The Good, The Bad, And The Ugly

Interesting series of articles in the <a href="http://www.billingsgazette.net/http://www.billingsgazette.net/">Gazette</a> about conservation Easements and there use and affects in Eastern Montana. <br />n<br />nThe Good:<br />n<br />n<a href="http://www.billingsgazette.net/articles/2006/02/26/news/state/25-easement.txt">Conservation easement preserve family's way of life</a><br />n<br />n<blockquote>Glasgow-area rancher Steve Page wasn't thinking about tax incentives when he negotiated a conservation easement on 24,000 acres in Valley County.<br />n<br />n"The fundamental concern of our conservation easement is preservation of native sagebrush grasslands," he said.<br />n<br />nBeyond protection of a family way of life, the easement had the advantage of reducing the value of the ranch. That, in turn, will reduce inheritance tax liability.<br />n<br />nAs the price of land continues to rise, the reduction in value can become important to multigeneration operations. It can mean the difference between selling the farm to pay the taxes and keeping it in the family for generations to come.</blockquote><br />n<br />n<a href="http://www.billingsgazette.net/articles/2006/02/26/news/state/50-grow.txt">Conservation easements grow in Eastern Montana</a><br />n<br />n<blockquote>Montana ranchers watching as rising land prices spread east of the mountains have started to worry that the legacy of their grandfathers and fathers may be lost in a checkerboard of expensive private hunting preserves.<br />n<br />nWhen land prices soar, so does the tax liability of the estate a rancher may want to pass to another generation. Many in Western Montana, where land has become more valuable for recreation and development than for traditional agricultural uses, are embracing the concept of conservation easements. The idea is moving east of the divide.</blockquote><br />n<br />nYou will note both these articles mention the fact that a benefit of Conservation Easements is the reduction of tax liability of the estate of a landowner passing away. Everybody tells me the estate tax is a good thing and those evil rich people should pay more money and it <a href="http://leftinthewest.com/index.php/2005/04/14/3-is-a-lot/">doesn't affect Montanans</a>. These stories seem to say something different than that. They are saying that the tax liability is so great that efforts have to be made to reduce the tax or risk losing the place. This is the reason the Estate Tax don't seem to affect many farms and ranches. Farmers and Ranchers tend to do something about the situation before it kicks in. Every day farmers and ranchers are penalized, by having to do things to avoid the tax, for working the land and passing it on to their families. The Conservation Easement is one tool they use.<br />n<br />nThe Bad:<br />n<br />n<a href="http://www.billingsgazette.net/articles/2006/02/26/news/state/30-security.txt">Landowners seek security</a><br />n<br />n<blockquote>Conservation easements aren't for everyone, Big Timber real estate agent and land manager Mark Norem advises.<br />n<br />nThere are a lot of things to consider when placing restrictions on a piece of property that will forever prevent subdivision, surface mining or other commercial development.<br />n<br />n"You have to measure the benefits and weigh the risks," he said.</blockquote><br />n<br />nPlacing restrictions on what you can do to the place might not be what future generations want. You are limiting their course of actions.<br />n<br />nThe Ugly:<br />n<br />n<a href="http://www.billingsgazette.net/articles/2006/02/26/news/state/45-permanence.txtv">Critics of easements take issue with permanence</a><br />n<br />n<blockquote>Conrad farmer/rancher Llew Jones has a one-word objection to conservation easements — perpetuity.<br />n<br />n"A lot of people are beginning to worry about 'forever,' " he said.</blockquote><br />n<br />nPerpetuity. How can I have any idea what my grand kids or Great-grand kids, if I have any, know what they want to do with this place? Do I want to place these conservation burdens on them? Do the tax advantages outweigh the loss of freedom? <br />n<br />nThese are all questions that make the whole Conservation Easement situation such a hard thing to figure out. Locking your descendants into a mode they might not want to be in. Is this right and proper? I don't know that I have the answer to that. Most of what drives these decisions is tax liability, particularly estate tax. If active farmers and ranchers didn't have to worry about this it wouldn't become the tipping point that drives people into the conservation easement.<br />n<br />nAs you can tell I am not a big fan of the easements but they are a way of life nowadays. Hopefully I can avoid burdening my family in the future with one of these contraptions and limiting them into how they can use the land and lead their lives. Only time will tell.<br />n<br />n<b>I see humanity now as one vast plant, needing for its highest fulfillment only love, the natural blessings of the great outdoors, and intelligent crossing and selection. Luther Burbank </b>