Conservation easements in Ohio are a way to preserve family land and reduce taxes by permanently restricting development and land use in cooperation with a government agency, Ohio land trust or nationally recognized land trust. The easement can be donated or sold to the agency or trust and the value of the easement deducted from taxes as a charitable contribution.
Ohio estate planning attorneys may advise clients to consider donating an easement for conservation purposes if they own substantial real estate that is used primarily for agriculture or is undeveloped and the client wants it to remain that way. Conservation easements in Ohio may also be recommended if estate taxes threaten to result in subdivision of the family property upon the landowner’s death. Donating an easement to a national or Ohio land trust can lower estate taxes enough to prevent this in some cases.
Preserving land use for conservation
A conservation easement in Ohio is an agreement between an Ohio landowner and the easement holder to restrict development or land use on the property for conservation purposes. The easement holder is usually a national or Ohio land trust or a government agency. Conservation purposes can range from preservation of water quality or agricultural resources to protection of migratory routes and wide open spaces. In addition to any fiscal benefits, the landowner has the satisfaction of knowing he or she is helping to preserve the targeted resource and is likely to benefit the community for generations to come. The easement can be sold to the easement holder or donated as a charitable contribution.
Binding on future landowners
Conservation easements in Ohio are perpetual, meaning they cannot be revoked or terminated by any current or future landowner. An easement can only be extinguished if the property is acquired by local government via eminent domain for a project whose value exceeds the value of the conservation interest. The perpetual nature of these easements assures the landowner that the land will be enjoyed by future generations in its current state without risk that it will be divided or developed.
Preserves landowners’ rights to use the land
Restrictions of a conservation easement are tailored to each situation according to the conservation needs and the landowner’s needs. Usually landowners are permitted to continue using the land as they’ve been using it, such as for farming or to live on.
Land remains private
Ownership of the land and land-use rights not restricted in the agreement remain with the landowner. The public and the easement holder do not receive any rights to use the land unless specifically agreed to in the easement agreement. However, the easement holder has the right and responsibility to enforce the easement terms if they are being violated by the donor or a future landowner.
The tax benefits associated with conservation easements in Ohio are often the primary motivator for donating or selling an easement. Because the restrictions of the easement significantly decrease the sale value of the property, the difference in value before and after the easement takes effect can be deducted from federal income tax as a charitable contribution. Easement donors can deduct up to 30% of their adjusted gross income (AGI) per year for up to 6 years total or until the deductible value is used up. In Ohio, the difference in value can also be deducted as a charitable contribution from state income tax.
Conservation easements can also lower estate taxes in two ways. First, since the value of the property is decreased, estate taxes on the property will be lower (as will property taxes). Second, up to 40% of the land value may be excluded from the estate when the owner dies, which can reduce estate taxes significantly. However, this exclusion is capped at $500,000. A landowner’s heirs may donate an “after death easement” of property they inherit to take advantage of estate tax benefits, though this must be done before the estate return is filed.
Is a conservation easement in Ohio a good idea for you?
Many factors need to be considered before donating or selling a conservation easement in Ohio to an Ohio land trust, national land trust or government agency. In Ohio, estate planning attorneys at Gudorf Law Group, LLC, can help you determine whether your planned giving goals can be achieved through a conservation easement. In Ohio, arrange a free consultation with our Ohio estate planning attorneys by calling 1-877-483-6730.