How can granting an easement reduce a property owners estate tax?
Many heirs to large historic estates and to large tracts of open space, such as family farms, face monumental estate taxes. Even if the heirs wish to keep their property in the existing condition, the federal estate tax is levied not on the value of the property for its existing use, but on its fair market value, its highest and best use. The resulting estate tax can be so high that the heirs must sell the property to pay the taxes. A conservation easement, however, often can reduce estate taxes. If the property owner has restricted the property by a perpetual conservation easement before his or her death or by including the easement in his will, the property must be valued in the estate at its restricted value. To the extent that the restricted value is lower than the unrestricted value, the value of the estate will be less, and the estate will thus be subject to a lower estate tax. Even if a property owner does not want to restrict the property during his or her lifetime, the owner c
