Conservation Easement Donations

Transcription

1 Landowner Information Series: Conservation Easement Donations Conservation Easement Donations Thousands of acres of farm and forestland that contribute to the unique, rural character of Vermont have been permanently conserved by landowners who have donated conservation easements to the Vermont Land Trust. This popular method of conservation helps many families achieve their personal dream of protecting their land, while also making a lasting gift to their community and state. Landowners who choose to donate conservation easements will likely see tax benefits for their contribution. What is a conservation easement? A conservation easement is a voluntary legal agreement between a landowner and a qualified conservation organization such as the Vermont Land Trust (VLT). A government entity, such as a town, can also hold a conservation easement. A conservation easement protects land from development for future generations, ensuring that it will always contribute to Vermont s unique landscape. When land is conserved, it remains in private ownership, but carries with it protective restrictions that limit some uses. These protections are forever upheld by our stewardship staff. Conservation easements offer several advantages to landowners: The property remains in private ownership. If you conserve your land, you continue to own and manage the property, or you may sell it, or leave it to your heirs. Landowners can continue to make decisions about the use and management of their land. For instance, you may farm your conserved land, manage it for timber or wildlife, or decide whether to allow people to hunt or recreate on the land. 1

2 Landowner Information Series: Conservation Easement Donations Conservation easement donations can reduce income and estate taxes. A conservation easement gift is considered a charitable donation and may provide an income tax deduction. Conservation easements also can reduce the value of your land due to the limitations placed on some uses or future development. Reducing the overall value of your land, and therefore your estate, can make the difference between having the land sold to pay estate taxes and being able to leave the property to children. Conservation easements are flexible and easily tailored to a family s needs. Easements can be written to anticipate your future plans and reflect the unique features of your land. Easements are permanent. Conservation easements remain in force even after the land changes hands. They are recorded in the local land records and are binding on both the present and future owners of that property. Unlike deed restrictions, a conservation easement is forever upheld by VLT as an interested party whose goal is to protect the easement. What rights are retained by the landowner? Once a property is conserved, landowners can continue to use their land for a wide variety of activities. Examples of these permitted uses include the right to: Engage in agricultural pursuits Manage woodlands and conduct maple sugaring operations Build and maintain barns and other farm structures Clear, construct, and maintain trails for non-commercial recreational activities Construct a seasonal camp for personal use The easement may allow a pre-determined number of future residential subdivisions, provided the land s conservation values can be protected What restrictions are placed on the landowner? Activities that do not support the conservation goals of the property are limited or prohibited by a conservation easement. Conserved properties are generally subject to these provisions: Uses are commonly limited to those that involve agriculture, forestry, education, non-commercial recreation, and open space; Commercial, industrial, and mining activities are prohibited; New buildings are prohibited, except those constructed for agricultural or forestry purposes, or house sites specifically negotiated in advance; 2

3 Landowner Information Series: Conservation Easement Donations Signs are generally prohibited, except for informational and directional signs related to the property, e.g., Posted signs, if desired, by the owner. Excavation or any change of topography is not allowed, except when necessary to carry out a permitted use; With limited exceptions, subdivisions are generally prohibited; and Other unanticipated future uses that are inconsistent with the original owner s conservation goals are prohibited. This ensures that VLT has the ability to carry out the original landowner s intent in perpetuity. What type of land does the Vermont Land Trust conserve? The Vermont Land Trust accepts conservation easements on farmland, managed forestland, recreational land, natural habitat, and open land with substantial scenic or community value. Generally we work with landowners interested in donating an easement on 50 acres or more. On occasion, we will conserve smaller parcels with excellent resources, unique natural features, or significance to a community. We may also accept easements on land with primarily historic value. Our decision to accept a conservation easement is guided by a set of project-selection criteria. Does the public have access to conserved land? Owners of conserved land must allow VLT staff reasonable access to their property in order to perform regular monitoring visits. When donating a conservation easement, the landowner ultimately decides whether or not to include public access provisions in the easement. However, in some situations we may encourage landowners to allow public access as we consider the land in light of our project selection criteria. Examples of public access provisions in a conservation easement might include access to a trail or the property for hikers, hunters or skiers, or fishing access along a river or shoreline. 3

