Donation of a Remainder Interest

A landowner may donate his full interest in a personal residence or farm and retain the right (reserved life estate) to use or live on the property for the remainder of his lifetime or that of some other family member. A conservation remainder deed specifies the uses that may or may not be made of the property during the lifetime of the landowner or his family designee.

A remainder donation permits a landowner to claim an immediate charitable gift equal to the current fair market value of the property minus a dollar amount computed on the basis of an assumed rate of return on money, the landowner's (or his designee's) life expectancy (i.e. the remaining years he is expected to have use of the property), and the remaining useful life of any buildings on the property. IRS tables are used to determine money rates of return and actuarial life expectancies.

Tax advantages associated with remainder donations are less than with an outright gift of land in fee simple but greater than a gift of land by will.

TOPICS IN THIS SECTION
Outright Donation of Land
Donation of a Remainder Interest
Donation of Land by Will
Bargain Sale of Land
Conservation Buyers
IN THEIR OWN WORDS
What motivates landowners to protect their land? Hear what landowners say about why they donated or sold a permanent conservation easement on their land.

"My stepfather, Paul Bailey, taught me that people do not own the land but are stewards of the land. When I as growing up he took me fishing and hunting near a farm we had in Calvert County. A lawyer for 62 years, he is remembered today as a "Conservator and a True Friend of St. Mary's County" - a quote that is on his grave marker. MET's easement program was recommended to our family -- and my wife and I talked it over with our sons and they agreed that they wanted the farm to be protected. Trent Hall was built in 1789, a 300-acre property that was a part of 2,200 acres granted to Thomas Truman in 1658. He's our resident ghost, but a friendly one. We purchased Trent Hall in 1955. I consider myself a strong advocate for preservation, however, not at the expense of farmers. Economically-viable farming is a key to preserving farmland. When we did the easement in 1978, we had reserved three rights for additional houses and we wanted to reduce that number to one. An additional benefit was that we were able to claim tax benefits for the donation of those two development rights."

Henry Virts, former MET Board Member, St. Mary's County, Maryland. MET Easement recorded in 1978.

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