Conservation easements can be a great estate-planning strategy for landowners. But in many cases, such tools are overlooked because their benefits are not fully understood. Here, the estate planning specialists at The Law Offices of James A. List, LLC further elaborate on the concept of conservation easements.
What are Conservation Easements?
A conservation easement is a legal agreement between a landowner and a land trust. It can also be an agreement with a government agency, limiting the use of the land in order to protect it. In establishing a conservation easement, landowners retain ownership of the land, and are allowed to sell or give the land to heirs. The landowner also then receives tax benefits from the easement.
How Do Conservation Easements Limit the Use of Land?
In order to preserve the natural beauty and value of land, these easements may prevent activity from occurring on that property. Development is usually very limited, and strip mining and fracking is almost always prohibited. However, farming and ranching is usually permitted.
Landowners are typically permitted to build a house or private residence on the land. However, this is provided the land still upholds important conservation values. Certain aspects must be included such as protecting wildlife, forests, and wetlands. Easements can protect the whole of a property, or just a portion of it: each easement is unique, and limitations will vary based on the situation.
What are the Benefits of Conservation Easements?
Conservation easements are a great way to protect your land and maintain its natural assets. In fact, establishing your land under a conservation easement can also allow the land to be written off as a tax deductible charitable donation, potentially lowering your federal and state income taxes. For landowners concerned with estate planning, conservation easements are a beneficial way of ensuring family land won’t be lost to high estate taxes and land developers.
How Can I Employ Conservation Easements for Estate Planning Purposes?
Conservation easements make inheriting family land easier, as it reduces the estate tax burden of inheritors. An estate worth more than $5.49 million in 2017 is subject to a hefty estate tax. When a landowner puts their land, or part of their land, under a conservation easement, they lower the property value of their land. Doing so potentially avoids the estate tax altogether. Specifcally, this is true when the value is less than $5.49 million. Heirs can also exclude 40% of the value of the easement land from estate taxes, if the value is less than $500,000 and the conservation easements requirements continue to be met.
How The Law Offices of James A. List, LLC Can Help
Choosing to put your land under a conservation easement is a big decision, and consulting an attorney is critical. For additional information, we invite you to contact our law firm.