4 Landowner Information Series: Conservation Easement Donations How does the Vermont Land Trust ensure that conservation restrictions are followed? Recognizing how important it is that all of our easements are observed and enforced over the long term, our Conservation Stewardship Program performs both educational and monitoring functions. A baseline documentation report is prepared for every conserved property, describing the land s physical attributes and unique resources. After the easement is in effect, a stewardship staff member will schedule yearly appointments to visit the property and discuss any changes or future plans with the landowner. If a violation of the conservation easement is discovered, the stewardship staff member will attempt to personally contact the landowner in an effort to correct the problem. If this is unsuccessful, VLT will file a court enforcement action. So far, the few violations of our easements that have occurred have all been corrected voluntarily. What are the Tax Benefits of Donating Conservation Easements? A charitable income tax deduction may be available for a gift of a conservation easement to a qualified organization like the Vermont Land Trust. Under Internal Revenue Code Section 170(h), deductions may be taken for perpetual conservation easements if they are given exclusively for conservation purposes. This requirement can be met if the easement conserves land that: Involves significant farmland, forestland, and open space that either provides scenic enjoyment for the public, furthers public conservation policies, or includes historically important land or buildings; Includes relatively natural habitats for fish, wildlife, plants, or similar ecosystems; or Is used by the public for outdoor recreation or education. The donor may take a charitable income tax deduction for the easement s value, which is determined by a qualified appraisal. A qualified appraiser must prepare the appraisal, and the document must fulfill certain regulatory standards. Special Tax Incentives for conservation easements. As part of the 2010 Tax Act, Congress created an additional incentive for conservation easements donated in 2010 or Donors are allowed to deduct up to 50% (instead of 30%) of their adjusted gross income in the year of the gift, and may carry over any unused deduction for up to 15 (instead of 5) years. For more information, contact VLT and consult with your financial or legal advisor. 4

5 Landowner Information Series: Conservation Easement Donations To secure a deduction, a summary of this appraisal must be submitted on IRS Form 8283 with the donor s income tax return for the year of the gift. For donations valued in excess of $500,000, the complete qualified appraisal report must be appended to the tax return. The deduction may not exceed 30 percent of the donor s adjusted gross income, but any unused portion can be carried over for up to five more years. Vermont s income tax is a percentage of the federal tax, so an easement donation may also reduce state income taxes. Please see the side bar for information about special tax incentives through Finally, a conservation easement can reduce potential estate tax liability. The value of conserved property for estate tax purposes must take into consideration any reduction in property value resulting from the donation of an easement. What else should I know? The Vermont Land Trust can provide a wide range of information about conservation easements, other conservation options, and the effects of conservation easements on taxes. However, a land trust cannot provide legal or financial advice, nor can it guarantee that a deduction will be realized. Conservation easements are perpetual and involve a technical area of the law. Each landowner should consult with his or her own attorney to review the conservation easement in detail. If income or estate tax benefits are important, the landowner may also wish to consult with an accountant or tax planner. VLT does not recommend specific advisors but can provide donors with a list of attorneys and accountants who have expertise in the area. Vermont Land Trust 8 Bailey Ave Montpelier VT (802) This document was last updated February

