What are conservation easements?


(Editor’s note: This is the third installment in our four-part look at Ohio’s farmland preservation efforts.)
Landowners often say that they care about the land. The issue of farm transition has been discussed so the children understand parents’ wishes and sometimes the landowners indicate that a will or trust is in place to take care of the issue.
The good news is that they have given the matter serious consideration.
The bad news is that after the death of the well-intentioned farmers wills and trusts are often contested and overridden or just not enforced.
For example, an area farmer, now deceased, who thought his more than 300 acres would remain in agriculture and be protected by a trust, would be dismayed to know there will be at least 80 houses on that beloved land.
Easements are binding. The most permanent, most binding – and most misunderstood – farmland preservation option is the conservation easement.
This is a legal agreement between landowner(s) and a land trust, a government entity or other qualified organization such as a university or foundation. For the sake of brevity and because they function in similar fashion, this article will use only the term “land trust.”
All of these associations must conform to strict legal requirements to enter into conservation easements. If any is compelled to disband for any reason, it is required to transfer responsibilities to a viable like organization so that no land is left unprotected.
The basic idea is to preserve the land for agriculture and/or its natural state. The landowners are willing to not “develop” their land with more houses, roads or buildings not be in keeping with intent of the contract.
Watchful eye. There are more than 1,200 land trusts in the United States, comprised mostly of volunteers, devoted to protecting land. They agree to watch over the properties in their care, in a nonintrusive way, usually checking on the property once a year unless they learn of a threat to it.
The contract, forever tied to a deed, will not and cannot be ignored as a will or trust may be. Future owners will know of any relevant restrictions through a title search.
If the land trust does find a violation of the terms of the contract, it has legal right to force the return of the land to original state.
Rights maintained. With a conservation easement, landowners, present or future, do not give up any other rights besides development.
The right to privacy is not lost unless the owner wants to have some public activities or venue, such as a park. The landowner is not told how to farm or even that they have to use the land for agriculture, though reasonable conservation practices would be expected.
The owners can still sell, rent, lease or bequeath the property, but unless specified previously, it cannot be subdivided.
The contracts can be customized by discussions between the owners and representatives of the land trust. For example, it can be agreed that there can be one or more house or a part of the land excluded from the restrictions.
Others decide that the contract will include life lease or not go into the effect until a certain time such as the death of the owner.
Tax incentives. The primary advantage of a conservation easement is that the land is protected from development. But the Internal Revenue Service also offers significant income and inheritance tax incentives for permanent conservation easements.
The amount of the tax deduction is determined by subtracting the restricted use value (“farmer price”) from the likely price if the acreage was to be sold for developed (‘developer price”). This equals the “easement value,” which is determined by a certified appraiser.
No money is given by the landowner but the Internal Revenue Service considers this amount as if a cash donation was given to a qualifying charity.
How much and when these deductions can be used is determined by several factors.
Benefits to estate. Proponents list several benefits to an estate with a conservation easement. First, since the land is valued at “farmer price,” one of the children, grandchildren or even another farmer can afford to purchase it.
With an easement deduction, the estate value is lower so there will be less, if any inheritance taxes due.
Also, the Internal Revenue Service will allow a further 40 percent reduction of the estate value. This, as with anything to do with taxes, is too complex to cover in a few hundred words. An attorney or financial adviser, familiar with conservation easements, must be consulted.
It’s permanent? For some, the concept of a permanent contract is forbidding. For me and my husband, Phil, that was the ideal.
We have 120 acres, five children and many grandchildren. We wanted to be sure that they would always have some green space and hopefully someone in the family would farm or at least take care of this land.
Now with the contract that we helped to write, this property will be forever protected, whether in agriculture or not.
We have been accused of taking away options from our children, but we did it to keep alive the possibility that the farm could survive, that some of the environment would be protected. We will be leaving our heirs, not the green of developers’ dollars but the more valuable green of nature.
‘No remorse.’ Walter and Edith Brownson of Ashland County agree, for they also have a conservation easement for one of their farms.
“We are very pleased that we did this, especially with the population growth taking land out of production and growing houses,” Walter said. “We have no remorse for doing that and would like to see more of it.
“Our children were very much in favor of it.”
Creating a permanent conservation easement is a serious step for anyone and should be carefully researched. But our two families fully believe the environment and agriculture for future generations is in great jeopardy.
Ours and the seven other farms in Ashland County with finalized easements are only small patches in so many square miles, but we are encouraged because there are more in the discussion stage.
The awareness of our responsibility for good stewardship is growing.
(Next week: Ohio’s agricultural easement purchase program.)

About the author: Judy Kocab is a writer and advocate for farmland preservation education. She and her husband have placed their 120-acre Ashland County farm in a permanent conservation easement with a land trust.

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