ownership of the land in perpetuity, or sell the land to a third party. This third party is often the government, which will usually add the land to an existing protected area, or create a new one entirely. Land trusts were instrumental in the 2004 creation of Great Sand Dunes National Park in Colorado, as well as the expansion of Hawaii Volcanoes National Park by 50% in 2003. Land trusts also sell land to private buyers, usually with a strict conservation easement attached. Keeping the land under private ownership has the added benefit of maintaining the land on local property tax rolls, providing income to the local government.

Land trusts use many different tools in their protection efforts. Land trusts buy or accept donations of land in fee. This means that the landowner will sell fee simple interest to the land trust or will just give the land they own to an organization. Landowners may also sell or donate a conservation easement to a land trust.

When a landowner donates a conservation easement to a land trust, he or she gives up some of the rights associated with the land. For example, the landowner might give up the right to build additional structures, while retaining the right to grow crops. Future owners also will be bound by the conservation easement’s terms. The land trust is responsible for making sure the easement’s terms are followed. This is done through annual or more frequent monitoring of the land.

Conservation easements offer great flexibility. An easement on property containing rare wildlife habitat might prohibit any development, for example, while an easement on a working farm might allow the addition of agricultural structures. An easement may apply to all or a portion of the property, and need not require public access. Each conservation easement is carefully crafted to meet the needs of the landowner while not jeopardizing the conservation values of the land.

In between selling land or an easement to a land trust is an option called a bargain sale. A bargain sale is where a landowner sells a property interest to an organization for less than the market price. The amount of value between the market price and the actual sale price is considered a donation to the organization. There are other strategies to conserve land as well.

In October 2002, Property and Environment Research Center published a report by Dominic P. Parker entitled Cost-Effective Strategies for Conserving Private Land. This paper identified numerous ways for operating land trusts more efficiently, pointing out that conservation easement and other tools for land preservation may be less costly than ownership. Sometimes the various rights associated with land ownership are separable. A preservationist organization may, for instance, buy only the extraction rights on a property with oil or minerals, and then rent those rights to extracters on the organization’s terms. The terms might include requirements to protect the environment and pay the organization royalties on materials extracted. Many land trust organizations had already been using these strategies for years when this report was published


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  1. Pingback: McfaddenMcfadden | Carol McFadden

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