6 Landowner Information Series: Tax Benefits of Donating a Conservation Easement The Tax Benefits of Donating a Conservation Easement When you give the gift of conservation through a conservation easement donation, you join a growing community of charitable Vermonters shaping the future of our state. By protecting land you care about, you can also be eligible for tax benefits, such as federal income tax and estate tax deductions. After placing a conservation easement on your property, you continue to own and manage your land, and pay property taxes to the town. You are free to sell or pass on your conserved land, though the easement will stay with the property. As the holder of the conservation easement, our role is to ensure the terms of the conservation easement are honored in perpetuity. Will I qualify for a tax deduction if I donate an easement? Donations must be made to a qualified organization: In order to be deductible for income or estate tax purposes, the donation must be given to a qualified 501(c)(3) organization. The Vermont Land Trust meets this requirement. The donation must meet conservation standards: The easement must be of a qualified conservation interest given exclusively for conservation purposes. These requirements are discussed in the next section. Landowners need to get a qualified appraisal: Because a conservation easement will usually have a value of more than $5,000, you must obtain an appraisal in order to claim a tax deduction. The appraisal must be prepared by an independent, qualified appraiser and contain certain factual information specified by IRS regulations. When you file your income tax return, you will need to include IRS Form 8283 (signed by the appraiser and a VLT representative) along with a supplement addressing certain items. For donations valued in excess of $500,000, the complete qualified appraisal report must be appended to the tax return. For more information on these requirements, please refer to our bulletin Appraisal Requirements for Conserving Land. 1

7 Landowner Information Series: Tax Benefits of Donating a Conservation Easement Mortgages must be discharged or subordinated: If there is an existing mortgage or lien on the conserved property, the mortgage or lien must be either discharged or subordinated to the easement. Our experience has been that most mortgage holders are willing to subordinate, so long as the bank determines that the restricted value of the property meets the bank s requirements for mortgage collateral. Check with your bank before you hire an appraiser; some banks may require that they hire the appraiser in order to ensure there is no conflict of interest. What land meets the criteria for Qualified Conservation Interest? Generally, a conservation easement meets IRS requirements if the easement is perpetual and the following criteria are met: The land will be used for public outdoor recreation or education, or The easement preserves an important natural habitat or ecosystem, or The easement maintains a historically important land area or building, or The easement results in a significant public benefit by preserving open space (including farmland and forestland) for the scenic enjoyment of the general public or pursuant to a clear governmental policy. Most of our conservation easements fall into the last category because they fulfill the following requirements: Scenic enjoyment. Development of the property would impair the scenic character of the local landscape or would interfere with a scenic panorama that can be enjoyed from one or more public locations. Or Clear Governmental Policy. Policies in Vermont that may fulfill this criterion include: land enrolled or eligible for enrollment in the Current Use Program; land within a designated scenic highway corridor; projects approved for Vermont Housing and Conservation Board grant funding; conservation zones identified by a local town plan or zoning ordinance; primary and secondary agricultural soils and forest soils receiving protection under Act 250; land inventoried in a LESA program; sites identified by the Vermont Heritage Program; land mapped by the Vermont Department of Fish and Wildlife as deer yard, bear habitat, etc. And Public Benefit. The easement will yield significant public benefit, considering the following factors: the uniqueness of the property to the area; the likelihood that development of the property would degrade the scenic, natural, or historic character of the area; the opportunity of the general public to use the property or to appreciate 2

