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Lasting Legacy
Saving a Way of Life
Arizona’s diverse landscapes shape our cultural identity and enhance our lives. Our beautiful mountains, deserts, waterways, and historic places reflect our regional community values. People move to north-central Arizona from both within and out-of-state to enjoy small town living that offers enhanced opportunities to engage with our unique and diverse natural surroundings. Conserving these unique landscapes enhances our quality of life and supports vibrant local economies.
Additionally, conserving land works to protect our water supply, provide habitat for our fish and wildlife, preserve our agricultural heritage, and offer recreational access and opportunities, Without our wide.open spaces to experience and enjoy, Arizona just wouldn’t be Arizona.
The Central Arizona Land Trust (CALT) works each day to conserve many of the natural areas we all love and cherish. In partnership with private landowners and citizens just like you, CALT is here to help landowners preserve Arizona for future generations. The primary tool used by CALT and other land trusts across America is the establishment of conservation easements. These are voluntary agreements between private landowners and qualified land trusts (or sometimes governmental agencies) that prevent future development to ensure the land you and your family love will be protected in perpetuity. In turn, the federal government recognizes conservation easements as charitable contributions, which may be eligible for enhanced tax benefits and reduce estate taxes. Saving a slice of Arizona’s unique heritage may be an option to explore as you plan for your lasting legacy.
Creating Lasting Legacy through Conservation Easements
A Flexible Agreement with Willing Landowners
Landowners who have granted conservation easements have found that each easement is drafted to speak to the protection of the resource as well as the circumstances of the landowners. In this way, they offer great flexibility, yet provide a permanent guarantee that the land will never be developed. For example, an easement on property containing rare wildlife habitat might prohibit future development, while one on a ranch or farm will allow continuation of the agricultural operation. Perhaps most importantly, a conservation easement can be essential for passing land on to the next generation. By removing the land’s development potential, the easement may reduce its market value, which in turn may affect estate taxes. Whether the easement is donated during life or by will, it can be helpful to the heirs’ ability to keep the land in the family.
Financial Benefits
There are two types of financial benefits that accompany a conservation easement:
Federal Tax Deduction
A conservation easement may be treated as a charitable gift if donated to a qualifying organization, making the value of the easement tax deductible. The federal tax incentive for conservation easements allows a landowner to deduct the easement’s value up to fifty percent of his/her adjusted gross income, with a fifteen.year carry forward period. Qualified farmers and ranchers are allowed to deduct the easement’s value up to one hundred percent of their adjusted gross income with a fifteen.year carry.forward period.
Estate Tax Incentive
Another important tax benefit is the reduction of estate taxes. By granting a conservation easement the value of the land may be decreased, which can lower the value of the land for estate tax purposes. An exclusion from the taxable estate is allowed for up to 40% of the remaining property value (maximum of $500,000) in the estate.
Non-Financial Benefits
Landowners may have different reasons for donating a conservation easement. Many reasons have nothing to do with financial gain but the desire to protect land from being developed. landowners who have donated easements consistently state that the benefits of the conservation easement extend far beyond their pocketbook.
These non-financial benefits include the preservation of Arizona’s landscapes in an open and undeveloped state, preservation of the rare environments, riparian and riverine, and support of wildlife habitat and movement corridors.
Easement Requirements
Easements must be permanent and established for at least one of the following:
- Preservation of open space for scenic enjoyment or pursuant to a governmental conservation policy that will yield a significant public benefit
- Protection of a natural ecosystem
- Preservation of a historically important land area or certified historic structure
- Outdoor recreation or education of the general public
Easements must be donated to and held by a qualified conservation organization or governmental organization with a commitment to protect the easement’s purpose. Easements must contain restrictions that the qualified organization can enforce.
Costs to the Donor
Typically, the conveyance of a conservation easement requires the following items to complete the transaction:Appraisal Report, Baseline Documentation Report, Mineral Remoteness Report, Title commitment and closing costs, land Trust Project Administration Fee, and a Stewardship Contribution to the qualified land trust for perpetual stewardship (annual site visits).
Landowners contemplating a conservation easement should note that property with a mortgage must ensure that the mortgage deed can be subordinate to the deed of conservation. Therefore, landowners should consult with their banks/lenders to determine the process for mortgage subordination on an existing mortgage or one placed on the property after the conveyance of a conservation easement.
This document summarizes complex federal tax and estate laws. Landowners should seek independent legal and tax advice before entering a land conservation transaction. This will ensure that the donor fully understands what is, and is not permitted under the conservation easement and what the anticipated tax benefits from the transaction will be. Each donor’s tax situation is unique and donors must rely on recommendations of their legal and tax advisors.
Easement Requirements
Easements must be permanent and established for at least one of the following:
- Preservation of open space for scenic enjoyment or pursuant to a governmental conservation policy that will yield a significant public benefit
- Protection of a natural ecosystem
- Preservation of a historically important land area or certified historic structure
- Outdoor recreation or education of the general public
Easements must be donated to and held by a qualified conservation organization or governmental organization with a commitment to protect the easement’s purpose. Easements must contain restrictions that the qualified organization can enforce.
Costs to the Donor
Typically, the conveyance of a conservation easement requires the following items to complete the transaction:Appraisal Report, Baseline Documentation Report, Mineral Remoteness Report, Title commitment and closing costs, land Trust Project Administration Fee, and a Stewardship Contribution to the qualified land trust for perpetual stewardship (annual site visits).
Landowners contemplating a conservation easement should note that property with a mortgage must ensure that the mortgage deed can be subordinate to the deed of conservation. Therefore, landowners should consult with their banks/lenders to determine the process for mortgage subordination on an existing mortgage or one placed on the property after the conveyance of a conservation easement.
This document summarizes complex federal tax and estate laws. Landowners should seek independent legal and tax advice before entering a land conservation transaction. This will ensure that the donor fully understands what is, and is not permitted under the conservation easement and what the anticipated tax benefits from the transaction will be. Each donor’s tax situation is unique and donors must rely on recommendations of their legal and tax advisors.
Are you interested in creating a lasting legacy of conservation in Arizona?
Download our brochure, ‘Create Lasting Legacies Through Conservation Easements,’ to learn more about how you can protect the landscapes you love for future generations. Get started today by clicking the download link below.
Join Us in Our Mission
Help Us Save The Places We All Love
If you're passionate about preserving Arizona's natural and cultural heritage, then support the Central Arizona Land Trust today. Whether you're interested in making a donation, or learning more about conservation easements, we offer a range of opportunities for you to get involved.
Contact us today to learn how you can make a difference in Arizona for future generations!