What is a Conservation Easement?

Since 1989 one of the primary ways that Five Valleys Land Trust has worked to maintain Montana’s natural legacy is through the use of the conservation easement. 

A conservation easement is a voluntary legal agreement between a landowner and the Land Trust that limits certain uses (usually subdivision and development) of the land in order to protect specific conservation values. Each conservation easement is unique to the specific needs of the landowner, and of the land.  With an easement in place, the landowner continues to own and manage the land and has the right to sell it or pass it on to heirs.  Future owners also will be bound by the easement's terms, and the land trust is responsible for making sure the easement's terms are carried through into perpetuity.

Unlike deed restrictions and covenants, a conservation easement comes with a stewardship commitment from the Land Trust ensuring that there will always be someone carefully monitoring the land under easement to see that its natural values are protected.  The Land Trust commits to a perpetual partnership with present and future landowners to ensure the conservation agreement is honored, and to provide landowners with enhanced resources to encourage conservation-focused land management practices.

Conservation easements, now the most popular means to protect land, came into widespread use after the Tax Reform Act of 1976 explicitly recognized them as tax deductible donations.  In order to meet federal tax code requirements to qualify as a tax-deductible charitable donation, a conservation easement must provide public benefit by permanently protecting important conservation resources.  For this reason, Five Valleys recognizes an on-going responsibility both to the intentions of the easement grantor and to the general public.

By removing or limiting the land's development potential, the easement lowers the land’s market value, which in turn lowers estate tax.  For income tax purposes, the value of the donation is the difference between the land's value with the easement and its value without the easement.  Whether the easement is donated during life or by will, it can make a critical difference in the heirs’ ability to keep the land intact.  See Potential Tax Benefits of Conservation Easements for more information.