8 Landowner Information Series: Tax Benefits of Donating a Conservation Easement its scenic values; the importance of the property in preserving a local or regional landscape or resource that attracts tourism or commerce to the area; whether VLT has or, in the future, will conserve other important resource lands in the vicinity. IRS regulations provide more specific guidance concerning requirements. We also recommend that you consult your legal advisor to ensure you meet the IRS requirements. How is the value of a conservation easement determined? Determining the value of a conservation easement is a two- or three-step process. The first step is to establish the fair market value of the property before it is restricted. The second step is to determine the fair market value after the property is restricted. This step requires that the landowner and VLT have agreed upon the terms of the conservation easement, so that the appraiser knows what rights the landowner is retaining and giving up. The difference between the before and after appraisals is considered to be the value of the conservation easement. The third step applies only if the landowner or a member of the landowner s family owns additional land in the vicinity of the conserved property that is not covered by the conservation easement. In this case, the appraiser must consider whether the value of the unrestricted property is being enhanced by the easement. If so, the easement value must be reduced by the amount of the enhancement. An example of how the third step would work: A donor owns a house and 200 acres valued at $300,000. She also owns an adjacent 10-acre building lot valued at $30,000. She conveys a conservation easement to VLT restricting the 200 acres next to the existing home and the building lot. An appraiser determines that under these restrictions, the 200- acre property now has a restricted value of $175,000. However, the appraiser also finds that the 10-acre lot has increased in value by $10,000 (to $40,000) because it is now adjacent to conserved land. Her deduction is $115,000 ($300,000 - $125,000 + $10,000). What are the income tax benefits of donating a qualifying conservation easement? When the easement meets the criteria for deductibility and the value is established by a qualified appraisal, the donation of the easement will be deductible against the donor's federal and, in some cases, state income taxes. 3

9 Landowner Information Series: Tax Benefits of Donating a Conservation Easement If the land has appreciated in value, the donor's income tax deduction is normally limited to 30% of the donor s Adjusted Gross Income in the year of the donation. If the easement value exceeds the 30% limit, the donor may carry over the unused deduction for up to five years. Income Tax Benefits of Donating a Conservation Easement Example 1 Note: There are special incentives for easement donations made in 2010 and Under the 2010 Tax Relief Act, Congress increased the allowable charitable deduction for easements donated in 2010 or 2011 to 50% (instead of 30%) of Adjusted Gross Income, and allowed any unused deduction to be carried over for up to 15 (instead of 5) years. See the examples in the box to the right. Are there any estate tax benefits to donating a conservation easement? It is possible to convey a conservation easement to VLT through a will or a living trust. We always like to have an opportunity to review and approve the easement before the will or trust is signed; a copy of the proposed easement should be attached to the will or trust as an exhibit so that we can assure you that the terms of the easement meets VLT s requirements and will be accepted. If the easement meets the requirements described earlier, the easement value is fully deductible from your taxable estate. In other words, the land will be valued at its restricted value when calculating the federal estate tax. The future of the estate tax has been in a state of uncertainty for several years, but was finally clarified in the 2010 Tax Relief Act adopted by Congress in December Unless your estate exceeds $5 million ($10 million for a married couple, with proper planning), you are unlikely to have an estate tax problem. Under standard tax law, donors can deduct 30% of the adjusted gross income in the year of the gift, and carry over any unused portion for five years. A donor has an adjusted gross income of $100,000. He is donating an easement valued at $115,000. Under the 30% rule, he can take a charitable deduction of $30,000 in the year of the donation and, if his income remains the same, a $30,000 deduction in each of the following two years. The remaining $25,000 may be deducted in the 4th year. If the donor is a Vermont resident and pays a combined federal-state income tax rate of 33%, the donor will realize $38,000 in income tax savings from the easement donation over the four-year period. Example 2 Under the 2010 Tax Relief Act, donors can deduct 50% of the adjusted gross income in the year of the gift, and carry over any unused portion for 15 years. Note that this only applies to donations made in 2010 and In the example cited above, the donor could deduct $50,000 in the first year, $50,000 in the second year, and $15,000 in the third year. For more information about how this may apply in your particular situation, you should consult your financial or legal advisor. 4

