Let’s Talk Conservation Easements…

This article about conservation easements in Colorado was the result of reading in the Aspen Daily News (on line) “Conservation easement approved by Pitkin County for McBride Ranch by Collin Szewczyk, Aspen Daily News Staff Writer, (Thursday, October 23, 2014)…”Deal lands long-time family millions in development rights …Pitkin County commissioners approved an application for the 635-acre McBride Ranch property to be designated as a conservation easement, potentially earning the family millions of dollars in transferable development rights”

Conservation easements are not new and the topic has long been a “hot button issue” in Colorado (and other states.) The websites noted here are only a few of the many sites dedicated to the topic of conservation easements in general (federal and state statutes) and in Colorado specifically.

No doubt I have omitted (unintentionally) many websites that are worthwhile and fully expect to hear from both the “pro” and “anti” groups about Colorado’s conservation easements initiatives. The information offered in this site supports neither a “pro” nor an “anti” view, but attempts to give a balanced view of the topic and suggestions as to where to gain more information.

Taken from an estate planning perspective – Conservation easements is and has been a complex issue and the best advice is… if you are thinking about using this as part of your estate plan, consider the services of both a qualified legal advisor and a financial/tax planning advisor.

As with any legal document or contract, one should have the most up to date information (legislative and financial) and legal advisement relevant to the topic. Consider also the long term perspective of using conservation easement as part of your estate plan.

Although several of the websites noted here are from earlier years (for example 2008) they offer an “historical perspective” about conservation easements and the changing public viewpoints and policies.

Conservation Easements: The Good, the Bad, and the Ugly by Dana Joel Gattuso  (2008)  www.nationalcenter.org  The title basically tells it all.

www.coloradoopenlands.org  “Donating a Conservation Easement” A helpful “how to guide” of the process.  In their article… Step 3 of the process is “advise your attorney and accountant of your plans…”  My opinion is that this should be Step 1.  Gather information and then begin a discussion of the advisability, risk/reward, accountability, of a conservation easement with the landowner and other interested parties (for example family members) and legal and financial counsel.

Department of Regulatory Agencies (DORA) Division of Real Estate- Colorado  www.cdn.colorado.gov/cs/Satellite  According to the definition on the website:

“A conservation easement is a voluntary, legally-binding and perpetual restriction that limits certain uses and prevents future development of a property. (Take specific note of the wording of legally- binding) It is a recorded deed restriction enforced by a non-profit organization or a governmental entity. Important conservation values, such as habitat, open space, scenic views, agriculture, outdoor recreation, or education, are protected forever….Landowners who donate all or a portion of a conservation easement to a non-profit organization or a governmental entity (“conservation easement holder”) may qualify for a transferable state income tax credit if certain requirements are met. Landowners may earn a tax credit at the amount of 50% of the donation value with a maximum credit of $375,000. For a landowner to be eligible for a tax credit, the conservation easement holder must be certified by the Division of Real Estate.”

A further point is that conservation easement law, or the legal/political issues surrounding conservation easements in Colorado are not static.

As an example: For 2014…(citing from the colorado.gov website) “Beginning in 2014, Senate Bill 13-221 established a pre-approval process prior to the tax credit claim for conservation easement donations made on or after January 1, 2014. SB13-221 authorizes the Director of the Division of Real Estate (“Director”) to determine the credibility of appraisal and the nine-member Conservation Easement Oversight Commission (“Commission”) to determine whether the donation is a qualified conservation contribution. The Department of Revenue no longer has jurisdiction to disallow a tax credit for issues relating to the appraisal or conservation purposes…”

UPDATE ON CONSERVATION EASEMENT GUIDELINES: WHAT EVERY COLORADO LANDOWNER SHOULD KNOW by Catherine Keske, Stephanie Gripne, and Lynne Sherrod  published 2008. An older article but a thoughtful analysis of the topic with some historical data.    www.ext.colostate.edu/pubs/natres

www.taxcreditconnection.com “Save Money on Taxes and Protect Open Space: Conservation Easement Income Tax Credits”    I have included this as a very general explanation about Colorado’s unique tax credit initiative.

According to the site:  “You can save thousands of dollars on your state income tax bill by participating in the state of Colorado’s unique conservation easement income tax credit program and help preserve Colorado’s natural treasures. ”  The Article explains and gives example of 2014 use of conservation income tax credit (in Colorado)

Other websites for more information:

www.landtrustalliance.org

www.cclt.org  Colorado Coalition of Land Trusts

Doubtless there are many other sites that can provide helpful background about the topic. Deciding what is right for you will depend on your unique circumstances as a landowner and your individual estate situation.

Please read my disclaimer at the bottom of this page.  Also, there is a column about “How I Can Help You” below.

visit my website:  http://www.attorneybarbaradlavano.weebly.com for more articles and some printable infographics.

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About Attorney Barbara Ann Dalvano

Attorney in Denver, Colorado with extensive practice experience in the areas of Estate Planning, Wills and Trusts, Business Succession Planning, Probate, Contract Law.

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