How to Sell Pennsylvania Land in a Trust?

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How to Sell Pennsylvania Land in a Trust?

Bart Waldon

Pennsylvania's landscape is as diverse as its history. From the lush forests of the Poconos to the fertile farmlands of Lancaster County, the Keystone State offers a wealth of land ownership opportunities. But with great land comes great responsibility – and sometimes, a need for smart estate planning.

Let's talk numbers for a second. Did you know that in 2022, the average value of farm real estate in Pennsylvania hit $6,300 per acre? That's a hefty 7.7% jump from the previous year, according to the USDA's Land Values Summary. And it's not just farmland – raw land sales across the state have been all over the map, ranging from $1,000 to a whopping $20,000 per acre in 2023, depending on where you're looking and what you're getting.

With land values on the rise, more and more Pennsylvania landowners are scratching their heads, wondering how to protect and manage their property effectively. One option that's been gaining traction? Putting land in a trust. It might sound like something only the Rockefellers do, but trust me (pun intended), it's not just for the ultra-wealthy anymore.

What's the Deal with Land Trusts in Pennsylvania?

Before we dive into the nitty-gritty, let's get our bearings on what a land trust actually is in the context of Pennsylvania law.

Land Trust 101

Think of a land trust as a legal safety deposit box for your property. It holds the title to your land, keeping it separate from your personal assets. You've got a trustee who manages the property according to your instructions, while you (or whoever you choose) get to enjoy the benefits of the land.

Pennsylvania's Trust Flavor

In Pennsylvania, you've got a few trust options to choose from:

  1. Revocable Living Trusts: The flexibility champs. You can change or cancel these as long as you're alive and kicking.
  2. Irrevocable Trusts: The "no takebacks" option. Once it's set, it's set in stone.
  3. Conservation Trusts: For the nature lovers and history buffs who want to preserve land for future generations.
  4. Family Limited Partnerships: Not technically a trust, but they can work similarly for managing family land.

Why Bother Putting Your PA Land in a Trust?

You might be thinking, "This sounds like a lot of work. What's in it for me?" Well, quite a bit, actually:

Shield Your Assets

By moving your land into a trust, you're basically giving it a suit of armor against personal creditors and lawsuit-happy folks. It's like a force field for your property.

Smooth Sailing for Your Estate

Nobody likes to think about it, but trusts can make life (or rather, death) a lot easier for your heirs. It can help you sidestep the time-suck and money pit that is probate court.

Keep It on the Down-Low

For those who value privacy (and let's face it, who doesn't these days?), a land trust can keep your ownership details out of the public eye.

Your Land, Your Rules

Want to make sure your pristine forest doesn't turn into a strip mall after you're gone? A trust lets you call the shots on how your land is managed, even from the great beyond.

Potential Tax Perks

Depending on how you set things up, you might be able to trim your estate tax bill or cash in on some conservation-related tax incentives.

Rolling Up Your Sleeves: How to Put Your PA Land in a Trust

Alright, let's get down to brass tacks. Here's how you can actually go about putting your Pennsylvania land in a trust:

  1. Soul-Searching Time: First things first, figure out what you're trying to achieve. Asset protection? Estate planning? Keeping the family farm in the family? Your goals will shape everything that follows.
  2. Choose Your Trust Wisely: Based on your goals, pick the type of trust that fits best. This is where a good attorney or financial advisor earns their keep.
  3. Trustee Hunting: You'll need someone to manage the trust. It could be a family member, a friend, or a professional outfit like a bank. Choose carefully – this person or entity will be calling the shots.
  4. Paperwork Party: Time to draft the trust agreement. This is the rulebook for your trust, so make sure it covers all the bases: 
  • What's the trust for?
  • What can the trustee do (and not do)?
  • Who gets to benefit from the trust?
  • How should the land be managed?
  • When and how can the trust be changed or ended?
  1. The Big Handoff: Once your trust is set up, you'll need to transfer your land into it. This means: 
  2. Creating a new deed
  3. Filing it with your county recorder
  4. Letting the tax folks know about the change
  5. Dot Your I's and Cross Your T's: Depending on your situation, you might need some extra paperwork, like a certificate of trust or a memo for public records.
  6. Ongoing TLC: Setting up the trust is just the beginning. You'll need to keep records, file tax returns, and maybe hold the occasional meeting to keep everything running smoothly.