10 Landowner Information Series: Tax Benefits of Donating a Conservation Easement If your estate is larger than that, or if you ve made unusually large gifts to family members and others during your lifetime, then you should definitely consult with your financial advisors. The top estate tax rate is now 35%. Even if you don t have an estate tax problem, you will want to develop an estate plan with your financial and legal advisors so that your assets are distributed according to your wishes. Furthermore, federal law was amended in the late 1990s to allow heirs to reduce estate taxes by electing to place a conservation easement on the land within nine months of the owner s death. The law around this topic is quite complicated and applies in only a handful of situations. If you think this may apply to you, contact us for further explanation. Are there any property tax benefits to donating an easement? The desire to reduce property tax is rarely the driving force behind land conservation transactions. At this point, the experience in Vermont is too mixed to predict with any certainty what impact a conservation easement may have on property taxes. In general, town listers are required to assess property at its full fair market value, without regard to how interests in the property may be divided. When a town, state government, or a qualified non-profit organization (such as VLT) holds a conservation easement, the listers are supposed to assess the land on the basis of its conserved (restricted) value. In many cases, however, local listers fail to adjust the assessment when the land is conserved. Fortunately, if the land is enrolled in the state s Current Use program, it will be taxed on its use value rather than its fair market value, so the landowners may not see a higher tax bill. For further information about the impact of conservation easements on property taxes, please refer to our bulletin entitled Property Tax Impacts of Land Conservation. In conclusion This document summarizes complex federal and state tax laws. A summary of these laws must, by necessity, be an over-simplification. We can provide more detailed information about the tax laws affecting donations of conservation easements and can often prepare preliminary calculations on the tax benefits. However, it is essential that landowners seek independent legal and tax advice before finalizing 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. Vermont Land Trust 8 Bailey Ave Montpelier VT (802) vlt.org/land-protection Updated February

11 Landowner Information Series: Conservation Easements: Guide to the Legal Document Conservation Easements: Guide to the Legal Document This guide summarizes the standard legal document used by the Vermont Land Trust (VLT) for donated conservation easements. VLT can be flexible about some terms of each conservation easement, and VLT staff can assist landowners by preparing a document that meets each landowner s specific needs. This guide only summarizes the conservation easement. Before donating an easement, each landowner must be familiar with the terms of the legal document itself and should seek the advice of an attorney. Each conservation easement includes the following sections: A: Introduction The easement begins with a series of whereas clauses that summarize the public benefit that comes from permanently conserving land in Vermont. All easements held by VLT are perpetual and run with the land, meaning that the easement remains, no matter how the property is transferred or who the future owners are. While an easement can, in theory, be amended with the consent of VLT, such changes are extremely rare and only occur where the amendment does not reduce the protection of conservation values. A schedule attached to the easement describes the protected property conserved by the document. B: Statement of Purposes This section states that the document s primary purpose is to conserve productive agricultural and forestry uses, wildlife habitats, non-commercial recreational opportunities and activities, and other natural resource and scenic values of the Protected Property for present and future generations. This clause in each easement is tailored to identify the unique attributes of each property. This statement of purposes provides the basis for interpreting the easement. C: Restricted Uses of the Property This section identifies the following limitations on the landowner s use of the conserved property: 1. General: A conserved property may be used for agricultural, forestry, educational, noncommercial recreation, and open space purposes only. Unless specified in the easement, no residential, commercial, industrial, or mining activities are permitted.

