How a Conservation Easement Works

A conservation easement—like that used by Dave and Kim Everett (see their story here)—is a legal agreement between a landowner and a land trust or government agency. The agreement permanently limits the use of the land to protect its value as open space.

You give up some rights when you donate or sell a conservation easement. But a positive side of easements is that they do offer flexibility, which can mean continuing the farm indefinitely.

When the development potential is removed by an easement, the property’s market value generally is lowered, which in turn lowers potential estate taxes. This can be an important tool for heirs to help reduce their potential estate tax burden.

The amount of land in the U.S. protected by land trusts using easements is more than 16 million acres, according to the Conservation Easement Database. Most easements bind the original owner and all subsequent owners to the easement’s restrictions.

Only permanent easements qualify for income and estate tax benefits. Most conservation easements are held or administered by land trusts—nonprofit organizations that work to conserve land via stewardship and easements. There are nearly 1,700 private land trusts in the United States.

You can find out more information about how conservation easements work at The Nature Conservancy website (www.nature.org) and how many and what types exist in the U.S. at the National Conservation Easement Database (www.conservationeasement.us).