Pennsylvania Quirks to Keep in Mind

Every state has its oddities, and Pennsylvania is no exception. Here are a few things to watch out for:

  • Clean and Green Program: If you're getting tax breaks for keeping your land agricultural or forested, make sure putting it in a trust doesn't mess that up.
  • Mineral Rights: Pennsylvania's got a long history with mining. If your land comes with valuable mineral rights, you'll want to address those specifically in your trust.
  • Conservation Easements: If you're into long-term land preservation, combining a trust with a conservation easement can be a powerful combo.
  • Local Zoning Laws: Pennsylvania's a big state with lots of local quirks. Make sure your trust's plans jive with local regulations.

When the Road Gets Bumpy

Setting up a land trust isn't always smooth sailing. Here are a few potential hiccups to watch out for:

  • It can get complicated and potentially pricey. Make sure the benefits outweigh the costs for your situation.
  • If you go the irrevocable route, you're pretty much locked in. Think long and hard before committing.
  • Family drama can rear its ugly head when multiple beneficiaries are involved. Clear communication is key.
  • Taxes can get tricky. A good tax pro is worth their weight in gold here.

Other Fish in the Sea

While land trusts are great for many folks, they're not the only game in town. Consider these alternatives:

  • Setting up an LLC for your land
  • Keeping the land in your name and beefing up your insurance
  • Working directly with a conservation organization
  • Selling to a land investment company like Land Boss (they've been in the game for 5 years and have over 100 deals under their belt)

Final Thoughts

Putting your Pennsylvania land in a trust can be a smart move for protecting your assets, planning your estate, and making sure your land is managed the way you want. But it's not a decision to make lightly.

Remember, the Pennsylvania land market can be as unpredictable as the weather. Whether you're looking to trust, sell, or hold onto your land, doing your homework and getting expert advice is crucial.

If selling seems like the best option, keep in mind that offloading vacant land can take a while – often 1-2 years. Companies like Land Boss that buy land for cash can speed things up, but make sure you're comfortable with their offer.

At the end of the day, the right choice depends on your unique situation, goals, and the specific quirks of your Pennsylvania property. By understanding your options and getting some solid advice, you can make a decision that'll keep your piece of the Keystone State secure for years to come.

Frequently Asked Questions (FAQs)

How much does it typically cost to set up a land trust in Pennsylvania? 

The cost of setting up a land trust in Pennsylvania can vary widely depending on the complexity of your situation and the professionals you work with. Generally, you can expect to pay anywhere from $1,500 to $5,000 or more for attorney fees to draft the trust documents and transfer the property. There may also be additional costs for recording fees and ongoing trust administration. It's best to get quotes from several attorneys to compare prices and services. 

Can I still use and enjoy my land if I put it in a trust? 

Absolutely! In most cases, putting your land in a trust doesn't change how you can use or enjoy the property. The trust becomes the legal owner, but as the beneficiary, you typically retain the right to use the land as you see fit. The specifics can be outlined in the trust agreement to ensure you maintain the level of control and access you desire. 

Will placing my Pennsylvania land in a trust affect my property taxes? 

Generally, transferring your land to a revocable living trust shouldn't affect your property taxes. The trust is considered a pass-through entity for tax purposes, so you'll continue to pay taxes as you did before. However, if you're using programs like Clean and Green for tax benefits, it's crucial to ensure the transfer doesn't disqualify you. Always consult with a local tax professional to understand any potential impacts. 

Can I put my Pennsylvania farmland in a trust if I have a mortgage on it? 

Yes, you can usually put mortgaged property into a trust, but you'll need to take some extra steps. First, check your mortgage agreement for any due-on-sale clauses. Then, you'll likely need to get permission from your lender before transferring the property. Some lenders may require you to refinance. It's best to work with an attorney who can help navigate this process and ensure you're not violating any terms of your mortgage. 

How does putting land in a trust compare to selling it to a company like Land Boss? 

Putting land in a trust and selling it are two very different strategies. A trust allows you to maintain ownership and control of the land while potentially gaining benefits like asset protection and easier estate planning. Selling to a company like Land Boss, on the other hand, means you're giving up ownership in exchange for a lump sum of cash. Land Boss, with their 5 years of experience and over 100 transactions, can often provide a quick and straightforward sale process. The best choice depends on your goals - if you want to keep the land in the family or maintain control, a trust might be better. If you're looking to liquidate your asset quickly, selling could be the way to go.

About The Author

Bart Waldon

Bart, co-founder of Land Boss with wife Dallas Waldon, boasts over half a decade in real estate. With 100+ successful land transactions nationwide, his expertise and hands-on approach solidify Land Boss as a leading player in land investment.


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