​By Attorney Edward Jesson

For landowners who are concerned about taxes and/or their property being developed after they pass away, whether it be farmland, timberland, or mountain land, a conservation easement can be a valuable tool in estate planning. When properly utilized, conservation easements can protect land from future development, generate meaningful tax benefits at both the state and federal level, and help ease the transfer of property to the next generation.

Conservation easements are voluntary legal agreements between the landowner and a qualifying land trust or government entity that permanently limits certain uses of the land to protect its conservation value as undeveloped land. The landowner still owns the land, and can sell it, lease it, or pass it on to their heirs, but the easement runs with the land, meaning that the specific conservation restrictions bind all future owners, not just the person who granted it. Common restrictions may include limits on subdivision, commercial development, and mineral extraction, while still allowing things like agricultural use, timber management, and various recreational uses.

There can be several tax benefits to using conversation easements in your estate plan.  In North Carolina specifically, a conservation easement can provide a significant reduction in property taxes.  Someone who makes a qualified donation of a real property in North Carolina for an approved public benefit may be eligible for an income tax credit up to 25% of the fair market value of the land.

For high-net-worth individuals concerned about estate tax exposure, conservation easements can reduce a property’s fair market value due to the development restrictions, thus lowering their total net worth. Moreover, when land is donated to an eligible organization, it is usually treated as a charitable donation leading to significant tax benefits.

There are, of course, tradeoffs. Once recorded, a conservation easement cannot be undone by the current or future owner who has a change of heart about the best use of the land.  The specific terms of the easement are negotiated between the landowner and the holding organization, and the drafting stage is critical: a well-drafted easement, properly integrated into the broader estate plan, can protect both the land and the family for generations. On the other hand, a poorly drafted one can create restrictions no one intended and cause disputes among heirs who never agreed to them in the first place.

Anyone considering a conservation easement as part of their estate plan should work with an attorney early in the process, well in advance of signing anything restrictive, to make sure the easement's terms actually reflect the family's long-term goals and that the certification and credit application deadlines aren't missed. The attorneys at Jesson & Rains are ready to assist you in creating a conservation easement and all of your other estate planning needs. 

​By Associate Attorney Nicole M. Perozzi

If you’ve recently inherited a tax-deferred retirement account, such as a traditional IRA, you’ve also inherited a deadline.  The rules for liquidating an inherited IRA have significantly changed since 2020 with the enactment of the SECURE Act.

Prior to 2020, a beneficiary could “stretch” withdrawals from an inherited IRA over their entire lifetime, allowing tax-deferred assets to potentially grow for decades.  The SECURE Act ended that option for most beneficiaries.  If you do not meet one of the exceptions (such as being a surviving spouse), you likely will need to liquidate the entire IRA within 10 years of the deceased owner’s death.  The IRS further clarified in 2024 that if the deceased owner had already started taking their own required minimum distributions (“RMDs”) before death, the beneficiary must also take annual withdrawals in years one through nine of that 10-year period. Missing one of those withdrawals can trigger a steep penalty.

The rules that apply also depend on who it is that inherits the account-- whether you are the named beneficiary, the deceased owner’s Estate is the beneficiary, or deceased owner’s Trust is the beneficiary.

If you are directly named as the beneficiary, the standard “10-Year Rule” usually applies. However, if you are a surviving spouse, a minor child, or a disabled or chronically ill beneficiary, you may be able to stretch withdrawals over a longer period of time.

If the deceased owner’s Estate is the beneficiary, the Estate is not treated the same as an individual, and the same 10-Year Rule does not apply.  The rules are stricter, and how strict depends on whether the owner had already begun their own RMDs before death.  If not, the IRA typically must be liquidated within five years.  Plus, higher tax rates on withdrawals could apply.

If the deceased owner’s Trust (or subtrust) is the beneficiary, the Trust may be able to qualify for the 10-Year Rule, but this requires very careful drafting.  A Trust prepared before the SECURE Act may not work as intended.  If the Trust fails to qualify, it will be treated like an Estate and lose the more favorable rules.

Naming the wrong beneficiary on your IRA can carry significant tax consequences upon your death.  If you've recently inherited an IRA, or you're unsure how to name the beneficiaries on your own personal IRA, contact us today at Jesson & Rains to discuss your options!