Up Front

The frightening thought of perpetuity. By C.J. Hadley

Tim Findley's "Forever and Ever, Amen" shines a light on land trusts and conservation easements (p. 42). He's kind about it but understands that many ranchers today have few choices and that their hard times are often caused by people in government agencies and environmental groups who care nothing for agriculture and who salivate when they come close to the possibility of taking private property.

We appreciate the fact that The Washington Post and members of the U.S. Senate followed RANGE ("Nature's Landlord" by Tim Findley, Spring 2003) in questioning the business practices of The Nature Conservancy. "Subdividing America" by Barney Nelson and Bob Dillard is also in this issue (p.70). They talk about TNC and its easements.

We like private property and think there should be more. Unfortunately, there's less today than yesterday, thanks to groups like TNC and people in the federal government who use badly written laws (like the Endangered Species Act) that pressure people to turn in their freedoms and rights. They brag about "willing" sellers, but if the sellers had any choice at all they wouldn't succumb to such powerful seducers.

"I'm sorry," one rancher said recently. "We have to sell a conservation easement to TNC. We will not survive if we don't."

At the recent annual meeting of "Stewards of the Range" in Reno, Nev., property rights attorney Paul Terrill, offered pros and cons on conservation easements: "Benefits include a cash payment, some short-term income tax benefits, and you can preserve open space. But the problems are numerous. Easement 'in perpetuity' is a very long time."

Development rights depend on terms of the conservation easement. "The day you sign the easement you lose rights to use your property and your heirs will be restricted," Terrill says. "The day you sign to nonprofit, you could find valuable mineral on your property; you can't mine under a conservation easement. Maybe later, your neighbor has a gas well come through that could pay you $300 per acre and 25 percent of the profits; with a conservation easement you can't do it because you gave your rights away. If the highway department wants to run a road through your property you will get a lower condemnation assessment because the value on your property is lower because of the easement-and that easement will not expire."

Terrill also talked about partners and the fact that selling a conservation easement does not put you on an equal footing with a land trust. "You are subordinate to the easement owner. They are the dominant owner. And your partner may not be your partner for long. They can convey the easement to another group that might interpret the easement in a different way. That puts you at their mercy. Fighting in court may be the only option but it's tough to fight The Nature Conservancy with $3 billion in assets."

If you are considering a conservation easement, Terrill says get good accounting advice on estate tax and use a real estate transaction lawyer (not your good-natured brother-in-law). "The easement needs to be very specific and limited. There are thousands of different options. If you make an easement five or 10 years you won't get the IRS deduction. Draft the easement so it's not the dominant estate; make it servient. Include a 'no assignment clause' to make sure that your partner can not assign without your consent. You don't want Earth First! calling the shots on your property."

The death tax might be repealed. If that happens, you won't need a conservation easement. And even if it isn't, Terrill says there are things that accomplish the same thing. "An exemption for wildlife management; accounting ways that can help with other IRS codes; family limited partnerships. You and your spouse can donate a certain amount of your property to heirs every year until the value is lower than the estate tax threshold."

Terrill urges sellers to be extremely cautious. "You are giving up valuable property rights. It is very seductive, but can seldom stand up to close analysis. Beware of the phrase, 'no use inconsistent with the conversation purpose.' That 'conservation purpose' can be interpreted in many ways and you are at the mercy of the dominant partner."

Conservation easements can cause harm to the local community and economy, lock up the land forever, and will never again be under an individual's control. The moral issues of destroying private property rights 'in perpetuity' should be considered. Future generations' right to choose what they do with private property will not be returned.

The 30th anniversary of the Endangered Species Act-which has caused more trauma for agriculture and encouraged more easements than anything else-is December 28, 2003. Congressman Richard Pombo (R-CA) is planning a party to demonstrate its failures: RANGE has been told, "The enviros will be screeching in pain."

Winter 2004 Contents

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