12 Landowner Information Series: Conservation Easements: Guide to the Legal Document 2. Rights of Way and Easements: The easement prohibits rights of way and access easements, including driveways, roads, and utility lines, unless specifically permitted in the document or unless permission for new easements is obtained from VLT. Existing rights of way and easements are unaffected. 3. Signs: Signs are generally prohibited. However, exceptions to this rule include property identification signs, boundary markers, directional signs, signs posting the property against trespass, memorial plaques, and temporary signs indicating that the property is for sale or lease. Signs informing the public that farm or timber products are for sale or are being grown are also permitted. VLT, with the permission of the landowner, may erect signs indicating that the property has been conserved by VLT. 4. Trash: The storage of trash, human waste, or unsightly material on the property is prohibited unless VLT approves such storage in advance. The storing and spreading of manure, lime and other fertilizer for agricultural purposes is permitted without such approval. 5. Excavation: The easement prohibits filling, excavation, removal of topsoil, sand, gravel, rocks, or minerals, or any change to topography unless the change is necessary to carry out the uses otherwise permitted by the conservation easement. Because one purpose of the easement is to encourage agricultural uses, tiling and drainage improvement are permitted (see paragraph D(5) below). Surface mining is expressly prohibited. In rare cases and under specific conditions, sand and gravel extraction for forestry or agricultural use on the property may be permitted. 6. Subdivision: Subdivision of the property is prohibited unless the owner first secures VLT s written permission, or unless the easement includes a clause such as that described in paragraph D(9) below. VLT may allow a subdivision if the transfer would not hinder farm or forestry activity on the retained land. Any subdivided parcel remains protected by the conservation easement. 7. General Clause: The easement includes a general clause which ensures that no uses will be made of the property that are inconsistent with the purposes of the conservation easement, as described in Section B, above. D: Permitted Uses of the Property This section of each easement identifies the following permitted activities on, and uses of, the conserved property: 1. Agriculture: The landowner may establish, re-establish, maintain, and use fields, orchards and pastures in accordance with generally accepted agricultural practices and sound husbandry principles; however, the landowner must obtain written permission from VLT prior to clearing forestland. Construction and maintenance of farm roads are also permitted by this clause. If a question arises concerning what are sound agricultural and husbandry practices, VLT will seek the advice of professionals in those fields such as the Soil Conservation Service, UVM Extension System, or the Vermont Agency of Agriculture, Food & Markets.

13 Landowner Information Series: Conservation Easements: Guide to the Legal Document 2. Maple Sugaring and Firewood Cutting: The landowner may conduct maple sugaring operations and harvest firewood for heating residences and other buildings on the property. 3. Forest Management: VLT requires the development of a forest management plan to promote the long-term health and sustainability of forestland. The landowner may harvest timber and construct and maintain logging roads in accordance with a forest management plan which has been approved by VLT. Please see the VLT bulletin entitled Managing and Harvesting Woodland for a detailed explanation of forest management plan requirements. The easement may allow heavy cutting if consistent with the purposes of the easement or for silvicultural reasons identified in the forest management plan, or required because of the natural occurrence of fire, wind or insect damage. 4. Farm Buildings: The landowner may construct and maintain barns, sugar houses and similar structures on the property (and associated drives and utilities) provided they are used for agricultural or forestry purposes. The owner must obtain prior written approval from VLT, and permission will be granted if the location of new structures is consistent with the easement s purposes as described in Section B. 5. Water Resources: The landowner may improve and establish sources, courses and bodies of water for uses permitted under the conservation easement. The easement requires that the natural course of existing surface water drainage and runoff not be unnecessarily disturbed, except where required to improve the drainage of agricultural lands. The construction of ponds and reservoirs is permitted with the prior written consent of VLT. Water resources are required to be protected during and after timber harvesting operations by applying Acceptable Management Practices (AMPs) as defined by the Department of Forests, Parks and Recreation. 6. Trails: The landowner may clear, construct, and maintain trails for non-motorized recreational activities. Snowmobiling, hunting, and trapping are left to the discretion of the landowner. Unless the easement specifically provides otherwise [see Section G(1) below], the owner is not required to permit public use of the property. 7. Existing Homestead: Any existing homestead is generally excluded from the protected property unless it makes a significant contribution to the conservation goals of the easement. When the homestead is included, the easement normally identifies a Homestead Complex area, within which the owner is entitled to maintain, repair, renovate, enlarge, or rebuild the existing dwelling and associated improvements without VLT s prior approval. However, no new dwellings can be constructed nor can the Homestead Complex be conveyed separate from the protected property [except as may be provided in paragraph D(9) below]. 8. Additional House Sites: The easement may allow the construction of one or more additional residences with associated improvements, provided the landowner first obtains VLT s approval for the location of each dwelling. The location of new homes must be consistent with the easement s purposes as described in Section B. 9. Subdivision: The easement may allow subdivision of the property to create a parcel for each house site permitted under paragraph D(8) above. The location of subdivision boundaries must be consistent with the easement s purposes as described in Section B.

