Understanding Conservation Easements
When a landowner donates a conservation easement they retain the right to use the land in accordance with the easement and they retain ownership. The land may be sold or passed on to heirs however as owners of the land change, the conservation easement remains as a permanent part of the deed. Any future owners will be bound to the terms of the easement and the land trust or government agency which holds the conservation easement rights is responsible for ensuring that those terms are followed.
These terms may exclude building structures or roads but allow for open space activities like growing crops or flowers. The terms may be set by the landowner and be customized to specific needs. Conservation easements may apply to part or all of a property. They may also be kept privately without the need for public access.
The land used for a conservation easement may be sold by the landowner or donated. A donated parcel can qualify as a tax deduction. Even parcels that are sold may qualify as a tax deduction because the sale excludes the property from “highest and best use” from a real estate perspective. In other words, selling a parcel to a land trust excludes the potential that the property could yield millions in revenue if developed. Removing the land’s development potential lowers the market value of the property. The difference between the land trust sale price and the “highest and best use” potential constitutes the tax deductible value. Not all conservation easements result in property tax savings so it is always necessary to have specialized legal advice to help structure the agreement.
The largest benefit of conservation easements is that they preserve open space for future generations. It ensures that open space remains a part of a town’s legacy. Because it lowers a property’s market value, estate tax is also lowered. As land passes to heirs, the lower estate tax can assist inheritors in maintaining possession of the land. Landowners who place a conservation easement due so because they want to prevent undesirable development while maintaining private ownership and use of the property.
Since 1998, land trusts have successfully protected over five million acres of land throughout the United States. Some land trusts are over 100 years old providing landowners with decades of experience. The established history of older land trusts provides growing confidence for landowners who wish to preserve their land and place its use in trusted hands. Lands protected through conservation easements include coastal areas, farm and ranchland, scenic areas, water bodies, wetlands and historical landscapes.
The best way to learn more about protecting your property from unwanted development is to contact your local land trust. Land trusts are prevalent and established in states, counties or towns. Sitting down with a member of a land trust is the best way to explore the conservation options available to your specific situation. All conservation easements may be tailored to your specific conservation goals as well as the goals of your estate and family. It is important to discuss options with family members who will become part of the land’s conservation plan. Having everyone aware of the structure, terms and legal responsibilities of the conservation easement will ensure that it serves its intended purpose. It is a significant decision that should be done under consult of an attorney or financial advisor.
Most conservation easements will be bound to the land forever. It will become part of the town records as part of the land’s deed. It will affect all future transactions that occur on the land by owners or lenders. As ownership changes through inheritance or sale, the conservation easement remains the responsibility of the land trust. The land trust usually checks in on conservation easements annually to ensure the land is used as determined by the terms of the easement. The land trusts keeps a record throughout the life of the conservation easement. To secure future use, many land trusts have endowments for the easements to ensure long-term stewardship.
If you are interested in a conservation easement for your own property, research the process thoroughly with the help of a land trust and your legal advisor. A conservation easement can be an excellent way to preserve the quality of your property for wildlife and future generations.
