 achieve.
One answer is for landowners to inculcate a conservation ethic in their children and grandchildren. Yet, even if owners were confident that this could be done successfully, there would still the problem of maintaining stewardship traditions through uncertain times and future generations. In any event, confiscatory death and inheritance taxes often force even conscientious heirs to sell or over-develop lands in order to raise cash.
The conservation easement is a device that attempts to deal with all of these problems. Partly a creature of common law and partly a creation of recent statutes, the conservation easement does not operate through regulations. It does not modify or increase existing regulatory schemes or apply them to parcels not previously subject to them. Rather, the conservation easement works through private ownership. It divides a fee simple (i.e., ownership of all of the rights in a parcel of land) into two distinct interests. The first is the easement itself, which imposes conditions upon land use. The second is the original fee ownership, now subject to the easement. The owner of this interest has full ownership of the land for all purposes except those conflicting with the easement to which it is subject. Thus the owner of a ranch might give to a land trust an easement precluding residential or commercial development. The donor still owns the land and can use it for ranching, but no longer owns the right to use the land for residential or commercial purposes.
The tax benefits resulting from the grant of qualified conservation easements provide some landowners with funds for their retirement years, or allow them to fund or endow conservation management projects on the land at no additional net cost. Also, on the donor’s death, the lower appraised value may mean that family members will be able to keep the land instead of very possibly having to sell large parts of it to pay large estate and inheritance taxes.1
Since a conservation easement is established through a private agreement between a donor and an easement holder, there is considerable flexibility in tailoring their relationship. On one hand, the land trust or other holder might assume the complete day-to-day management of the donor’s undeveloped land and have the responsibility of nurturing a particular endangered species or other purpose of the easement. Alternatively, the role of the holder could be limited to ensuring that the donor and his successors do not violate the terms of the easement through impermissible development. Or, the parties could structure the easement to provide the holder with an intermediate level of responsibility and authority. Thus, to the extent the law permits and the holder is willing, the donor could structure the easement to provide what in his view is an optimal mix of economic and family utilization of land and stewardship of resources.
However, conservation easements do present potential problems. It is possible that the land trust holding the easement might insist on more Draconian controls on the land than the donor had agreed to. On the other hand, the easement holder might be lax, and the land might not be properly cared for or the donor’s heirs might be permitted to undermine the intended land stewardship. Conditions might change so that, for instance, an endangered species sought to be protected becomes plentiful or extinguished. The Internal Revenue Service might unfairly interpret the highly technical rules for favorable tax treatment. Powerful land trusts might serve as conduits by which land intended for private stewardship comes under the control of government. In all of this, it is important that statutes permit donors to retain as much ability to deal with future changes in scientific knowledge, social and economic conditions, and family needs as is consistent with the purposes of the easement. And it is important that donors structure conservation easements to permit them to exercise that freedom.
Thus, a carefully drafted conservation easement might provide owners with a good method of m