About Conservation Easements

A conservation easement, simply put, protects private lands from inappropriate development.

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 agreement 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 agreement 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.

In August of 2006 the President signed federal legislation expanding the federal tax incentives of conservation easement donations. These new incentives allow qualifying farmers and ranchers to shelter 100 percent of their income from federal income taxes for potentially up to 16 years.

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 some cases, the conservation easement is sold rather than donated to the land trust. The end result is the same: Open lands, continuation of working farms and ranches, protection of wildlife habitat and preservation of what makes Montana such a unique and special place. In rare cases, the fee title of the private land is sold or donated to a land trust, and in some cases - most notably Plum Creek Timberlands property in the Blackfoot and Swan valleys - the land purchased by the land trust is later sold either to federal agencies or private conservation buyers to enhance land conservation in those areas.

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.

Some have questioned the need for conservation easements to be in perpetuity, but there are several reasons why the easements follow the land forever. One, current landowners who donate or otherwise convey a conservation easement want assurances their property will be protected not just through their lifetime, but forever. Two, federal law requires the conservation easement be held in perpetuity to qualify for federal income tax and estate tax benefits. Three, there is a concern that if conservation easements granted tax deductions and were allowed for terms - say, 20 years or 100 years - landowners could be tempted to receive the federal tax deductions for decades while speculating on lands that are rising in value, then subdivide that same property later after the term of the conservation easement expires.

Also, there are many land use decisions - on both private and public lands - that are made on a regular basis that in essence are made in perpetuity. When a county planning board and county commission vote to allow a 50-lot subdivision, and the land fills with 50 homes, there is no doubt that land will be in residential/commercial/industrial use in perpetuity.

The question of public access to conservation easement lands occasionally comes up, and the issue is addressed in the traditional Montana manner: The landowner controls access.

In many cases, land trusts work hard to enhance and expand recreational access to both private and public lands. Some members of the Montana Association of Land Trusts have active trail programs that significantly expand hiking and other recreation opportunities in their areas. Prickly Pear Land Trust in Helena has taken the lead on an ambitious rails-to-trails program in the Missouri River area and the Gallatin Valley Land Trust helps maintain and expand a large array of trails in the Bozeman area.

At a ceremony along the Madison River in July 2006, the Trust for Public Land and about 400 friends gathered to honor a conservation easement that provided hunting access to Madison Valley bottomlands and hills, greatly expanded access along the fabled Madison River, and allowed the Forest Service to establish a trailhead on private land for access to national forest lands and the Lee Metcalf Wilderness Area.

Above all, land trusts seek to protect and conserve open lands, protect and conserve wildlife habitat, protect and conserve working farms and ranches, and protect and preserve stream corridors.

The number of easements and easement acreage increase on a fairly regular basis, but association members within the Montana Association of Land Trusts hold roughly 900 easements and protect slightly less than a million acres of Montana private lands.

For more information about Montana land trusts, click here.