14 Landowner Information Series: Conservation Easements: Guide to the Legal Document 10. Rural Enterprises: With VLT s prior approval, the landowner may conduct a variety of rural enterprises or non-agricultural/forestry business activities as long as they are consistent with the conservation easement, subordinate to any agricultural and forestry business, and they are located in a way that minimizes negative impact on existing and future agricultural and forestry uses. New buildings for rural enterprises must also be approved in advance and certain restrictions on size, location, and appearance would apply. E: Enforcement of the Easement Under this section of the easement, VLT accepts the responsibility of monitoring the property and, if necessary, enforcing the terms of the easement. If a violation occurs, VLT will attempt to contact the landowner personally to secure voluntary compliance. VLT is required to notify the landowner by certified mail of the action required to correct the violation. VLT may enforce the easement in court if the violation is not corrected. VLT will work with the landowner to voluntarily correct any violation of the conservation easement to avoid court enforcement. However, when voluntary efforts fail and a significant violation has occurred, it may be necessary to seek injunctive relief (an order requiring correction of the violation) or an award of monetary damages. The owner may be required to reimburse VLT for its enforcement expenses. F: Miscellaneous Provisions Each easement includes the following additional miscellaneous clauses: 1. VLT may request reimbursement from the landowner for extraordinary staff and other costs when the owner seeks prior written approval from the VLT for new structures, ponds, etc., should the review process become unreasonably time consuming or complicated. If a landowner requests written approval as part of the periodic monitoring process and provides VLT with all information necessary to review the request, reimbursement will not be sought. 2. The easement requires the landowner to comply with any state or local regulations which govern uses of, or construction on, the conserved property. 3. VLT may only transfer the conservation easement to a state agency, town, or a qualified conservation organization which agrees to enforce the easement. 4. In the unlikely event the easement is extinguished by eminent domain or other legal proceedings, VLT is entitled to any extinguishment payment for the value of the conservation easement. 5. Any future deed or lease conveying an interest in the property must refer to the conservation easement. The landowner must also notify VLT of the names and addresses of any new landowner. This ensures that new owners are aware of the conservation easement and provides VLT with the opportunity to contact new owners to discuss the easement.

15 Landowner Information Series: Conservation Easements: Guide to the Legal Document F: Other Special Provisions Depending on the special circumstances of each conservation property, one or more of the following provisions may be included: 1. Public access: A clause may be included permitting public access to the property, often confined to an identified trail, for such purposes as walking, skiing, or gaining access to a water body or other feature of public interest. 2. Historic preservation easement: When structures or sites with rare historical or archeological value are present, special provisions protecting those structures and sites may be included in the easement. 3. Habitat or significant natural features protection: When specialized habitats or natural features are located on the property, such as a deer wintering area, bear habitat, clayplain or floodplain forest, vernal pools, or riparian features, easement language can be added to protect the habitat or feature from intrusive activities. F: Other Important Information 1. Encumbrances: All mortgages, liens, or similar encumbrances on title to the property must either be discharged or subordinated to the conservation easement. This prevents termination of the easement in the unlikely event of a foreclosure. 2. Tax Deduction: A landowner who seeks a charitable income tax deduction for the gift of a conservation easement must comply with a variety of Internal Revenue Code and regulatory requirements. Please refer to VLT s bulletin entitled Tax Benefits of Donating Conservation Easements. 3. Independent Advice: The donation of a conservation easement can involve a variety of legal, tax, estate, and family issues. Donors should obtain the advice of qualified legal and financial advisors before making such an easement donation. For more information on our land conservation, visit: Vermont Land Trust 8 Bailey Ave. Montpelier, VT (802) Updated: April 2011