CONSERVATION EASEMENTS

Flathead Land Trust is dedicated to private land conservation through the use of voluntary conservation easements. Conservation easements are negotiated agreements between a landowner and a land trust that establishes the landowner's commitment for retaining his or her property as open lands. In essence, a conservation easement is a voluntary legal agreement that limits the landowner's ability to develop the land and calls for conservation of the property's natural values. 

A conservation easement is negotiated between the landowner and a land trust based in part on the landowner's desires, so easements vary in intent and purpose. But easements typically restrict these land developments: Subdivision for residential or commercial activities, dumping of toxic waste, and surface mining.

It is important to note that under the terms of a conservation easement the landowner continues to own and manage the property. The property still produces crops, hay, livestock, timber and other commodities. The landowner still makes all the farm/ranch decisions, still pays property taxes, and because the goal of the easement is to conserve open lands, the goal of the easement is to preserve the elements of a working farm or ranch.  What the property cannot produce, under the terms of the easement, are subdivisions or industrial activities.

By state law, conservation easements must accomplish at least one of these three conservation purposes: Preservation of open space (including farmland; ranchland and forestland); preservation of a relatively natural habitat for fish, wildlife or plants; or preservation of lands for education or outdoor recreation of the general public.

The conservation easement protects the lands in perpetuity, and the easement is recorded at the county courthouse with the county clerk and recorder. The easement is also monitored (on an annual basis) by the land trust holding the easement, and if violation occurs, the land trust enforces the terms of the easement.

Landowners who place easements on their property do so for a variety of reasons. The value of the easement can qualify as a charitable contribution and potentially be eligible for federal income tax and estate tax benefits. Remember, the easement restricts commercial, industrial and residential subdivision development of the property, so in a practical sense the land value is diminished with the easement. Since that land value is voluntarily diminished - and voluntarily diminished for conservation purposes - the landowner can potentially receive tax benefits.

Conservation easements can be especially useful as part of a comprehensive estate plan. Land is often a major asset of many family holdings, and just as there are ways of reducing the cash value of an estate, so a conservation easement can substantially reduce the value of the land.  
In August of 2006 the President signed federal legislation expanding the federal tax incentives of conservation easement donations. The incentives allowed qualifying farmers and ranchers to shelter 100 percent of their income from federal income taxes for potentially up to 16 years. While the legislation expired at the end of 2009, Congress is expected to extend it through 2010.
Other tax benefits may exist, so land trusts always encourage landowners to consult their attorney or tax advisor to fully explore the estate and income tax benefits associated with the charitable donation of a conservation easement.

In other cases, the landowner donates or in other ways conveys an easement to a land trust for more altruistic reasons. In many cases, the landowner has such a bond with - and passion for - the land that the landowner has one simple wish: To protect the land, to keep the property whole and intact, long after the landowner and the rest of us have departed.

The only way to protect private lands in perpetuity is through a conservation easement.
For detailed information, download our complete pdf file, Pursuing a Conservation Easement.