A few years ago, a sale of 7,000 acres of California coastal property to a Land Trust, coupled with a contentious ballot issue involving a public conservation agency focused attention on conservation of lands and public policy.

Public policy supports conservation of lands in its undeveloped state by providing both Federal and State income and estate tax breaks for owners who donate property or property rights to conservation organizations. Using the set tax breaks correctly in an estate plan can serve to keep land in a family that might otherwise have to be sold to pay taxes.

Land can be valuable to us in many ways. To an investor, the value of a parcel of land is in the profit to be made from its sale. To an owner of commercial property, the property’s value is in the rents that can be collected for its use.

Due to the dramatic increase in property values in recent years, a family of otherwise modest means may own land of considerable appraised value. Upon the death of the last surviving parent, the heirs may face the obligation to pay state and federal estate taxes without having the financial resources to meet that obligation. Their only recourse may be to sell all or part of the land which was left to them, despite their own desires and the expressed wishes of their parents. In short, the failure to plan for the future of valuable family land after death may grant control over that land to the taxing agencies of government. Fortunately, there are alternatives.
By reducing the appraised value of land, the donation of a Conservation Easement to a Land Trust can reduce income and estate taxes. Since most of the appraised value of land is in its potential for development, the donation of development rights to a Land Trust leaves only the remaining value as taxable. This donation may also create a tax-deductible, charitable contribution in the year of the gift.

Thus, the donation of a conservation easement can protect land in two ways. First, it protects the conservation values of the land according to the specific restrictions contained in the conservation easement. And, second, it protects the integrity of the land from the threat of sale to satisfy estate taxes. Furthermore, this protection option can reduce income and property taxes for the parents while still living.

Since each conservation easement is individually written to address both the personal needs and the intentions of the donating landowner, land protected by a conservation easement can continue to be used by the donor’s heirs as the family has been accustomed. A family farm, for example, can be used, in perpetuity, for the production of crops and the pasturing of livestock. And, every bit as important, it can provide a home for the future generations of the family that has cared so deeply about its farmland.

Although Land Trusts have been protecting lands in the United States for over a century, most have been founded in the last 30 years. The earliest examples—such as the “Village Improvement Societies” of New England, the Maine Audubon Society (founded in 1843), and the Cincinnati Museum of Natural History (established in 1800)—were located in the eastern states. In 1965 there were 132 active Land Trusts all across the United States. By 1991 the number had increased to over 900, preserving nearly 3 million acres of valuable lands.