A conservation easement is a voluntary legal agreement by which a landowner chooses to limit certain uses of his or her land to conserve natural and traditional values. Land placed into a conservation easement still belongs to the landowner, and the landowner retains the rights to sell the land or pass it to heirs. The landowner keeps the rights to live on and manage the land for farming, ranching, timber, recreation, and all other uses consistent with the conservation values the easement seeks to protect. These agreements are tailored to meet the needs and long-term goals of each landowner. The role of Five Valleys Land Trust is to ensure that the mutually agreed-upon terms and conditions of the conservation easement are honored.
Land trusts are not government agencies. A land trust is a private, non-profit corporation that works with landowners to help them conserve and maintain their family lands with voluntary conservation easements. Five Valleys Land Trust is a local organization that is guided by an all-volunteer board of western Montana residents. Why do landowners enter into a conservation easement? Landowners typically enter into voluntary conservation easements because their land holds special value for them. Landowners know the value of clean water, rich soil, working farms and ranches, and wildlife habitat. Conservation easements are often used as planning tools to ensure that land will stay intact even as it changes hands between generations and subsequent landowners. In addition, there can be federal estate and income tax benefits associated with granting a conservation easement.
Five Valleys Land Trust’s conservation program focuses on maintaining significant fish and wildlife habitat, water quality, family farms and ranches, scenic views, and important recreational lands. There is no minimum or maximum acreage. Whether a particular property will qualify for a conservation easement will be based on a careful analysis of the property, its surroundings, and the character of the land as a whole.
Most conservation easements prohibit large-scale subdivision or development, mining and non-agricultural commercial, and industrial uses that will negatively impact a property’s conservation values. However, a conservation easement does not prohibit all future development. They are intended to be flexible enough to allow for limited residential development. The details of the agreement are negotiated between the landowner and Five Valleys Land Trust and will depend on the character of the land and the conservation values the easement is designed to protect.
Yes, a typical conservation easement encourages continued use for agricultural production, grazing, timber harvesting, and other uses consistent with the conservation intent of the easement. Landowners generally do not have to alter existing management activities.
Yes, a landowner granting a conservation easement retains full ownership. A conservation easement granted to Five Valleys Land Trust does not give government agencies any new rights or control over your land. After all, it’s still your land.
The term easement can be misleading. Conservation easements do not require public access. While a landowner may choose to allow public access, there is no obligation to do so. As is the Montana tradition, the landowner decides who is allowed on the land and when.
All conservation easements with Five Valleys Land Trust are permanent and remain with the land regardless of future ownership.
The donation of a qualified conservation easement can be considered a charitable gift under federal tax law, potentially providing significant estate and income tax benefits. In summer 2006, Congress approved a significant expansion of these benefits. Under the new rule, the federal income tax deduction for donating a conservation easement increases from 30% to 50% of adjusted gross income. Qualifying farmers and ranchers will be allowed to take a 100% deduction. Additionally, the deduction can be taken over a period of 16 years, rather than six. The expanded incentives only apply to easements donated through 2011. For updates on expanded updates after 2011 click here for the most recent news.
A donated conservation easement may also lower estate tax liability, enabling the safe passage of family lands from one generation to the next. Five Valleys Land Trust strongly encourages landowners to consult their attorney or tax advisor to fully explore the estate and income tax benefits flowing from the charitable donation of a conservation easement.
When a conservation easement is granted, the restrictions on future development often reduce the appraised value of the property. The value of a conservation easement is the difference between the property’s appraised value before the donation and the property’s value after the donation. For example: If the property’s appraised value before the conservation easement is $300,000, and after the easement the appraised value is $200,000, then the value of the easement is $100,000. The potential estate and income tax benefits are based on this value.
Yes. We ask landowners to share in the costs associated with granting a conservation easement to the extent they are able. In cases where these costs create a barrier to conserving important lands, we work with landowners to find funding.
Want more information?
For more information on how conservation agreements can help you protect your land, call Five Valleys Land Trust at 549-0755.
**IRS Circular 230 Disclosure**This communication is not intended to be used, and cannot be used, for the purpose of avoiding penalties that may be imposed on a taxpayer. A taxpayer should seek advice based on that taxpayer’s particular circumstances from a qualified tax professional.
What to Expect in a Conservation Easement
Every conservation easement is unique and is drafted to meet the specific needs of the Landowner and to protect the specific conservation values of the property. Nonetheless, the format and many of the terms found in a conservation easement are the same from one document to the next. Generally, a conservation easement will include:
- Identification of the Parties – The document identifies the Landowner who conveys the conservation easement and the Land Trust that holds and monitors the conservation easement in perpetuity.
- Identification of the Property to be Conserved– A legal description of the property is included in the conservation easement, as well as a map that visually depicts the property.
- Purposes Clause – This clause sets forth why the conservation easement is granted, what conservation values the Landowner and Land Trust want to protect, and why the Landowner and Land Trust want to protect those values.
- Permitted Uses – Refers to all of the rights the Landowner retains after conveying a conservation easement to the Land Trust.
- Restricted Uses – Refers to the property uses that are restricted or prohibited in order to protect the conservation values of the property.
- Notice and Violation Provisions – Sets out the framework for how the Landowner and Land Trust will communicate in the event of a conflict.
- General Boilerplate Provisions – General provisions which are consistent from document to document and relate to the interpretation of the conservation easement and other legal matters.
- Notarized Signatures – Both the Landowner and the Land Trust must sign the conservation easement, the signatures must be notarized by a Notary Public, and the conservation easement must be recorded with the County Clerk and Recorder in the county where the property is located.