Do you own a beautiful piece of land? Are you a lover of nature? Do you worry about the future, when you’re gone one day, and developers will come in and turn your property into a residential development or shopping mall? Luckily, you have an option to make sure your piece of property stays intact forever: by protecting it with a conservation easement. Keep reading to find out how you can place your property into a conservation easement so that your future generations can enjoy it for many years to come.
What is a Conservation Easement?
A conservation easement is a legal agreement made voluntarily between a landowner and a land trust or government agency to protect a piece of land conservation. When the easement is made, it permanently limits the use of the land in question. A conservation easement is also referred to as a conservation restriction or conservation agreement. If you are a landowner and want to protect your land for future generations, consider including a conservation easement as a part of your Estate Plan.
Now that we have the conservation easement definition down, let’s explore more about what it means when a property has a conservation easement.
What Does It Mean When a Property Has a Conservation Easement?
When a property has a conservation easement, it means that the property owner made an agreement with a land trust or government agency to permanently limit possible uses of the land. This is a voluntary, legal action that can be made to protect the land’s conservation values.
When a property has a conservation easement, the current owner is still allowed to own and use their land. They also retain the right to sell it, or pass it down to their heirs. The conservation easement is permanent, so none of these actions will terminate it. The restrictions of the easement stay in place, even when the land is inherited or sold.
How Do Conservation Easements Work?
First, the landowner must identify a land trust or government agency that handles conservation easements. This could be a local land trust that is run by a board of Trustees. Many state and government agencies also facilitate easements. Some examples include:
State departments of fish and wildlife
State department of forestry and fire protection
National park service
Reserve programs
Native American tribes
The landowner and the agency or recipient organization will then negotiate the terms of the conservation easement. This determines limitations on the type or amount of development permitted on the property, designated use of the property, and whether or not it will allow public access.
The landowner then sells the easement to the receiving organization or agency at the appraised value. They can also choose to donate it partially or in full.
Once the easement is set in stone, it becomes a part of the property deed. The landowner continues to bear all costs related to owning and maintaining the property. The agency or organization that owns the easement monitors the property routinely to make sure that it is in compliance with the term of the easement. However, they don’t have any direct control over the activities on the land.
What Are the Benefits of Conservation Easements?
If you own undeveloped or minimally undeveloped land, then a conservation easement is an option you may want to consider. It offers landowners the avenue of making sure that their land is conserved permanently so that future generations can enjoy it for years to come.
Here are some of the reasons why landowners choose to use conservation easements:
Gain control over your land’s future
Conserve land permanently, on your own terms
Gain some income by selling the easement to an organization
Receive a federal income tax deduction should choose to gift the easement instead
Retain the right to own and manage your own property
Retain the right to sell or pass down the property through inheritance
Help protect the environment
Have the flexibility to place the easement on only a portion of your property
Provide economic benefits to your local surrounding area
Conservation easements do not automatically make your property open to the public
What Are Other Options Beyond Conservation Easement?
Know that a conservation easement is not the only option to protect your land. Although conservation easements offer a myriad of benefits, sometimes it’s not the right option. Here, we explore some alternative options, including fee ownership, resale of the land, and donation of the land.
Fee Ownership: Land can sometimes be conserved when a land trust, agency, or other organization owns the land outright. This is what we call a fee ownership. The landowner might choose to donate the property to the organization, or in some cases, sell the title, rights and interest to the organization instead. The organization then fully owns the land for conservation purposes. A fee ownership makes the most sense when the property is home to sensitive natural habitats, or has a significant conservation objective.
Resale of Land: Let’s say you own a beautiful piece of undeveloped property but need to sell it. It pains you to think about some developer coming in and destroying it. A resale may be a great option. A local land trust could help you put a conservation easement on the land before it goes on the market. They can also often help you find potential buyers for this special category of land.
Donation of land: You could also consider donating the land. Here, there are several methods of donating your land. First, you could donate your land outright for the purpose of conservation. You can donate your land to a land trust or government agency and have peace of mind knowing that you created an outstanding legacy. You can still donate land to a land trust even if it doesn’t have significant conservation characteristics. This is called a trade land. The land trust can choose to sell the land for residential or commercial development; the proceeds would go to the trust. You would directly support conservation efforts even if your particular property doesn’t fit neatly into the conservation box.
How a Conservation Easement Can Benefit Your Estate Plan
There are two key benefits associated with enveloping a conservation easement into your estate plan: psychological and financial.
Let’s talk about the psychological benefits first. One of the key objectives of an estate plan is planning out what you want your legacy to look like, and how to protect that legacy so that it stays intact, long after you’re gone. If you have a beautiful piece of land and have a passion for nature conservancy, a conservation easement could be just what you were looking for. By obtaining a conservation easement as a part of your deed, you can have peace of mind that your land will never be developed. You can use your land freely during your lifetime, and you can pass your land down through your bloodline. Your loved ones can definitely enjoy the private use of the land while keeping it intact.
Conservation easements also serve a more practical matter. It can be used as an estate administration tool to reduce the value of your estate. By gifting or selling a conservation easement to a land trust or other organization, the value of your land is no longer included in your estate. For instance, let’s say you own a large plot of land valued at $3 million, and your total estate is valued at $6 million. By obtaining a conservation easement, you can cut the size of your estate in half! This is a serious benefit. You are significantly reducing the size of your estate, and thus your tax liabilities, while preserving your land for good use.
Who Should Consider Conservation Easements in Estate Planning
Conservation easements are something to consider if you own property outright. An easement could be a great option if you simply have a passion for conservation and don’t want to see your land get developed for commercial, residential, or industrial uses.
It’s also practical to consider a conservation easement if you have a lot of value tied up in your land. The easement serves as an estate planning tool to greatly reduce the size of your estate and lower your potential tax liabilities. It can also make it such that your heirs aren’t forced to sell the property so that they can come up with the money needed to pay for estate taxes. By placing a conservation easement on the property, your heirs can continue to own and operate the property to their benefit.
Should Conservation Easement Be a Part of Your Estate Plan?
Whether your goal is to conserve land for the love of nature, or to reduce the size of your estate for financial purposes, a conservation easement presents itself as a win-win situation. You still maintain full control over your own land during your lifetime, and you still get to pass it down to your loved ones from one generation to the next. You can have peace of mind knowing that your beautiful property has been turned into a lasting legacy and it will permanently stay intact.
If you end up selling or donating a conservation easement to a land trust or government agency, be sure to update your Estate Plan. You’ll need to reflect the change on your property deed, and update the instructions for the way in which your property shall be inherited. Trust & Will makes it easy to prepare and update your estate planning documents so that you can rest assured that your vision for your legacy will be fully executed.
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