The following questions and answers have been compiled to tell you more about land protection techniques and the activities of the Ausbon Sargent Land Preservation Trust.
What is a conservation easement?
A conservation easement is a legal agreement between a landowner and a land trust or conservation group, which places permanent restrictions on the land use. Conservation easements are a practical way for landowners to protect their property and still retain ownership.
What activities might an easement prohibit?
Generally, conservation easements will either limit or prohibit the subdivision of a property or the erection of structures thereon. Most conservation easements prohibit commercial and industrial activity, topsoil removal, billboards and any activities that might disturb wildlife habitat. However, the terms of the easement are dependent upon the individual landowner’s desires.
What uses are permitted?
Agricultural, forestry and wildlife management activities are allowed. For example, to preserve a scenic view across a field, an easement might stipulate periodic mowing.
Does a conservation easement give the public access?
Not necessarily - the landowner decides whether or not to allow public access. If a landowner permits public access, it is usually for a specific area of the property, such as a marked trail or an access point to a body of water.
Must the easement cover a person’s entire property?
No. A landowner can place all or a portion of the property under easement.
Does a conservation easement restrict the landowner’s ability to sell or bequeath the property in the future?
Landowners can sell or bequeath property that is protected with a conservation easement. Since conservation easements are permanent, the restrictions run with the land and bind all future owners.
Are there financial benefits to donating a conservation easement?
(This is a brief review and to fully understand the tax implications you should consult with a financial advisor and/or attorney.)
Conservation easements qualify as charitable deductions if certain IRS criteria are satisfied. The gift value, determined by an appraiser, is the difference between the fair market value of the property before and after the easement is donated. The IRS enhanced tax benefits were made permanant by Congress in December 2015. The deduction a landowner can take for the value of the conservation easement is 50% of Adjusted Gross Income in a year and the carry forward period for the donor is for the next 15 years or until the value of the conservation easement is reached.
Conservation easements usually lower the value of a landowner’s estate, therefore reducing estate and inheritance taxes. Families have found that a conservation easement enables them to keep lands that otherwise might be sold to pay estate taxes.
Gift and Property Taxes
Conservation easements may also provide landowners with gift and property tax benefits. If tax reduction is an important factor, Ausbon Sargent recommends a landowner consult with a tax advisor before proceeding with an easement.
How are conservation easements enforced?
The conservation easement holder (grantee) is legally obligated to uphold the terms of an easement, forever. The grantee is responsible for guarding against violations. With a regular, well-documented monitoring program, easement violations are generally prevented. The periodic monitoring visits serve as a reminder that the landowner is legally bound to keep the property maintained according to the easement terms.
What are the steps in donating a conservation easement?
- A landowner and Ausbon Sargent representative meet to discuss whether a conservation easement is the appropriate land protection technique.
- The land protection proposal is reviewed by the Ausbon Sargent Board of Trustees, to make sure it satisfies the Land Protection Policy.
- If both the landowner and Ausbon Sargent concur that an easement is desirable, restrictions are then discussed.
- Ausbon Sargent suggests the landowner consult legal and tax advisors.
- Ausbon Sargent compiles a baseline property inventory, which includes maps, photographs, and deed history.
- Legal work begins, including drafting the document, title search, obtaining mortgage subordination and enlisting a backup grantee. Generally, Ausbon Sargent prepares the easement.
- The landowner and Ausbon Sargent review the draft easement. Revisions are made if necessary. Both the landowner and Ausbon Sargent should consult their respective legal counsel about the finalized document.
- If the landowner intends to claim the easement as a charitable deduction, a qualified appraisal must be obtained. Ausbon Sargent must be provided a copy of the appraisal.
- In some cases, a survey is required if the boundaries are unclear or in dispute.
- Once the final document is reviewed, a formal vote of acceptance is obtained from the Ausbon Sargent Board of Trustees.
- The easement is signed and recorded.
- Ausbon Sargent monitors the property annually.