Chapter § 9.6 Land Trusts

• Jurisdiction: Washington

§9.6 LAND TRUSTS

A land trust is a private charitable organization that acquires and holds interests in land for the purpose of conserving the land in perpetuity. In addition, some land trusts serve the additional function of acquiring property for eventual transfer to a governmental agency, as might be useful in a PDR or TDR program. The land trust offers a method of dealing with evolving resource protection issues by establishing a steward for the land and for the benefit of its community.

By using well-established law, land trusts avoid many of the difficulties associated with open space preservation. Unlike zoning, land trusts suffer few administrative and constitutional challenges and are not subject to political pressure to allow variances. Unlike governments, land trusts can act quickly to protect threatened resources or to take advantage of opportunities.

(1) Organizing the land trust

Land trusts, almost by definition, are organized as charitable organizations because of the substantial tax advantages. Although a land trust can legally organize as a non-charitable organization, this is not a common choice. Classification as a charitable organization aids the land trust to avoid the rule against perpetuities or to seek judicial modification of the terms of a disposition under the doctrine of cy pres. See 17 William B. Stoebuck & John W. Weaver, Washington Practice, Real Estate: Property Law §1.25 (2d ed. 2004 & Supp. 2011). To qualify as a charitable trust in Washington, the land trust must meet the requirements of a common-law charity and Chapter 11.110 RCW, concerning charitable trusts.

The land trust organization may take any form, whether corporation, association, limited venture, or legal trust. Of course, charitable trusts are particularly appropriate if the land trust's creator desires the numerous protections available from the trust form of organization. See, e.g., 90 C.J.S. Trusts §246 (2010). In creating a trust, the settlor/ creator dictates the terms of the trust, allowing substantial control over the trustee's powers. A trust can be made revocable or irrevocable, amendable or not, depending on how much control the grantor wishes to exercise. In addition, trustees are held to strict standards concerning fund administration, self-dealing, and liability. Esmieu v. Schrag, 88 Wn.2d 490, 563 P.2d 203 (1977). These high standards provide the best guarantee that land dedicated to resource protection will ultimately remain in...