The donation of a conservation easement to a Land Trust can reduce estate taxes by reducing the appraised value of land. If the appraised value is reduced sufficiently, estate tax obligations can be avoided altogether. 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. 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 which has cared so deeply about its farmland.