[Hvcatskillcewg] Merger of Title

[Heidi Bock]

Hello All,

 

A question of interest has come up here at CLC and I was wondering if
there is any insight out there about it

 

Here's the scenario put forth by our land protection folks: 

 

"Some nice wealthy landowner donates a conservation easement to a Land
Trust in New York State and thus benefits from a substantial charitable
deduction.

Land Trust records said easement and goes about its business.

Nice landowner kicks the bucket and bequeaths the property subject to
the easement to the same Land Trust.

Presto!  Merger of Title - the same entity cannot hold both the fee
ownership and conservation easement on the same property so the easement
miraculously disappears.

The Land Trust could now sell the property for its full fair market
value, unencumbered by a conservation easement?

 

But how can this be? Conservation Easements are granted in perpetuity.

 

The original deed of conservation easement is still gumming up the land
records (no release or cancellation is filed).

Donating a conservation easement does not bank development rights with
the land trust - those development rights are extinguished.

I don't think the IRS would be very happy to grant a substantial
charitable deduction on a gift of real estate, just to have that
valuable real estate reconstitute itself in a few years time and start
all over again.

 

It seems to me that Merger of Title is really an issue of how to deal
with the legal complexities during a presumably temporary period of fee
and easement ownership under a single entity.  To consider Merger of
Title as an automatic cancellation of a conservation easement threatens
the very principles of perpetuity and the extinguishment of development
rights that are the bases of a land trust's land conservation program."

 

Any thoughts, suggestions, comments...

 

 

 

Thanks,

 

~heidi 

 

 

 

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