Agenda - 02-01-1988 - Laserfiche WebLink

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Not only do the type of restrictions vary,but so can the size of the pro- might even bring the value of the estate below the exemption limit and free perry under easement. An owner may place under easement the entire pro- the heirs from paying estate taxes. At a time when land values are high and perty or only the portion that has greatest significance for conservation are still climbing,this incentive for granting a conservation easement may be interests.The size can be several acres or several thousand.Each easement is important both For the heirs and for the future of the land. All too often created in light of the particular situation, according to the values of the land roust be sold to cover the estate taxes. F J land and the activities acid wishes of its owner. 1 The easement is a legal document which is written in deed farm and is If a conservation easement is granted for a payment by the recipient, it constitutes a taxable event. if the easement is donated, it can constitute e n filed with the county register of deeds.The protection afforded by conserva- charitable contribution. •tion easements is usually permanent because easements legally bind all pre- sent and future owners of the land. The easement burdens the title to the The loss in market value resulting from the grant of a conservation ease- land thereafter, whether the land is transferred by sale, by gift,or by will. ment in perpetuity may also be entered as a charitable deduction when the donor calculates his or her income tax.*The reduction in income tax that A conservation easement need not open the land to public use. But if the owner wishes to do more than preserve the integrity of the natural results from taking a charitable deduction can help a landowner cover the costs of owning a resources, the easement tnay provide for limited public recreational an and maintaining the property. d If the land is n be given t an individual prior to death,federal gift tax educational activities, such as hiking, fishing, and nature study. may be due. The lower value may reduce the amount of the tax,or in some The limitations contained in conservation easements have lasting effect cases, may eliminate the need to pay any tax for that gift. in practice because each easement is granted to an organization or agency in- There may also be a property tax benefit.Easements do not remove land terested in preserving the natural characteristics of the land. T'he sole from the tax rolls, but assessors must consider the effects of enforceable responsibility of the recipient of an easement is to assure that neither the restrictions, such as conservation easements,on the value of the land.Thus, present nor any subsequent owners disregard the regulations on use set forth the land should be assessed at its actual value reflecting the limited potential in the easement. An casement would be enforced by litigation by the reci• use of the land. Actual value is defined as fair market value —in other pient,so the recipient agency must have the resources and determination to words, what a willing buyer will pay. County assessors should be notified make sure that the easement is enforced. Because the agency is assuming a after a conservation easement is granted, so that property taxes may be long-lived and important responsibility when it agrees to accept an ease- reassessed, meat,it makes the decision thoughtfully and in accordance with its own ob- in summary,the most distinctive aspect of protecting land through the jectives. Those public agencies specifically identified in North Carolina grant of an easement is that the land rernains in private ownership, yet its General Statute 121-34 to 42 are "t lie Stnte, any of its agencies, any city, use is regulated and the protection can be stronger than that afforded by county,district or other political subdivision or municipal or public corpora- zoning or stale land use laws. The financial aspects can be important from tion, or any instrumentality of any of the foregoing." In addition, any both the point of view of the owner's family and the future of the land. private charitable corporation or entity founded for conservation purposes A landowner can take this voluntary measure quite easily,but must weigh may also receive conservation easements. Public and private agencies the decision carefully, for once done, it is difficult to reverse. The financial interested in accepting conservation easements are discussed in Chapter IV. benefits must be weighed against the realities of a loss in market value; the People grant conservation easements primarily because they wish to pro- protection must be weighed against the need for flexibility.In many instances, tect land which they value and which will be important for its natural however,the range of covenants that can be contained in a conservation ease- attributes in the future.Their greatest reward is their sense of satisfaction at ment and the way they may be applied,afford tremendous room for finding a having protected something of value. however, the financial benefits of proper balance of personal and conservation considerations. granting a conservation easement in perpetuity can also be important. A conservation casement will affect the market value of the land to the Mutual Covenants extent that it limits the development and use potential. It is the effect on Occasionally there are situations where a conservation easement ma market value that is important when considering the financial aspects of y not be feasible, either because there is no recipient agency interested in easements. accepting the easement or because the landowner does not want to enter Any reduction in the market value may lower estate and inheritance into an agreement with an agency or organization. In such a case,it would taxes. Taxes must be paid on the amount an estate exceeds the exemption be possible to limit the future uses of the land through the imposition of limits set by state and federal governments, and these taxes would reduce mutual covenants if there are several landowners in the immediate area the assets in the estate going to the owner's heirs.Assuming that a parcel of interested in entering into mutually restrictive agreements. land is part of a taxable estate, federal and state taxes may have to be paid Neighboring landowners having a common conservation interest may based upon the appraised value of property at the time of death.Thus,any reduction in the value of the prwerty caused by the granting of an easement will similarly lower estate taxes. In certain instances,the reduction in value *See Appendix A regarding charitable deductions. 20 21